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To: Tom Veale who started this subject	5/17/2001 5:24:01 AM
From: aptus	Read Replies (3) of 18531

Hello Everyone, Well the AIM 2001 meeting in sunny Las Vegas got off to a wild and crazy start. Tom Veale transformed his wizard costume (from last year) into a graduation gown and mortar board (minus the tassel) to kick off the first day of meetings at the New Frontier hotel, just across the way from Treasure Island where pirates hang out and generally wreak havoc. However twenty-one people managed to slip by the pirates and show up for what turned out to be a series of interesting and informative presentations. So without further ado, here’s what happened… Tom Veale gave a short welcome speech and then launched into a rousing talk on the Veale International Equity Warehouse (or VIEW for short). You can visit Tom’s web site at http://www.aim-users.com. Here’s a summary of Tom’s rousing talk (by the way, you can obtain a video of the entire conference from Robert Gammon). AIM is a model for business management and Tom views this model as a warehouse. Before starting, Tom showed a cartoon of Keith Felkins before his unfortunate run-in with a heely and after. For an actual look, order a video from Robert Gammon or email Tom (I’m sure he’ll email you the two cartoons). Tom showed a slide describing the structure of VIEW and the performance of VIEW relative to the NASDAQ Composite Index. He said that we shouldn’t really be measuring against an index, rather we should be picking goals that satisfy our specific situation and family requirement, then measure against some benchmark (of our own doing) to see how we did. He also noted that VIEW was competitive with NASDAQ from 1990 to 1996. After that point, however, the NASDAQ took over and at its highest point was 40% higher than VIEW. However that has since changed. What a difference a year makes. Today VIEW has not only caught up, but surpassed the NASDAQ Composite. Tom said that there are five components to VIEW. Risk, Your Capabilities, Time, the required Financial and Emotional commitment and the ability to make decisions. Your equity warehouse requires that you understand these components. To illustrate his points he showed a chart of CSCO from 1999 to 2001. It’s currently trading well off its previous high. It had a large sustained appreciation period followed by a precipitous decline. ADC Telecommunications also had a large run up and a large fall. Other charts displayed were for COGNEX Corp. and Computer Sciences. His conclusion is that you need to know what you’re buying and whether it sits within your risk tolerance. In addition you need to find and use good advice and practice in a reasonably safe fashion. Once you’ve studied and brought your capability up to speed, then you can start the race (i.e. start managing real money). All investing takes some time and you must regularly review your portfolio and make time to do it right. You won’t be successful if you use the hit and miss approach. Keep in mind that when things get tricky you need to stay the course and keep your eye on the target. Don’t become involved in things that aren’t prudent. In the end you need to sleep well at night and avoid conflicts with your spouse. In other words, invest according to your family’s needs, not anyone else’s. But that’s not all. When we’re in the thick of things (whether the markets are up or down) the ability to make decisions is essential. AIM can help in this area as it will tell you when and how much to buy and sell. This covers most investor’s errors. It’s usually the indecision that causes failure, not the decisions. Tom said he decided to stay with the group that gives the best feedback and by doing so, allows him to make better decisions. Tom then continued with an explanation of the Idiot Wave (or IW). He compared the IW to the NAZ and then described the 4 components that make up the IW. These components are combined in a weighted fashion. When all four components agree (although they usually don’t), the IW has historically predicted market turn-arounds quite well. For example, in 1991 the IW fell below 30% (which meant very low-risk). The market subsequently took off (and that spurt lasted until our most recent decline). To be successful, investors must watch market conditions, and the IW helps monitor these conditions. This means that we need to perform within those conditions. The highest risk reading occurred last year in March 2000 (at that time the IW was recommending 60% cash and 40% equity). However when taking the oscillator into account (i.e. 15%) the actual recommendation was to be in 75% cash and 25% equities. This recommendation appeared approximately a month before the big crash in April 2000. What’s interesting is that even though the market has fallen, the IW is still not in a low risk state. In fact the IW is showing average risk. Unfortunately when the IW is in this risk range, it doesn’t tell us much. Only when it’s at one extreme or another does it give us information we can use. The IW components can be seen at Tom’s AIM users web site. So is AIM a complete business plan? No, but it’s a good outline. It has the makings of a great plan. AIM asks, “if you were only willing to risk $10,000 at the bottom of the price cycle, why would you now be willing to risk $20,000 at the market peak?” Tom continued by saying that Bob Norman helped him tremendously when he (Tom) started to use computers. Tom showed some Newport screens and mentioned that they were created specifically for him (as he was Bob’s only customer at the time). He also mentioned that he liked looking at graphs rather than a long list of numbers and showed some charts of his various accounts. He noted that when plotted, AIM usually buys below the moving average and sells above it. Tom’s retirement account graph was shown and he said that the cash utilization was minimal until 1998 when he diversified his equities and started to cap his cash reserve. There is no cash left today – after the recent market slide. His taxable account is back to 5% cash but that has been generated by only 4 or 5 stocks out of the 30 or so he holds. The cash in this account has moved around much more than in his retirement account. From 1990 to the present time, both accounts have returned approximately 14% per year. In conclusion, Tom’s advice is to choose your equipment, choose your equities, try to get good advice from those around you, then go out and do your job the best you can. In the end, we’re all looking for a smooth finish for our efforts. And finally a small piece of history. Tom coined the term “Buy from the scared and Sell to the Greedy” in 1995 and its been often quoted since that time. Lapel pins with this quote can be purchased from Tom (send him an email if you’re interested). After Tom’s presentation, a moment of silence was observed for Robert Lichello who passed away earlier this year. Up next, Bernie Goldberg's presentation... regards, mark. http://www.automaticinvestor.com

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