VEALIES -- Adjusting AIM Stock/ETF Account Portfolio Control

"Vealies" is a term coined by Tom Veale (http://www.aim-users.com)
for adjusting Portfolio Control (PoCo).

With a stock (or fund) that has been long rising, your AIM SELLS will
generate a lot of cash.  You will notice that the value of the stock
stays pretty much the same, and the PoCo is not adjusted at all,
after those sells.

This cash could eventually amount to a very large percentage of that
total AIM "account" value.

    (I consider one stock or fund and the cash allocated for
    purchases on declines to be one AIM account.)

Sometimes you may consider this percentage "too large".

    (Because of inflation, even if you naively believe the
    government that inflation is minimal, cash is a depreciating
    asset.  Therefore, many AIMsters do not want to maintain
    "too large" a cash position.  They would rather have more
    of the account in the stock.)

"Too large" is a judgement call.  You may not want to hold "too much"
cash, but you also don't want to be short of cash when AIM "tells"
you to BUY.

You pick a percentage -- 30%, 40%, 50%, 70%, whatever -- at which you
want to start capping the cash percentage of an AIM account.  When
the cash reaches that percentage, you "pull a Vealie".  The
percentage you choose is arbitrary, so cannot be automated.  Veale's
"Idiot Wave" offers some guidance.  His "Idiot Wave" is based on
current market conditions (the general market).  In any event, after
doing a Vealie, you use the modified PoCo value just like you use the
modified PoCo value after a BUY.

How this is done is that, using the current PoCo, you figure what the
dollar amount of your next SELL would be.  (This is based on however
you determine that -- the AIM calculation with your parameters of
minimum number of shares, minimum dollar amount, percentage of old
PoCo, percent move of price since last sell, etc.).  Instead of
actually selling at that point, you take half that amount and add it
to the PoCo to get your new PoCo value.  You then recalculate what
your next BUY and SELL points would be.

The effect of this is to raise the price at which you would sell the
same amount as before, or to reduce the quantity you would sell at
the same price you would have sold at before.  Similarly, the next
buy price or quantity would be raised.

You will note that if the stock price goes down, the cash percentage
of the total account increases.  I don't consider hitting the
percentage point in that case a Vealie trigger.  I do Vealies only
after the price RISES, and I have just made a SELL, and the
percentage cash after that transaction is at or above the trigger
percentage.

If, after pulling a Vealie, the percentage remains "too high", I
still don't do another one until after another SELL.

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