Product Details

• Amazon Sales Rank: #1753887 in Books
• Published on: 1993-12-31
• Original language: English
• Number of items: 1
• Binding: Paperback
• 288 pages

Customer Reviews

11+ years of successful AIM use.
I find it interesting in the reviews here at Amazon that the most severe criticisim comes from those that haven't used AIM! Most don't like Mr. Lichello's "style" of writing.

One critic mentions that Mr. Lichello "admits" he hadn't made a million dollars yet (page 181). However, the critic forgot to mention that the quote was from 1980 - just three years after the book was first published. Gosh, I wish the critic could teach me how to make $1MM in just three years!

Yes, the book has been IN PRINT for over 20 years - that says quite a bit about its relative success as a publication. How many other investment books have continually been reprinted and updated for that long?

"Why hasn't he even reviewed his own book here?" Well, he's now in his Seventies and probably doesn't care to.

"If his technique was worth anything, why are you getting it for under 6 bucks here?" Well, I personally have corresponded with many Registered Investment Advisors, Stock Brokers and financial planners that use Mr. Lichello's methods for their customers. Believe me, their customers are paying a fatter fee than just $6 for having their money managed for them.

I would like to suggest after reviewing the fact that most mutual fund managers don't even manage to keep up with the broad market averages, year after year, that maybe they'd be better off letting "a few high school students run billion dollar portfolios with AIM."

In short, please realize that with nearly 12 years successful experience with AIM, I have a completely different opinion than others here have offered WHO HAVEN'T EVEN TRIED IT FOR A MONTH!

Anyone who suggests that successful investing doesn't require "work" is a fool or has been just plain lucky. AIM requires effort on the part of the user (athough new computerized AIM programs make it much easier than Mr. Lichello's longhand method). AIM requires that we invest rationally while picking quality stocks with great long term potential. AIM requires an attention span longer than the basic kindergartener. Value Line provides a source of consistent information on BETA (price volatility) and Stock Price Stability which help in the selection process. However, there's also mutual funds such as Profunds Ultra OTC (UOPIX) that provide all the volatility and potential that a successful AIM account needs.

So, SKIM Mr. Lichello's book if you don't like his style, but please grasp the concept. After you tire of the Momentum Game of musical chair investing, pay your current SHORT TERM tax bill, and figure your total return, go back and re-read the important parts of the book. I think you'll find more there that first meets the eye.

More users can be found by entering "Lichello" in a good search engine. There's plenty of us.

Boy! I guess I stirred the Pot!!
I've done exactly what you have suggested many times in the past. I'll add up all my buys during a downward slid and come up with an average price. I've added up all my sells during a market climb and averaged the price. Guess what, it's always profitable.

It isn't so much that AIM works better than flawless trading, it's just that it rarely loses money for the user. Of last year's 85 taxable events in my own account only 13 were at a loss. Those losses were very minor. Of the 13 losses 7 were short term losses. Most of the gains are long term most years (think about the tax savings). My porfolio turnover rate was about 28% and my AVERAGE capital gain for 1998 was 38% including all losses.

I don't think Mr. Lichello wanted us to be mindless robots working the market. Nor did he indicate that his method couldn't be improved. Over the course of years, I've taken the basic AIM model and "personalized" it. The simple improvements I've made didn't take a massive amount of skull sweat, and were easily verified as effective when tested by computer spreadsheet (over 18 years of data).

Even further improvements are still under way by others with whom I correspond. Such items as making the various parameter adjustments using an Artificial Intelligence override to continually optimize the settings.

Please look again at the AIM model, not as a straight jacket but as an example of what investing is supposed to be - profitable. It is a risk management model. There's always a balance between risk and reward. If AIM reduces risk, guess what, it probably has a reward penalty as well. Some of us just might be retired and want to moderate our risk and be willing to sacrifice a bit of performance.

Most AIM users with whom I correspond have been happy to modify Mr. Lichello's basic model for their own ways of investing. I think Mr. Lichello's model is a licence to use it as we see fit and not a rigid profile that can't be changed. Try splitting SAFE into two separate components. Give each its own weighting relative to the Resistance to buying or selling you want. Try limiting the total level of Cash Reserve to a percentage of the portfolio's value. Quit selling when the Cash Reserve gets too FAT. Bump Portfolio Control up instead. All these things work.

AIM is a closed loop control algorithm with a positive feedback loop. One can also adjust the rate, reset value, and intensity of the feedback to vary the performance of the model.

I'm not sure a two year period is long enough of a test period to show AIM's potential. Mr. Lichello's hypothetical model uses 16 price cycles to take $10,000 to his million dollar goal. That's more cycles than can be expected in a two year period.

AIM needs to have significant downward price events periodically to restock the shelves with certificates. Since 1982 we've only had three events of any size to generate much buying by AIM. I don't think Mr. Lichello anticipated the 1982 to 1999 bull run when he designed AIM. It's been up to the users to modify AIM for use in a bull market.

Remember, just because AIM doesn't fit with your methods doesn't mean that it doesn't work. If there were to be an arguement brought about in analysis of AIM's activity, it might be the "time-value" of AIM trades has cash being spent a bit early. However, since AIM is being paid for maintaining a cash reserve in the form of interest, this is somewhat nullified.

Thanks for responding to my post. I'm glad to see the critics are up to my challenges! AIM does not violate the principle of Buy Low, Sell High. Most Short Term Traders leave massive amounts of value "on the table" by selling out too soon. I bought VTSS in 1993. As a trader it's offered many opportunities to sell out profitably. However, it's offered very few chances to get back in. Who would have done best? ST Trader? AIMer? Buy&Hold. In that case, Buy & Hold kicks butt. However, I'm still a substantial holder as well. Current profits are about 1300% and I see no reason to end the ride. ST Traders missed most of the ride.

Best regards, oldcat@execpc.com

Wordy but worth the effort.
I will forgive the author for making a salable book out of a relatively simple comcept. While the concept may be simple it seems to be missed by most. Twenty years with the some of biggest and best known brokerage houses, with their MBA's and research departments, failed to come close to the returns achieved in one year with AIM. Bull market aside, fifty percent returns on a stock which has yet to get back to the original purchase price is a result I can live with. Thirty to fourty percent returns with nearly half the value of the portfolios in cash (and not at risk). The concept works. Try it. You'll like it.