Replies to post #7648 on A.I.M. Users Bulletin Board (AIMUSERS)

[Qarel]

Sorry, double post. See next message.

Karel

[Qarel]

No, Jibes' New AIM doesn't look like X_Dev, it looks more like Vortex. In fact, it might be exactly the same as Vortex. And just as Vortex, it isn't AIM. Like AIM, Vortex/New AIM are developments of the Constant Dollar Plan. (In a CDP, you sell and buy to keep equity at the same value.) But they have a different twist, compared to AIM. AIM uses Portfolio Control for the 'constant' amount, but raises this 'constant amount' after every buy. This repairs a perceived shortcoming of the CDP, that after several cycles the plan has spun off a lot of cash, but with equity still at the same level. Vortex/New Aim use as a twist that you buy (or sell) more (or less) than the CDP would: the Factor in New Aim, or the Agression in Vortex. The new equity value then becomes the new reference point. This allows the equity value to drift in any direction (apart from price development). So we get the following family tree:

                              CDP 
                     (equity remains constant) 
                   <-                        -> 
                 AIM                         Vortex/New AIM 
    (adds a ratchet device: PC +       (adds a factor to buys and 
     increments; equity may grow)       sells; equity may drift)

So AIM and Vortex/New AIM are only siblings, in my view, and saying that they are AIM, AIM-like, or descendants of AIM strictly speaking isn't true. X_Dev is only inspired by AIM; its use of moving averages places it outside this classification completely.

Regards,

Karel

[jibes]

Hey Rien.


<In the Cisco case you stop when the share price has not yet recovered to its old high

True but I ran this test on the same data as Jeff Weber did on his Web site. I wanted to see how New AIM would have done in this case.
I agree that if the price of CSCO suddenly jumped back to it's starting price AIM would do much better. But how would you have felt if you had done this on ENE? True, New AIM would have been bad too, but if you had kept feeding cash to a losing proposition, disaster!

Jibes
TrendSeekers at:
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