Replies to post #36906 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Hi K

Had a look and got similar figures to yours when using a AIM spreadsheet, but as you say it is not easy to think about cash as equity and equity as cash. and I've fogged out. A great idea, but it just doesn't feel right - and usually when I get that feel its because there is something wrong, but I've not managed to pin down what that might be.

That's much like a log scaling, where the share price will have to move in increasingly larger amounts the further it deviates from the median in order to trade. Which I guess is a bit like the halfway-to-the-wall approach.

Toofuzzy often has a much clearer mind and might be able to spot the Stewie if present.

Regards. Clive.

[Toofuzzy]

Hi karw

If you expess cash in shares, the number goes up as the stock price goes down.

So if CASH is going up in relation to real shares ..... oh shit this makes my head spin.

Ok so if CASH in number of shares goes up, you would sell some cash and buy shares.

I guess this works if you can wrap your head around it.

Toofuzzy

[ls7550]

Using standard AIM we can never sell all our equity but we can exhaust our cash. Using the inverted AIM we can never sell our cash but we can exhaust our equity.

But what to do with such cash accumulation (selling all of stock) ???

A typical AIM stock might see stock prices progressively rising. A typical 'cash' AIM might see prices progressively declining, until all of reserves (stocks) had been sold to 'buy more cash'.

You'd have to have some mechanism - a bit like a Vealie - to prevent too much cash accumulation. Perhaps starting a new AIM periodically. Or perhaps stop selling stock to buy more cash when below/above a certain threshold.