Replies to post #36223 on A.I.M. Users Bulletin Board (AIMUSERS)

[RCA420]

TITLE: Hello Tom or anyone who can help me answer this question; v-Wave question

Upon re-reading your reply this morning I came to question my understanding of your post. I thought I had a grasp of the v-wave, but now I think I don't. Please bear with me. It takes awhile for me to pick certain things up. :P

In your reply you stated for the week of 12/14/2012:
Individual Company Stock Risk (cash) Range
10th Percentile = 38.8 or below Low Risk; 90th Percentile = 59.1 or above High Risk

Diversified Mutual Funds or Portfolios Risk (cash) Range
10th Percentile = 25.9 or below Low Risk; 90th Percentile = 39.4 or above High Risk

Say I'm plopping down $10,000 and I'll be using the Individual Company Stock Risk Range at 10th percentile. Does that mean I'd keep 38.8% ($3,880) of my portfolio value as CASH and invest the 61.2% ($6,120) of the remain funds into a particular stock in the initial setup?

OR

Do I just take 38.8 and multiple it by the beta of a stock (AMD) which is 2.21 to get 85.748% (thus keeping $8574 as cash reserve and investing $1426 in AMD)?

As taken from the main page:

v-Wave.... "It should be multiplied by your stock or portfolio's BETA to get the cash reserve level of less diversified or more aggressive holdings."

Thank you. Confused...