WEEKLY NEWSLETTER ARCHIVES
for 1997

DISCLAIMER

 I attempt to get good information and data on which I base my judgement of the market. However, if you have ever listened to any show on investing you know that it's all just opinion in the end. Same here. This is personal opinion about what I feel the market is doing. It relates to the method called Automatic Investment Management (AIM) but that's as far as it goes. I'm an individual, Not Licensed, Not Registered, Not Employed. Some of the stocks mentioned will be one's that I own and most I don't. If you enjoy the reports, good. Knowing something about AIM will make the reports more meaningful. Have fun, and happy investing.
1997 Newsletters
FIGGIE PUDDING RECIPE

IDIOT WAVE _ Week of 12/22/97

Suggested Cash Reserve For New AIM Accounts Using:
Individual Stocks____________________51% unchanged _ High Risk
Growth Stock Mutual Funds___________34% unchanged _ High Risk
IW Risk Oscillator______________________0.0 _ Steady Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.4 + 13 week Treasury Rate 5.21 =____ 22.61 down 0.08 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ _0.4 up 0.1 low risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 6.4 down 1.7 high risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.4 down 0.1 ave. risk
    (Zeal)

    Special Note: Our Bulletin Boards are now accessible for FREE in a Read Only fashion.
    REPORT _ WEEK OF 12/22/97: Here I sit in my counting house, just another Scrooge! Korea? Humbug! Malaysia? Humbug! Tailand? HUMBUG!!! From where I sit, it's more like being Scrooged! You can all take the afternoon of Christmas Eve off, BUT BE HERE ALL THE EARLIER ON THE 26TH!
    The Idiot Wave is now 18 out of the last 19 weeks indicating HIGH RISK.

    One can start to see the change in attitude in the High Low Logic index. It's starting to fall a little bit. This means that investors are more and more convinced that the market's direction is down. According to Mr. Fosback, the designer of the Hi/Low Logic Index, it's a positive sign when the market moves with conviction _ either up or down. A low value in this indicator will show that conviction. Let's hope this trend continues!

    My Best/Worst Index continues to be mildly bullish, showing negative value for the second week in a row. It takes a pretty traumatic market to get the worst performers to out_weigh best. This is what you see when you look at a negative value here. If you think of the math, imagine that a fall of 50% is as dramatic as a gain of 100% (the divisor and the multiplier are the same). So, this number should be a positive in a neutral market. The Best Buy in Value Line 13 weeks ago was Best Buy! It's risen 85.8% in that time. Poor old tarnished Gold is represented at the Worst Performer by Pegasus Gold, down 84.0%. As you can see, these two stocks just about wash each other out.

    Again this week, the Relative Valuation dropped ever so slightly. What is it going to take to get the P/E ratio of Value Line back to more normal levels? Are the anticipated interest rate drops for early 1998 already priced into this? The yield curve is so flat right now, the next thing we'll start hearing is how it's going to become inverted! Short term credit squeeze with long term rates low. Could happen. Keep your eyes pealed for articles on this.

    I'm going to have to buy another filing cabinet just to store all these darned trade tickets! In the last week AIM/Newport directed the following trades:

  • Sold 6% of CGEN @ $20_7/8 (37% LIFO gain in 6 months!)
  • Bought 7% more NERX @ $5_1/4
  • Bought 5% more CHIR @ $17_3/8
  • Bought 9% more GENE @ $6_7/8
  • Sold all remaining shares of BQR @ $41_3/8
  • Bought 33% more APCC @ $24
  • Bought 9% more CGNX @ $22
  • Bought 4% more FTCHX @ $26.72
  • Bought 3% more TWCUX @ $26.54
  • Bought 9% more SFR @ $9_3/4
  • Bought 5% more TWCVX @ $11.84
  • Sold 7% of STKLF @ $1_3/4 (55% LIFO gain in less than a month!)
  • Bought 5% more CSTGX @ $24.91
    It feels like the Cash Dyke has gone from a small trickle to an absolute FLOOD with all this buying. The few sales have been very profitable, however. Let's hope I get to report more fat LIFO gains in the near future!

    Please have a safe and happy Holiday! Friends and family will be gathering this afternoon at the Veale house. I was up at 4 AM today to get the family FIGGIE PUDDING on the stove to steam. The house was smelling pretty darned good by 8 AM! We've all heard that line "And bring us some figgie pudding", but how many of you have ever actually HAD any??? This is an ancient recipe, and one that is a real treat. I think I'll post it on the Bulletin Board!

    >>>>>>__________AIM _ The Business Plan For Investing__________>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 12/15/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________51% unchanged _ High Risk
    Growth Stock Mutual Funds___________34% unchanged _ High Risk
    IW Risk Oscillator______________________+3 _ Rising Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.4 + 13 week Treasury Rate 5.29 =____ 22.69 down 0.36 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ _0.5 down 2.9 low risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 8.1 up 0.2 high risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.5 up 0.2 ave. risk
    (Zeal)

    Special Note: Our Bulletin Boards are now accessible for FREE in a Read Only fashion.
    REPORT _ WEEK OF 12/15/97: I bet you are getting pretty tired of my spouting off about the IDIOT WAVE being at high risk. After all, the market has been quite and stable, the world economy is moving ahead smoothly, Terrorism is extinct, Europe is finally united, I'm sure that oil prices are about to go back to 1967 levels and that AIDS was a hoax. See, what's there to worry about!!!

    Actually, if you look closely at the components above, you'll note that Veale's Best/Worst Index has actually fallen into the Low Risk area. This is very encouraging. This value almost never falls below Zero without a nice little rally following soon after. The Hi/Low Logic Index is seasonally high and just reflects Tax Selling and general market confusion. This will self_correct as soon as a rally gets under way. There's been a slow whittling away at the High Risk reading of the Valuation component as well. This needs to come down more, but is getting slowly better. Finally, the Zeal reading is creeping up, but is a long way from being worrysome.

    If I were so inclined to fret, I guess it's the fact that the IDIOT WAVE long term moving average (52 week) is now exactly equal to the highest reading it ever had. That reading is now 46.12 _ the same as on October 23, 1987! It took alot of over_speculation, over_valuation, abundant confusion and over_zealous activity to get the 52 week average that high in 1987, and the results weren't that pretty! In recent times, it's been primarily the VALUATION that's been the culprit. I think it's too soon to either party or have a funeral for the market. Let's keep an eye on it as the new year approaches. Lots of investors, analysts and brokers are just sure that there's a January Rally around the corner. Hope they are right again. My Best/Worst Index seems to think so.

    Another week of active AIM trading for me:

  • Bought 5% more TWCVX @ $13.81
  • Bought 9% more IDTI @ $9_1/4
  • Bought 10% more VLSI @ $19_5/16
  • Bought 10% more SFR @ $10_1/2
  • Bought 7% more VTSS @ $35
  • Bought 5% more VLSI @ $18_3/4
  • Bought 9% more TWCVX @ $12.95
  • Bought 7% more UWW @ $14_3/16
  • Bought 10% more CGNX @ $23_3/8
  • Bought 7% more UWW @ $13_1/2
  • Bought 9% more CGNX @ $21_3/16
    That's It! Just a few buckeroos floating out of my bank and into someone else's. Just a few stocks floating out of someone else's account and into Veale's International Equity Warehouse!

    The IDIOT WAVE has now been in the High Risk area for 17 out of the last 18 weeks. In that time, the NASDAQ has floated around but gone nowhere. If you would like a hard copy of the Idiot Wave and its components in graph form, please just send me an email with a postal address. All addresses will be kept confidential. You can amaze all your friends!!!

    >>>>>>________AIM for Financial Independence!!!!______>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 12/08/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________51% up 1 _ High Risk
    Growth Stock Mutual Funds___________34% up 1 _ High Risk
    IW Risk Oscillator______________________+5 _ Rising Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.8 + 13 week Treasury Rate 5.25 =____ 23.05 down 0.03 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 2.4 up 1.8 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 7.9 up 4.1 high risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.3 up 0.1 ave. risk
    (Zeal)

    Special Note: Our Bulletin Boards are now accessible for FREE in a Read Only fashion.
    REPORT _ WEEK OF 12/08/97: In 16 of the last 17 weeks, the IDIOT WAVE has been signalling that the market is at high risk for new investments. It has been suggesting that we reserve about 50% cash reserve for each of our investments we start with AIM as manager. Several of my ongoing accounts have already eaten up large portions of their respective Cash Reserves while others have exhausted theirs. I guess the IDIOT WAVE wasn't kidding!! As high risk periods go, this is one of the longer ones we've had. The Nasdaq Composite was at 1562 when the IW first signalled High Risk and now it's all the way to 1633. In between it rose to over 1745 and was under 1580. One had to be pretty quick on one's feet to have done well recently. My own account is off about 8% since the end of August. For the year to date, I'm still showing a gain of 16%, however. This isn't as high as it was , but still is a pretty good year.

    I think it's worth noting that 16 out of 41 of the Worst Performers in Value Line this week were from the Computers & Peripherals, Semiconductor, and Semi Equipment sectors of the market. This inticates that there's some pretty heavy Selling going on in that area of the market. It might be a good time to look at a technology, computer or electronics Sector Fund to start an AIM account.

    Pegasus Gold is again leaving the stables full of winged horse manure as its shares plunged to under a dollar per share. The loss for the last 13 weeks is now a whopping 80.6%. Dominion Textiles suits most of its investors quite well as it taylored a gain of 105.7% in the same period. This wide discrepancy between the best and worst performers shows what a confusing market this is to most investors. That confusion is mirrored again in the DIVERGENCE index shown above. Last week there were 477 new highs for the week and 535 new lows on the Nasdaq stock exchange. Part of the very high values for the new highs and lows is a seasonal problem related to the Tax Selling Season, and the rest is just plain confusion.

    AIM wasn't confused about what to do this last week, however. It kept busy following Mr. Lichello's Business Plan and kept Veale's Equity Warehouse active. Here's the AIM trades for the week:
  • Bought 9% more UWW @ $15
  • Bought 21% more VLSI @ $20
  • Sold 5% of ASND @ $32
  • Sold 8% of SDS @ $27_7/8
  • Bought 5% more GENE @ $7_1/2
  • Bought 5% more GENE @ $7_1/8
    As you see, the Buying out did the Selling. Another week of negative cash flow for the Warehouse!

    This newsletter was accessed about 200 times in the last week. I'm glad to see it being read and (I hope) helpful to so many people. The AIM home page will soon pass the 7000 visitor level and our bulletin board now has over 3500 postings. All this has happened in less than a year. 20 years after Mr. Lichello's AIM book was first published, we FINALLY have a great way for AIMers to get together. Thanks to all of you for making this whole thing work!

    I'd like to give a warm welcome to our latest long distance AIM/Newport user, Jan Bakker. Jan hails from Zaandam in The Netherlands.

    >>>>>>__________AIM For "Rational Exuberance!"__________>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 12/01/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________33% down 1 _ High Risk
    IW Risk Oscillator_______________________2 _ Falling Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.8 + 13 week Treasury Rate 5.28 =____ 23.08 up 0.47 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 0.6 down 2.4 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.8 down 2.1 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.2 down 0.1 ave. risk
    (Zeal)

    Special Note: Our Bulletin Boards are now accessible for FREE in a Read Only fashion.
    REPORT _ WEEK OF 12/01/97: As if we didn't have enough trouble with the banks and businesses in Asia, now we're seeing a wholesale attack on a couple of sectors in our own market! The Brokerage analysts seem to be bent upon getting as many shares bought and sold as possible to fatten up their holiday bonus'! A general mauling of the chip makers is in progress and the reasoning seems, at best, weak. If you allowed AIM to guide your decisions as prices were rising through September, you should have plenty of cash to do some really good buying here. Again, AIM's a pretty good purchasing agent, so let it do its work.

    I've had and active week which should be making my broker happy. Here's the trades:

  • sold 9% of ICA @ $16, as AIM directed (a 29% LIFO gain since the end of Oct!)
  • bought 12% more VLSI @ $22_7/8, as AIM directed
  • bought 9% more IDTI @ $9_7/8, as AIM directed
  • bought 8% more VTSS @ $37_3/4, as AIM directed
  • bought 21% more STKLF @ $1_1/8, as AIM directed
    Do you get the impression that I follow AIM's directions? Yes I do. AIM has a nasty habit of saying "I told you so!!!" if you don't listen to what it says. I'm really pleased with the quick turn_around in the shares of ICA. It's not often the market is nice enough to give us 29% in just over a month! Who would have guessed that the severe thrashing that Mexican stocks were taking at the end of October would heal itself so quickly? My Mexico Fund has also recovered nicely, although not quite to a Sell point yet.

    Please note than my Speculation measure, the Best/Worst Index is back down to almost zero. Just a bit more fear thrown into the market place and we should be back in the low risk area for this indicator. It hasn't been this low since last May when the NASDAQ was at about 1300. I'd love to see this particular indicator go to negative numbers. That has almost always been a healthy short term sign for the market. The best performer in all of Value Line for the last quarter is Dominion Textile, stitching up an 82.3% gain. While trying to spin flax into gold, Pegasus is looking a bit frayed around the edges with a loss of 75.3% during the same period. There are now 5 gold producers on the Worst Performers list in Value Line. This usually speaks of a over_sold condition. I have an order in for a Buy of more of my Vanguard Sp. Precious Metals Fund (VGPMX) and am hoping that will be my LAST! This buy will represent a BIG addition to my overall position.

    As a contrarian note of caution, this week's Value Line supplement shows 19 out of 23 Oilfield Service Companies rated either #1 or #2 for TIMELINESS. I worry when any one sector gets that "hot". I'd make sure to follow AIM's Sell orders in that sector! Can a "rotation" be far off?

    Bob Norman from Newport Programs told me it's not too late to order the AIM software for the favorite investor on you holiday shopping list! He will get them in the mail (or emailed for overseas customers) in time for the holidays! The map of AIMers he has on his wall looks like it has Chicken Pox with all the dots on it. I'm very pleased for Bob and Dave, they worked hard to make Newport a good, usable program.

    I'm going to continue to keep the AIM STOCK HISTORY going on VLSI until we see a full cycle. It has such a marvelous AIM personality, that seeing it through the whole period may be more interesting that just a snapshot. I'll be updating it today. I also updated the AIM FUND HISTORY as well to show what has happened with my Hong Kong fund, WEHKX. See how nicely AIM has handled these long term investments.

    >>>>>>__________AIM for Portfolio Risk Management!!!__________>>>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 11/24/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________34% unchanged _ High Risk
    IW Risk Oscillator_______________________2 _ Falling Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.3 + 13 week Treasury Rate 5.31 =____ 22.61 down 0.52 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 3.0 down 2.8 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 5.9 up 1.7 high risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.3 unchanged ave. risk
    (Zeal)

    Special Note: Our Bulletin Boards are now accessible for FREE in a Read Only fashion.
    REPORT _ WEEK OF 11/17/97: Another week of the IDIOT WAVE red flagging our enthusiasm about the market. This brings the total to 14 of the last 15 weeks that we've seen the IW in the High Risk Zone. Two components moved down nicely, but one moved up enough to offset the improvements. The confused state of the market has pushed the Divergence measure well up into the high risk area. It's difficult to remember that it was mid_October that the NASDAQ hit new highs with a value of 1745 and now its hovering around 1600. What a difference a month makes!

    It would appear that we're going to have to endure the pain of a confused market for a bit longer. News from Japan wasn't very good on Monday and our markets reacted poorly. With all the chaos, here's what my AIM accounts have been doing for the last week:

  • bought 7% more VLSI @ $24_7/8, as AIM directed,
  • sold 4% of IKN @ $31_1/8, as AIM directed,
  • bought 11% more CGNX @ $24_5/8, as AIM directed,
  • bought 9% more BSX @ $45, as AIM directed.
    Well, at least there was ONE sell order in there! I guess this means that Uncle Sam isn't getting rich off of me this month! I'm trying very hard to not break my 'one trade per stock, per week' rule with VLSI. They pounded the stock down to $20+ today before it started to recover. I'm amazed at how far the stock has fallen in just two days _ about 33%! Talk about BETA!

    As ill as Oxford Health has been recently, loosing 67.2% of its share value in the last 13 weeks, Immunex vigorously rose 100% in the same time frame. It would appear that market speculation has been temporarily been sent to the waiting room. Lots of tech stocks still litter the Worst Performers list in Value Line.

    This newsletter page has now been accessed over 4000 times since early this year. I'm glad to see that it continues to draw a crowd. It would appear that the rather unpleasant circumstances of this High Risk period might have convinced a few lurkers to give Mr. Lichello's AIM a try. This is great! Over 6300 people have found their way to our AIM Home Page as well. While hunting around the Usnet Newsgroups for AIM people, I came across Uncle Fred's Underground! He says that AIM users are sort of a 'Cult' and that he uses it for low price stocks. I suggested to him that until our 'Cult' moves to some central american country and takes poison, that we were probably an okay group! He has a list of stocks that he owns and lists issues that others suggest to him.

    Bob Norman reports that we will soon have a new country added to the Newport Users. This new AIMer is from the Netherlands. Welcome! Luckily, I don't have to write this newsletter in 7 different languages! I have trouble enough with English!

    Have a pleasant Thanksgiving holiday on Thursday. We have lots of profits we've harvested this year for which to give thanks!

    >>>>>>>>__________AIM For Profits!!__________>>>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 11/17/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________51% unchanged _ High Risk
    Growth Stock Mutual Funds___________34% unchanged _ High Risk
    IW Risk Oscillator______________________0 _ Neutral
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.9 + 13 week Treasury Rate 5.23 =____ 23.13 up 0.27 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 5.8 up 0.7 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.2 up 0.1 high risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.3 up 0.1 ave. risk
    (Zeal)

    Special Note: Our Bulletin Boards are now accessible for FREE in a Read Only fashion.
    REPORT _ WEEK OF 11/17/97: Some may feel that the recent market volatility has taken some fat out of the market, but the IDIOT WAVE would disagree. Earnings did nothing to bring down the Relative Valuation of the market. Price corrections didn't do it either. This single component of the IW continues to be the most troubling. I guess it's going to take more than Saddam and Hong Kong to get valuations back to reasonable levels.

    I was reading in a publication about a "value" based mutual fund that had an average Price/Book Value ratio of 7:1!!! Boy, what bargains! I don't mean to put people off of stocks with values like that, but I prefer stocks that sell at 2:1 or less. Be very careful to review the fundamental values of the stocks that you select for AIM. If you like computers, peripherals, telecommunications and software, you will find a "study group" of 18 stocks listed (out of 41) in this week's Value Line Index Section on Page 33. Look in the Worst Performers list to find them! They are down between 30% and 50% from their prices 13 weeks ago. Not every one is a steal, but some might be just what you are looking for in value and low entry point. Check it out!

    My Speculation index has moderated recently with the bad market news. Just think, the Worst performer in all of Value Line was only down 35.6% about a month ago, and now the Worst down 69.9%! That honor goes to sickly Oxford Health Plan. Best Buy remains the Best Performer in the Value Line 1700 with a 13 week gain of 123.2%. This one seems to have topped out for now.

    No sales graced my portfolio this last week. A couple of stocks are AIMing to sell soon, however. My BSX will sell some shares at 57.375 and ASND needs to recover to $32 to trigger my gtc order to sell. Here's what did happen:

  • did a 'vealie' on BMY @ $93, in place of an AIM Sell
  • bought 6% more DIGI @ $19.875, as directed by AIM
  • bought 11% more MXF @ $16.75, as directed by AIM
  • bought 10% more UWW @ $15.625, as directed by AIM
  • bought 6% more CHIR @ $17.875, as directed by AIM
    I haven't found any really juicy convertible bonds recently. I spent the other morning looking through the S&P Bond book at the library, but didn't find anything particularly attractive. Maybe I'm just too tight! I did note that one could buy Farm Fresh's conv. deb. (7 1/2%, 2010) for about 56 cents on the dollar. This makes an attractive yield of about 13.5% currently and much better if held to maturity. I think I'd want to study Farm Fresh a bit more before I plunked down my money, however. I wouldn't want to end up with egg on my face for not studying the comapny first.

    I now have my new printer spitting out copies of the Idiot Wave, so if anyone wants one, just email me your snail mail address. I'll keep your address confidential.

    >>>>>______AIM to Moderate Market Risk!!______>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 11/10/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________51% unchanged _ High Risk
    Growth Stock Mutual Funds___________34% unchanged _ High Risk
    IW Risk Oscillator_______________________1 _ Falling Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.6 + 13 week Treasury Rate 5.26 =____ 22.86 down 0.54 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 5.1 down 5.6 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.1 up 0.1 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.2 unchanged average risk
    (Zeal)

    REPORT _ WEEK OF 11/10/97: The October issue of the American Association of Individual Investors Journal has an article that sounds like it was written by someone just before they were about to describe AIM. It sounds like "Here's the problem" and then, of course, AIM would be provided as "Here's the solution!" Its title is "Behavioral Idiosyncrasies and How They May Affect Investment Decisions". In their concluding remarks, they say, "Adopting a long_term investment plan is an investor's best defense against many of the behavioral tendencies discussed. After the plan is conceived, the investor can then build an investment portfolio appropriate for achieving the objectives of that plan." They say that this will help protect investors from "being distracted from the big picture." Guess what? You've come to the right place. Mr. Lichello wrote your "long_term investment plan" twenty years ago and it's working better today than ever!

    One topic of discussion was that investors rarely have a good frame of reference for use with their investment decisions. How can a person judge the market's upside potential if there's no gauge to use? This is EXACTLY why I worked to create the Idiot Wave. It performs the function of measuring How High Is High and visa versa.

    With that said, I guess you already have looked at the top of the page and seen that the Idiot Wave hasn't relaxed its vigil regarding the market's risk. It's been in the High Risk area for most of the last three months. Since first signalling high risk, the Nasdaq Composite has given up about 5% through last Friday. It's not that it was impossible to make money in this period, but that it was more risky. The previous High Water Mark for the Idiot Wave was 56% Cash Reserve and right now it's just 5 points below that level. Another way of looking at it is that it's 32 points above its all time low! Do "Behavioral Idiosyncrasies" mean behaving like an IDIOT?

    The FEAR that grey Monday precipitated was enough to bring my Speculation measure back into average risk and it also helped to reduce the P/E ratio of the Value Line 1700 as well. The IW Oscillator does indicate this reduction in showing a negative value this week. The market appears to be trying to sort itself out. This seems to be affecting the stocks with high valuations more than value stocks.

    13 weeks ago, shoppers got their Blue Light Special if they bought shares of Best Buy. That stock managed a gain of 115.9% since then. Not even a quick suturing could stop the hemorrhaging at Oxford Health Plan, as share prices fell 67.9% in the same period. My own account fell quiet with just a few trades. I continued to buy more shares of Wright Equity's Hong Kong Fund (WEHKX) and more of Vanguard's Precious Metals fund (VGPMX). Well, I'm certainly sticking to my Contrarian point of view! I also added about 20% to my position in Ascend Communications (ASND @ $23_1/8) as it continued to descend! Boy, I hope I'm right on that one! Unfortunately, I started about a week early there, as I thought that $32 would be a good place to start!!

    I've been attempting to get a new printer up and running, but so far it's a bit unhappy with me. What I'd like to do is print up some nice fresh copies of the Idiot Wave Graphs for distribution. If you are interested, drop me a note or mention it on the S.I. AIM thread. Remember, I'll need a Snail Mail address to send a copy.

    >>>>>________AIM For Steady Growth!!________>>>>>>

    Best regards, Tom Veale in Wisconsin

    IDIOT WAVE _ Week of 11/03/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________51% up 1 _ High Risk
    Growth Stock Mutual Funds___________34% up 1 _ High Risk
    IW Risk Oscillator______________________+2 _ Rising Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 18.3 + 13 week Treasury Rate 5.10 =____ 23.40 down 0.09 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 10.7 up 2.3 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.0 up 0.4 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.2 up 0.2 average risk
    (Zeal)

    REPORT _ WEEK OF 11/03/97: I can understand why Bears are an endangered species! That last cub didn't even last a whole week! After a whole week of turmoil, the NASDAQ had given up about 3.5%. That hardly seems enough to get upset about! However, as you can see above, The Idiot Wave didn't think it was fun. Eleven of the last twelve weeks have calculated to be High Risk periods according to the IW. This week's reading is as high as it's been so far this cycle.

    As you can see, three of the components went up this week. We still have only two components showing their own High Risk readings, but the sum is still enough to give us some caution. Please keep the Idiot Wave's suggested cash reserves in mind if you plan on starting any new AIM accounts in the near term.

    Thirteen weeks ago, the best buy in Value Line would have been Best Buy! Its price has risen 127.5% since then. As shocking as that might be, think of the jolt that investors in Korea Electric ADR are continuing to get with that stock powering down 42.6% in the same period.

    The biggest change in the statistics of the Idiot Wave components came from the Divergence reading. It went up, but you should also understand that there were big changes internally as well. Two weeks ago there had been 562 new highs and 218 new lows. Last week the numbers reversed to 242 new highs and 525 new lows. This is the first time since May 5th that there have been more new lows than new highs. If nothing else, last week's activity should unwind some of the market's speculation.

    I've placed a new round of "good until cancelled" orders on all of the AIM accounts that bought shares last week. Both the buys and sells are in place. I'm certain that my broker is smiling after that week of activity. Have I mentioned that I "converted" my broker to the AIM method? He's now a card carrying AIMer and Newport user! I'm certain his other customers are benefiting from this as well.

    The market turmoil seems to have brought more people around to the idea of risk management. I've been receiving a greater amount of email than usual with some really good questions. I'm working my way through the pile. I've also noted that the Bulletin Board activity is strong and these pages are as popular as ever. Thank you all for your continued participation. Keep practicing your AIM as we continue to target profitable investments!

    >>>>____AIM To Manage Your Carefully Selected Stocks!____>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 10/27/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ High Risk
    IW Risk Oscillator______________________+1 _ Rising Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 18.4 + 13 week Treasury Rate 5.11 =____ 23.49 down 0.02 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 8.4 down 3.3 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.6 up 1 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.0 unchanged average risk
    (Zeal)

    10/27/97 Dow and NASDAQ
    10/27/97 DOW, NASDAQ, S&P500
    REPORT _ WEEK OF 10/27/97: Again, either by dumb luck or great cleverness, the IDIOT WAVE has been right again! It was just brutal on Wall Street and all the markets on the 27th of October. We must have forgotten to count the leap years since 1987 or something! In any case, the DOW Industrials, NASDAQ Composite and other market measures suffered one of their worst days on record _ if not on percentage, certainly on dollar value and pure NUMBERS! It's not often we see TWO trading halts in one day! I'm not sure if they re_opened for the last couple of minutes of the day or not. Looks like about 550 down on the DOW and about 115 off of the NASDAQ.
    For all that activity, I was disappointed to only get a couple of orders to fill.
    10/27/97
  • Bought 13% more CGNX @ $25 7/8
  • Bought 13% more ICA @ $14 3/4
  • Bought 10% more OMQP @ $16 1/2
  • Bought 9% more STKLF @ $1 5/16
  • Bought 3% more TWCVX @ $13.71

    10/28/97

  • Bought 6% more CHIR @ $18 3/8
  • Bought 6% more DIGI @ $22 13/16
  • Bought 22% more ICA @ $12 3/8
  • Bought 11% more IDTI @ $9 7/8
  • Bought 13% more MXF @ $16
  • Bought 8% more VLSI @ $25 5/8
  • Bought 9% more VTSS @ $39 1/16
    Well, I guess you can see where some of my Cash Reserve has gone! This is the most buying I've done in a very long time.
    As of last week, NACCO was still the Best Performer in Value Line, up 101% in just 13 weeks. The Energizer Bunny must have drained Korea Electric dry as it closed down 42.7% in the same period. I bet those statistics will look different at the end of this week! The confusion brought on by last week's worries helped to raise the Divergence reading to the Average Risk area. It'll probably soar this week too.
    Look at how far your stock and fund prices have dropped so far and think about where you want your first AIM Buys to occur. You already know how tough it is to build a healthy cash basis, so let's use it as effectively as possible. I recommend no more than one trade per equity per week as always. If you have a smaller than normal SAFE set for some of your accounts, then you may want to take SAFE for Buying back to nearer 10%.
    I may add more to this report as the week goes by, but for now, please
    >>>>______AIM HIGH AND KEEP PLENTY OF POWDER DRY!!______>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 10/13/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ High Risk
    IW Risk Oscillator_______________________1 _ Falling Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 18.2 + 13 week Treasury Rate 5.06 =____ 23.26 up 0.10 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 10.5 down 0.8 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 2.0 down 0.4 low risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.0 up 0.1 average risk
    (Zeal)

    REPORT _ WEEK OF 10/13/97: Like a car stuck in a Wisconsin Ice Storm, the IDIOT WAVE has not budged from the 50% cash recommendation in several weeks. I can't tell if it's paralysed with fear or too smart to go on any further! All that I can say is that two wheels are spinning (Relative Valuation and Speculation) while two seem to be able to get some traction (Divergence and Zeal). If you are any where near the 50% cash reserve recommendation on your accounts, this should provide ample cover for any storm that may be over the horizon.

    I don't think we should be complacent, however. Remember the dreaded Tax Selling Season is just around the corner. Anything that you are holding that is down for the year to date is going to need extra cash as the year wanes and these stocks wamble. Everyone has a pretty fat tax bill to pay after two great years in the market and will be hunting down the loosers with no remorse. If your poor performers for the year are going to do well in the future, be prepared to average down all the way from now to the end of the calandar year.

    Only one trade crossed my screen this last week. It was the sale of about 2.5% of my holding in Genome Therapeutics, Inc. (GENE) at $9 5/8. This micro cap. stock has rallied, from my last purchase price in April, about 50% for a nice LIFO round trip. The good news just keeps comming. This little company, in good AIM fashion, has grown to be one of my larger holdings over a 10+ year period.

    Lift Truck builder NACCO Industries 'A', is again Value Line's Best Performer this week with a gain of 112.8% over the last quarter. Please note that it takes a 49.7% gain just to make the list these days! Also note that if your stock is down more than 15.3% in the last quarter, it now rates a place as one of the 41 worst performers in Value Line. The Worst of the Worst this week is Corel Corp. which has been coloring in RED with a nasty 41.9% dip in the last 13 weeks.

    Speaking of coloring, I'll be putting up a fresh Idiot Wave graph a bit later this week. I have to "colorize" it before I present it, however. If you take a good look at the components of the IW you will see the big difference between the the two high risk components and the other two. Relative Valuation is in uncharted territory, higher than in 1983, 1987 or any other time since. Speculation, while not out of hand, has been consistantly on the edge of its High Risk zone. Meanwhile, Zeal and Divergence have been true indicators of the rally to date. Usually it takes all four components in harmonious bellowing of High Risk to signal a serious market drop. We don't have that yet.

    The ranks of AIM users seems to continue to grow as more people find our pages. Let's hope all are prospering. I've started work on an AIM "dictionary" here for the site, but haven't finished it yet. It'll be up and working soon. Thank goodness Signet Books is still reprinting the AIM book and people like Amazon are still selling it for a reasonable price.

    >>>>>_____AIM for Future Profits!!!_____>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 10/06/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ High Risk
    IW Risk Oscillator______________________unchanged _ Neutral
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 18.1 + 13 week Treasury Rate 5.06 =____ 23.16 up 0.13 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 11.3 up 1.1 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 2.4 down 0.3 low risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.1 down 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF 10/06/97: Boy, what a busy week! I managed to do some buying and selling during the past week, some AIM related, ended some investments and started some new AIM accounts. Here's what the week looked like from that point of view:
    Sold out of LZ @ 43 1/4
    Sold out of GM @ $66 1/2
    Sold out of VICR @ $28 7/16
    Bought 33% more BSX @ $55
    Started new AIM account for ASND @ $32 1/8
    Sold shares of TWCVX in 5 separate accounts at between $16 and $16.46
    Sold 25% of APCC @ $28 3/4
    Sold 9% of SFR @ $13 1/2
    Sold 3% of CSTGX @ $31.82 (friend's IRA)
    Sold 4% of ANCFX @ $31.42
    With more sells than buys, the net cash reserves went up for the week. That's always a good feeling when the Idiot Wave is as high as it is.
    As you have seen, there's a bit of schizoid appearance to theIdiot Wave Components this week. Either high risk or low! The number of issues on the NASDAQ is stable and market opinion is very much in favor of a rising market. All this has done some rather magnificent things for the mutual fund industry as money literally poured into their accounts. Old Hagar put it well in this Cartoon:

    It looks like Hagar is standing about where the fundamentals support his bridge. The rest is pure speculation!!! Without AIM's CASH RESERVE shoring up my Investment Bridge, I'd be cantilevered just about as far from my own fundamental base of support as that carpenter! I was glad to be able to sideline some cash from the funds as other people rushed in with their $$$!
    NAACO Industries, a maker of lift trucks, managed to give an elevated level of capital appreciation to its shareholders this week. It shows a 113.9% gain in just 13 weeks and is the Best Performer in Value Line for the second week in a row. A short circuit in Korea Electric ADR caused the breakers to trip and zapped shareholders by 35.9%. The way this shows speculation is that if you had owned both, in equal amounts 13 weeks ago, you would be way ahead right now. The good news is far better than the bad news is bad.
    It looks like the market is finally broadening out in its investments. So many new highs last week (1129) when compared to the new lows (only 146). Absolute Breadth, a measure of the advancing shares relative to declining shares, was again very strong last week. It's as though nobody cares that the Value Line P/E hit a new record high last week, or that Allan Greenbacks is again making gloomy noises about the state of the economy, inflation, and 'expectations'. It's really scary when they start to ignore Ol' Al!!!
    This freebee newsletter has been read by people over 3000 times since I started posting it here at the web site. We also have over 2500 postings now at the AIM Bulletin Board on Silicon Investor. I've made a few changes here on this page recently. One was requested by a reader that said he wanted to print the weekly report but didn't like having to edit out the Special Report at the end. I have moved it to its own page now. I'll try to get that report on selecting mutuals for AIM revised for all to review sometime next week. Until then.............
    >>>>>>>________AIM for Proper ASSET ALLOCATION________>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 09/29/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% up 1 _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ High Risk
    IW Risk Oscillator_______________________1 _ Falling Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 18 + 13 week Treasury Rate 5.03 =____ 23.03 up 0.29 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 10.2 down 0.5 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 2.7 down 0.1 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ_______________________0.0 up 0.5 ave. risk
    (Zeal)

    REPORT _ WEEK OF 09/29/97: Please note above that I've included the All Time Highs and Lows for the Idiot Wave since Jan. of 1986. I do this for a reason. I was looking at the Idiot Wave graph and noticed that on 09/19/97 the two year exponential moving average for the Idiot Wave rose to 45. It's only been that high once before _ 08/28/87. Those of you who have been reading about the Idiot Wave for some years, are aware that the IW moves about a fair amount. However, it's rare that it gets to a sustained high valuation that allows the 2 year M.A. to creep up this high. Gives me the Creeps, too!!
    During the last week, I updated the stock and fund examples here at the AIM User's Group Pages. I used The Allen Group for the stock and my IRA with Ultra Fund for the new examples. Our fellow AIMer, Bernie Goldberg from Colorado, coined a new term _ a "VEALIE" _ to describe the Portfolio Control adjustment technique that is done when your account is fully funded with Cash Reserve. My IRA is a good example of how the Vealie works. To read more about it, go to the Frequently Asked Questions page and read through #8.
    We have a new leader in Value Line's Best Performers list (Page 33 of their index section). NAACO is up 98.4% in just 13 weeks. Sounds waacco, but not to investors in NAACO. Only the Short Sellers managed to Glitter when they shorted Pegasus Gold. It's still the Worst performer showing a 13 week loss of 32%. Pegasus isn't alone on the list. There's plenty of other gold and precious metals stocks shown on that list. It has been my experience that if we see an abundance of stocks from one industry listed on the Worst Performers column, that it indicates a grossly over_sold condition.
    Last week there were 1079 new highs on the NASDAQ as compared to just 161 new lows. It appears that the IPO market is warming up again as we saw the first increase in the number of new issues on the NASDAQ in quite a while. The Hi/Low Logic index for the NASDAQ indicates a short term bullish picture. The Advance/Decline ratio on the NASDAQ is also bullish for the short term.
    Last week generated the following trades for AIM and me:
    Sold 9% of BMY @ $82 7/8
    Sold 6% of CHIR @ $23 7/8
    Sold 8% of SFR @ $12 1/4
    Sold 23% of STKLF @ $1 7/8
    Sold 7% of VLSI @ $35 3/4
    Sold 8% of VTSS @ $52 1/2
    All in all, a pleasant week's work. All sales were profitable on both a LIFO and FIFO basis. Uncle Sam is going to love me!!
    My efforts to make the AIM pages easier to find seem to be paying off. I'm again getting email from lots of new AIMers and from experienced AIMers that are being 'brought in from the cold'!!! Keep spreading the word!
    >>>>>>___________AIM for Fiduciary Responsibility!!!!__________>>>>>>
    Best regards, Tom in Wisconsin
    IDIOT WAVE _ Week of 09/22/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________49% down 1 _ Ave. Risk
    Growth Stock Mutual Funds___________33% unchanged _ Ave. Risk
    IW Risk Oscillator_______________________1 _ Falling Risk
  • All Time High _ individual stocks = 56%, mutual funds = 37%, week of 08/14/87
  • All Time Low _ individual stocks = 19%, mutual funds = 13%, week of 02/15/88
    (Click for further EXPLANATION)

    • IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.7 + 13 week Treasury Rate 5.04 =____ 22.74 up 0.2 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 10.7 up 0.9 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 2.8 up 0.5 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 unchanged low risk
    (Zeal)

    IDIOT WAVE _ Week of 09/15/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ Ave. Risk
    IW Risk Oscillator_______________________0 _ Flat Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.4 + 13 week Treasury Rate 5.14 =____ 22.54 down 0.67 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 9.8 down 3.4 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 2.3 down 0.1 low risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 unchanged low risk
    (Zeal)

    REPORT _ WEEK OF 09/22/97: Since I didn't get to write last week's report before leaving to play hookie for a few days, this report will have to cover both weeks. The NASDAQ composite continues to hit new highs while the Dow Industrials tread water (bobs in the Waves?). The best news that I'm getting is that the Idiot Wave Oscillator has turned in minus numbers in recent weeks, meaning that upward movement of the Idiot Wave deeper into its High Risk zone has stopped for now. To have the Idiot Wave back in the Average Risk range again makes the overall investment world a little bit brighter.
    As you will note above, there has been some movement in the components in the last few weeks. One effect has been to start to lower the Relative Valuation figure. This has been the single biggest reason for the Idiot Wave's rise into the High Risk range in recent times. It took a reduction in the Treasury Rate to bring it down as much as it has.
    Nobody is napping at Kulicke & Soffa. It's stock has risen 108.6% in the last 13 weeks according to Value Line's Best Performers list. In the same time, Pegasus Gold shares smell worse than winged horse leavings as their stock price fell 37.9%. It wasn't that long ago K&S, the semiconductor equipment manufacturer, had the same problem that Pegasus is having right now. K&S had been on the Worst Performers list and now has the luxury of being best of the Best. It always amazes me how these stocks get "recycled" from one list to the other and back.
    The Nasdaq Hi/Low Logic Index is indicating that this rally in smaller capitalization stocks is real. Last week the Nasdaq had 1050 new highs while showing only 170 new lows. This indicates very little Divergence in opinion about market direction. This is usually a short term bullish sign. Along with Nasdaq's Composite Index highs, we also have new highs on the Wilshire Small Cap. Index. This is benefiting my own portfolio by giving me a chance to raise cash as AIM triggers Sell Orders.
    Last week AIM with the help of Newport helped me make the following trades:
    Sold 8% of my Santa Fe Energy (SFR) @ $12.25
    Sold 8% of my Vitesse Semiconductor (VTSS) @ $52.50
    Sold 6% of my Chiron Corp. (CHIR) @ $23.875
    Bought 6% more of Vanguard Sp Precious Metals (VGPMX) @ $9.01
    As you can see, my Newport 'good until cancelled' orders did a good job for me on the three sells. I had entered the VGPMX order the day I headed south to Atlanta. Overall, my cash reserve continues to build as the portfolio grows. It increased about 1% to 38.5% of the total portfolio value. During the month of August, my regular account rose in value by 8.3% (see Tom's account. for graphs). My IRA, which is invested in American Century's Ultra Fund, lost ground for the same period.
    We now have had over 4500 visitors to the AIM web site. I have worked at getting the Meta files working better so that the search engines can find us easier. It seems to have helped. Now if I search for Lichello I get our pages listed with much higher 'probability' ratings. I will be adding a glossary of terms to the main page soon. It seems to me that with AIM, Newport and the BB, that it would help if we're all using the same dictionary! Thanks for all of your support as we build the best investment topic on the Web!
    >>>>>>>>>_________________AIM for a Quicker Recovery!________________>>>>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 09/08/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ High Risk
    IW Risk Oscillator_______________________3 _ Falling Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.9 + 13 week Treasury Rate 5.26 =____ 22.61 down 0.55 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 9.8 down 2.7 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 2.4 down 0.6 low risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 down 0.3 low risk
    (Zeal)

    REPORT _ WEEK OF 09/08/97: New Highs on the NASDAQ and Wilshire Small Cap indicies show there is still some place for the Mutual Fund Industry to go with their money! The DOW was not as fortunate last week. AS the larger cap. stocks pause, we're seeing some improvement in our Relative Valuation figure. In fact, all four components of the IDIOT WAVE are down this week. The shift was enough to move my Speculation index back to ave. risk and my Divergence index down to the low risk area. With the improvement in the components came a drop in the IW Oscillator, but is will take a week or so for the IDIOT WAVE itself to fall back to average risk.
    Finally, we had a change in leadership on the Best Performers list in Value Line (Page 33 of the Index section). Titan Corporation is the current winner with a GIANT 13 week gain of 95%. The tarnish on precious metals rubbed off on Pegasus Gold, making it the Worst Performer of the 1700 stocks in Value Line. Pegasus fell 35.8% before flaring its wings. Hope it's cruising above stall speed!
    I should caution all readers that data during short trading weeks is not as consistant as we would like. The sharp drop in the Divergence reading may be just a fluke. Whether it is or not, it's impressive that 768 new highs were made last week on the NASDAQ while only 142 new lows showed up. For the year so far, there has been very little change in the total number of issues being traded on the NASDAQ (Zeal measures this). This has historically been bullish for the market. Part of the reason is that new money comming to the market isn't side_tracked to new issues. It concentrates in current stocks. That is helping our secondary stocks as well.
    AIM trades came from various quarters last week. I made trades as follows:
    Sold 17% of GM @ $65
    Sold 17% of LZ @ $44
    Sold 14% of SDS @ $52
    Sold 13% of VICR @ $26 7/8
    Sold 6% of NERX @ 7 1/8
    All AIM trades are recorded in Newport and are keeping the Cash Reserves very happy. I'm always pleased when I'm getting a bunch of Sell signals from AIM/Newport when the IDIOT WAVE is signalling High Risk! I hope all of you are managing to raise cash as well. It sure makes for a good night's sleep.
    >>>>>>_____AIM to Benefit from Market Volatility!!_____>>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 09/01/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________34% unchanged _ High Risk
    IW Risk Oscillator______________________+1 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.9 + 13 week Treasury Rate 5.26 =____ 23.16 up 0.24 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 12.5 up 1.5 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.0 down 1.0 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.2 unchanged low risk
    (Zeal)

    REPORT _ WEEK OF 09/01/97: It's getting harder to believe in the sincerity of normal investment advisors when they tell us that recent market volatility means nothing. I suppose that the 250+ one day gain on Tuesday doesn't mean that there's too much money chasing after too few stocks. I believe the IDIOT WAVE has been guiding us correctly in saying that the market is still at high risk this week. For the third week running, our guidepost for AIM has been saying that the market is a bit overcooked.
    What surprised me this week was the better look of the the rather impressive drop of the NASDAQ Hi/Low Logic Index. It would appear that last week's slow trading was decidedly in favor of moving UP. I would like to see a normal week of trading to verify it, however. This week will be a short week, so the data may not be reliable either.
    Five weeks running, Tandem has been the Best Performer in all of the 1700 stocks in Value Line. It's up 21% just since making it onto the list 5 weeks ago and is up 129.1% in the last 13 weeks. That's impressive. Is this the time when smart short sellers should get involved? A few more investors got plucked with Boston Chicken even though it managed to hold even as the Worst Performer again this week. The loss in the last 13 weeks is 43.1%, even though the stock price has not changed in two weeks. Maybe with my secret BBQ recipe, this stock could spread its wings again!
    The high valuation in the large cap end of the market looked like it would soften while spreading money around the small cap stocks. After that 250 point one day leap by the DOW stocks, I'm not sure what to think. In the last month, my own portfolio has churned around but has really gone sideways. I'm still making profitable trades, but the effect on net worth has been slight. I guess under these circumstances, we should be glad AIM is still having us sideline some more cash. After all, one of AIM's secondary functions is asset allocation. My own cash reserve is still rising slowly.
    With only two of the four Idiot Wave components showing High Risk, it's hard to believe that the whole bit is in high risk. I guess it's just symptomatic of this market's jumpy attitude. My general advice is the same as always _ keep following AIM's Buy and Sell market orders as they come. Let the Idiot Wave's Cash Reserve recommendations be your targets for your own cash reserve levels. The IW will tell us with we're in a low risk invironment just like it does for high risk.
    Some of you will find it hard to remain steadfastly contrarian in this market. Remember, if you start to feel as though the market is getting away from you, it's probably a problem with the market and not your portfolio! I know that this sounds a bit like "Everyone is out of step but John!", but AIMer's are a tiny minority. The vast majority of institutions, mutual funds and private investors are fixated on MOMENTUM strategies. AIM is designed to take advantage of the weakness of momentum investors _ poor understanding of fundamental value. Each sector rotation and market cycle proves this positively. Momentum strategies always carry buying and selling to an extreme, well beyond what should be "efficient" pricing of equities. I don't believe for a minute that Tandem's SALES have gone up 129% in 13 weeks, any more than I believe that Boston Chicken's SALES have dropped 43%. AIM may not be glamorous, but it gets the job done efficiently. Investing is a business, not a casino full of rock stars and dancing girls. AIM treats investing as a business.
    >>>>>>________AIM To Time Your Purchases Correctly!!! _______>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 08/25/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% unchanged _ High Risk
    Growth Stock Mutual Funds___________34% up 1 _ High Risk
    IW Risk Oscillator______________________+1 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.7 + 13 week Treasury Rate 5.22 =____ 23.31 down 0.39high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 11 down 1.7 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.0 up 0.1 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.2 up 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF 08/25/97: Word must have leaked out that the IDIOT WAVE is again in the High Risk area this week. The market started off Monday with a nice rally, but came undone in the last hour or so. For whatever reason, most of my stocks were up for the day, so I'm not upset!! Still, as we all know, if the market in general gets stinky, our stocks will stink too. The influx of cash into the funds late in the month was heralded as a reason not to worry. Guess it wasn't enough to last an entire day!
    This week, 16 out of the 41 best performers in Value Line's 1700 stocks were from the computer, software or comp. equipment areas of the market. Looking back 13 weeks, it is easy to see why as these areas had been hit very hard. Tandem Computers is again the Best Performer for that period with a gain of 118.2%. Feathers are still flying at Boston Chicken as it declined 43.8% over the same period. It still takes a 47+% gain to get on the Best list and only a loss of 12+% to show up on the Worst. Speculation remains a High Risk item.
    Relative Valuation moderated a small amount this week but not enough to get it out of High Risk. There's been lots of comparisons recently to ten years ago. I'll throw my Relative Valuation into the ring, too. It was just 10 years ago that this index rose to levels seen again just recently.
    Divergence is still in the Average Risk range, but just barely so. That value has been relatively steady for several weeks _ just below the High Risk point. With 523 new NASDAQ Highs last week, it's obvious that the market is still happily charging ahead. The number of new lows is starting to creep up again, however. On the Nasdaq there were 243 new lows last week as well. This computes to a 4% value for High Low Logic. High Risk starts at 4.25%.
    My trading for last week had a southwestern flavor. I sold 7% of my position in Santa Fe Energy Resources at $10/share. With the recent spinoff of Monterey Resources, it's beyond my meager intelligence to be able to compute what the FIFO gain is there without reviewing it more carefully. The other sale is of about 13% of my position in Empresas ICA at $19.50. In that case, it was for a 31% LIFO gain and a bold 300% gain using FIFO. I initially bought those shares for $4.875 back in March of 1995 after the Peso Crisis. Thanks to AIM and Newport I'm now sitting with a Cash Reserve 40% larger than my original investment! Talk about performance with moderated risk!
    Bob Norman said he'll be able to resume sending out copies of the Newport demo and full Program this week. The Lichello book order arrived! 25% of the order is already on its way out the door, so he'll have to order again pretty soon!! If I can help any of you new users of Newport, please let me know either by email or you can ask publicly on the AIM Bulletin Board. I'll help as best I can.
    To the nearly 4000 visitors to our home page, I say "Thank you!" I certainly hope you are enjoying your investing and that AIM is helping you prosper.
    >>>>>_____AIM To Add Shares At The Right Price!_____>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 08/18/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________50% up 1 _ High Risk
    Growth Stock Mutual Funds___________33% unchanged _ High Risk
    IW Risk Oscillator______________________+3 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 18 + 13 week Treasury Rate 5.31 =____ 23.31 up 0.12* high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 12.7 up 2 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.9 unchanged ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.3 down 0.1 low risk
    (Zeal)
    * Represents All Time High since 1982

    REPORT _ WEEK OF 8/18/97: Not all four components are in the High Risk Zone, but the sum of the parts has shoved the IDIOT WAVE over the top. Yes, we're officially in a high risk market. The Idiot Wave and its Oscillator have been showing us early warnings for four of the last five weeks, but now it's official. Maybe that's why I've been getting so many AIM Sell orders recently. I'm sorry to say that we're going to have to be a little more rational with our exuberance for a while!
    As you may have noted above, the Relative Valuation figure is at an all time high since 1982. This plus my Speculation index and a very high Divergence value this week are enough to overwhelm the only component in the Low Risk area. From past experience, if all four components are at high risk simultaneously, then we're in for a real trouncing. It's been this sort of high risk event _ one in which only some of the components are in agreement _ that have caused quick, harsh markets that recover fairly quickly. The ever expanding P/Es of the market while interest rates have remained flat, is the single biggest concern. Next quarter's earnings better come in looking pretty! Also, if Mr. Greenspan were even to Rumor that he was thinking of bumping the interest rates, the market would be in for a big tumble.
    For three weeks running Tandem Computers is at the top of Value Line's Best Performers list. If you had purchased their stock just 13 weeks ago, you would have managed to see your investment rise in value 127.6%! However, you would have seen the Sky Falling if you had invested in Boston Chicken (little) at the same time. It's lost 46.3% in 13 weeks. Like a good friend used to say, "If you fly with the bird, you're gonna crash with the bird!" He was a large consumer of Thunderbird Wine and knew of what he spoke!
    I noted a confirmation of an oversold condition on Gold Stocks this week as I reviewed the Worst Performers list in Value Line. There's three gold stocks mentioned on that list. It's been my experience that when several stocks from one sector of the market show up on this list that usually they've been under heavy selling pressure and most likely oversold. If you have been interested in adding a precious metals stock or fund to your overall portfolio, this might be a good time to start an AIM account.
    Last week I had no AIM trades at all. Most of my stocks have flattened out so as to halt any further trading until the market picks a direction. The previous week had been so busy that maybe I just needed a break!
    Bob Norman asked that anyone that's ordered the Newport program or its demo to please be patient. It's been almost a month since the last order for more copies of Mr. Lichello's book was placed and still they haven't arrived. Guess the UPS strike even effected all of us! If you don't need the book, just take $5.00 off the usual order price and he'll ship the program without the book.
    >>>>>>>>>_________ AIM to Beat the Buy & Hold Investor! ________>>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 07/28/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________47% up 1 _ Ave. Risk
    Growth Stock Mutual Funds___________31% unchanged _ Ave. Risk
    IW Risk Oscillator______________________+4 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.6 + 13 week Treasury Rate 5.25 =____ 22.85 up 0.56 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 11.8 up 3.5 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.0 up 0.5 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.2 up 0.3 low risk
    (Zeal)

    REPORT _ WEEK OF 07/28/97 and 8/04/97: I apologize for not getting the report up here last week but I didn't have the ability to update the web site from afar. As you can see from the above data the IDIOT WAVE is again on the rise. One point up each week. Also note that if you add the Oscillator value to the IW, the total is above 50. These are the second and third early warnings of High Risk for the overall market in the last 4 weeks. Okay, my cash reserve is going up too, so what's there to worry about? Actually, AIM is doing a magnificent job of controlling the risk level of my portfolio. The cash reserve cookie jar is about 35% full right now and my net worth is at an all time high. I hope you are all following AIM's sell recommendations as your stock and fund prices rise.
    Relative Valuation is again this week's biggest demon. Only one week since January of 1982 has Relative Valuation been higher. The week of 9/04/87 is the date it rose to 22.90 (P/E = 16.9 + interest rate of 6.0). The Idiot Wave was at 55, having peaked just 3 weeks earlier.
    My Speculation index is again showing high risk this week. I noted that there were 5 stocks listed on Value Line's Best Performers list that had gains of over 100% in the last 13 weeks! It takes a gain of 64% just to make the list. On the other end of the spectrum, if a stock has fallen just 10.6% in the last 13 weeks, it makes the Worst Performers list! These are sure signs that market speculators are at work.
    The other two components of the Idiot Wave are under control. Zeal is still a low risk item. Even with the very high P/E that the market seems willing to support, there hasn't been a net increase in the number of issues traded on the NASDAQ. It has remained almost unchanged since the beginning of the year. Recently, the number of new lows has started to rise. It's not pushed the Divergence value into high risk yet, but we're right on the edge.
    In the last week my Mexico Fund (MXF) rose to a price that triggered an AIM trade. I managed to get $22 3/8 for about 10% of my shares. The account is nicely profitable and I have a healthy cash reserve now. Thank you AIM/Newport! At the end of the week, VLSI made a nice move and triggered another AIM Sell for about 6% of my position. I got $30 7/8 for the shares. My mutual funds TWCVX and TWCUX are both keeping the selling pressure on as well. Investing recently has been both fun and profitable!!!
    This weekly newsletter has now been accessed over 2000 times since early this year! I certainly hope you are getting your money's worth out of it!! Seriously, as our AIM bulletin board has been growing, the cross fertilization of ideas for investing continues to grow. One stock that comes to mind is Vitesse Semiconductor. I NEVER would have heard of that stock if it hadn't been for my bulletin board activity over the last 5 years. Thank you whoever suggested that I investigate it! I'm up over 400% in that account. (Was that you J.D.?)
    >>>>>______AIM to Sell the Rallys and Buy the Valleys!!!________>>>>>>>
    Best regards, Tom Veale in Wisconsin
    IDIOT WAVE _ Week of 07/21/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________46% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________31% up 1 _ Ave. Risk
    IW Risk Oscillator______________________+1 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.1 + 13 week Treasury Rate 5.19 =____ 22.29 up 0.19 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 8.3 down 3.6 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.5 down 0.9 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 up 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF 07/21/97: I'm rarely at a loss for words, but this market has just about put me there! The exuberance, whether rational or not, is making me very happy for now. AIM and I have been very busy doing our thing. My American Century Vista Fund (TWCVX) continues to do well so AIM/Newport and I sold off an additional 3% of the position at $14.55. Cash reserve for that account isnow back above 20% for the first time in several months. At the same time, I added 6% to my Vanguard Precious Metals Fund (VGPMX) following AIM/Newport's advise at a price of $9.24. As if not to be outdone, several of my stocks also demanded my attention. AIM/Newport had me sell an additional 6% of my VLSI position at $28.875, 6% of my DIGI holding at $28.75 and about 8% of my VTSS shares at $41.25. All the cash is accounted for and happily drawing interest at money market rates. Busy, busy, busy!!!
    Some trouble spots still exist in the Idiot Wave's components. Relative Valuation is still very high. In fact, it's as high as it's been since the summer of 1987. This isn't good and will self_correct one of these days. The average range for it is from 18.5 to 20.5, so we're getting pretty far into the High Risk area. Mr. Greenspan let us off the hook this time.
    I'm pleased to see the Speculation Index decrease this week. Again this week it takes better than a 50% gain in the last quarter to make the list of Best Performers in Value Line. It's hard to believe that there are 41 stocks that have increased in value by more than 50% in the last 13 weeks. On the Best Performer's list, 6 are computer stocks this week. Well, they were either over_sold back then, or over_bought now!! BTW, when did Detroit Diesel rate High Tech. status? It's up 51.1% for the last 13 weeks. Indigestion persists with shareholders of Boston Chicken as their stock has fallen another $3 since last week. The percentage loss is now 57% in 13 weeks. Where's the Maalox?
    If you have been following AIM's advise for your stocks, you should now have comfortable cash positions for many of your holdings. This is good! Last Friday's one day drop should be enough to keep most AIM investors aware of the risks involved in this market. Keep to your Business Plan! People seem to be getting used to the market's volatility. AIM doesn't mind, it can even prosper in such an environment.
    >>>>>__________AIM for Financial Security!!!__________>>>>>>
    Best regards, Tom in WI
    IDIOT WAVE _ Week of 07/14/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________46% up 2 _ Ave. Risk
    Growth Stock Mutual Funds___________30% unchanged _ Ave. Risk
    IW Risk Oscillator______________________+4 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.0 + 13 week Treasury Rate 5.10 =____ 22.10 down 0.06 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 11.9 up 0.6 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.4 up 0.9 high risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.6 up 0.2 low risk
    (Zeal)

    REPORT _ WEEK OF 7/14/97: I Like It!! This is as nice a market as we've had in a long time. Remember, make hay while the sun is shining! AIM will help you harvest at the right time if you will just follow its advise. Please note the continued rise in the Idiot Wave value. If we add the Idiot Wave value and the IW Oscillator together they add up to 50. That's the beginning of the High Risk area. We're not there yet, but this is sort of an early warning.
    My Speculation measure, the Best/Worst index shows high risk already, but this can continue for a long time. It 's the internals of this measure that are quite odd right now. If your stock is down just 13.6% in the last 13 weeks, then your stock is one of Value Line's Worst Performers! If your stock is to make it onto the Best Performers list, it requires a rise of 53% over the same time! Only 14% of the time has the Best Performers list included stocks with a minimum gain of 50%. The most significant of these times was after the '87 "crash" and after the end of the Gulf War. We haven't had a war or a crash in a long time, which makes this all the more unusual.
    Value Line's Index section likes to remind us of a few things. It has on the front page, the average P/E for stocks and the average Yield. Presently the P/E is 17 and the yield is 1.8%. To understand the P/E, remember that at the bottom of the market in 1974 Value Line had an indicated P/E of just 4.8. At the market peak in '87, it was 16.9. It was an uptick in interest rates in '87 that brought on the market decline that year. The Idiot Wave's Relative Valuation is higher than it's been any time since 1987.
    Please understand that I'm not complaining! Last week saw a nice addition to my net worth and profitable trades in several issues. I sold 2.8% of my Vista Fund (TWCVX) shares at 14.36, 5.4% of my DIGI shares at $27 1/8, 11% of my CGNX shares at $30 1/8, and 5.6% of my position in VLSI at $27 1/8. My Cash Reserve is rising in step with my net worth gains. That's comforting.
    Again this week, the discussion on the two AIM bulletin boards is lively. We now have over 2000 postings between Jim Battaglia's and my AIM topics! And that's just since February! Thanks to everyone that participates! I'm sure that there are plenty of lurkers as well, and from private mail, they are enjoying it as well. Over 3000 visitors have come to the AIM user's home page, so it appears that Mr. Lichello still has fans out there and that they are becomming computer literate! I really think that it took personal computers, a tight and tidy AIM software, market awareness and volatility to make Mr. Lichello's AIM as popular as it's becomming. I think AIM's time has come. Congratulations to all of you that work so hard at this business of investing.
    >>>>>>>________AIM for Financial Stability!!!________>>>>>>
    Best regards and keep on AIMing, Tom Veale in WI
    IDIOT WAVE _ Week of 07/07/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________44% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________30% up 1 _ Ave. Risk
    IW Risk Oscillator______________________+3 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.9 + 13 week Treasury Rate 5.26 =____ 22.16 up 0.19 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 11.3 up 3.2 high risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.5 down 1.4 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.8 down 0.3 low risk
    (Zeal)

    Pied Piper

    REPORT _ WEEK OF 07/07/97: The NASDAQ and Wilshire Small Cap. Indicies both finished last week in record territory. When the Idiot Wave cycled down to 41% back during the week of 4/25 the Nasdaq was at 1209. Since then the Idiot Wave has risen slightly to 44% while the Nasdaq has soared to 1467; a gain of more than 21%. As the cartoon above might bring to question, is this too much, too fast?
    You will note in the Idiot Wave components that the Relative Valuation figure continues in the high risk area. It is also at the highest level since the summer of 1987. This indicates that people are over_paying for equities on average when compared to history. They are assuming more risk than normal relative to what they could get from low risk interest producing assets. If we can believe that there is low inflation, maybe this will continue for some time. However, the further the pendulum swings one way, the bigger the return swing will be.
    Also of note this week is that my Speculation index is once again in the high risk area. Because the market has been kind since April, people feel more comfortable investing on a momentum basis. Contrarians (like AIM users and followers of the Idiot Wave) know that March and April was the time to invest. Back then investor's faces were the longest that they'd been since last summer. My Speculation index can remain in the high risk range for very long periods (as much as 6 months). Again, the pendulum usually has to complete its swing.
    The best news from the components is that Zeal (the change in the number of issues on the Nasdaq Composite) is the lowest it's been in a long time. It was 1992 when this component was last as low as it is now. If P/E's stay high, this number will start to climb. Companies like to go "public" when they can get payed a fat premium for each dollar earned.
    Mobile Telecom. continues to lead the Best Performers list in Value Line with a gain of 136% in just 13 weeks. The Crashing Phoenix award goes to Boston Chicken _ this week's worst performer. It managed to loose almost half its equity value in the last 13 weeks. After this wing trimming, will it fly again?
    AIM had me trigger my first sale of shares of Vista Fund (TWCVX) last week since pouring money into it in March and April. This sale represents a LIFO gain of 26.4% since then. I also sold a trickle of shares of Hong Kong Fund (WEHKX), adding to my healthy cash reserve. AIM had me spending money too. I bought more shares of Vanguard's Precious Metals fund at $9.92 as gold continues to fall in price. No wonder body piercing is so popular! With gold near $300/oz, who knows where gold hoops will next appear! Big government holdings are being sold by several nations. Could these bureaucrats be right this time? I'll continue to bet that my AIM is right on target.
    How are your overall Cash Reserves looking these days? If you have a large diversified portfolio, is your average cash reserve anywhere near 30%? For individual high beta stocks, is the reserve approaching 44%? How about those stocks that really should be pruned from your account? Are you ready to get rid of them? Remember, a healthy market is a better place to sell doggies than a correcting market. If you have stocks or funds that no longer show good long term potential, it might be time to switch horses or back_fill a lean overall cash reserve position.

    >>>>>>>>_______________AIM for Risk Controlled Growth!!_____________>>>>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 06/30/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________44% up 1 _ Ave. Risk
    Growth Stock Mutual Funds___________29% unchanged _ Ave. Risk
    IW Risk Oscillator______________________+4 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.9 + 13 week Treasury Rate 5.07 =____ 21.97 up 0.36 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 8.4 up 5.1 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.9 up 0.8 high risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 unchanged low risk
    (Zeal)

    REPORT _ WEEK OF 06/30/97: Last week NASDAQ showed its first decline in 9 weeks! I know that period was very nice to me, and I hope it was to you as well. AIM and I fattened up my Cash Reserves nicely and I enjoyed seeing the highest net worth numbers I've had yet. This decline probably indicates the beginning of a small consolidation for the markets. As shown above, this last week brought on a one point rise in the Idiot Wave's risk profile for individual stocks. Also to be noted is that the IW Oscillator is showing that market risk is starting to climb.
    The biggest move in the IW Components is the change in my Best/Worst Index. This shows an increase in the level of speculation. It now takes a 13 week gain of 48% to make it onto the Best Performers list in Value Line. However, if your stock's price declined only 16.6% in the same period, it would now be on the Worst Performer's list. Personally, I have just one stock on the 'Best' list (CGNX) and none at all on the 'Worst' list. That's fine with me! Mobile Telecom. is fast on its feet with a gain in the last quarter of 108.4% while IDEXX is still hounded by sellers of this veterinary supplier's stock.
    While I was in Ohio for the vintage car races, my Mexico Fund (MXF) triggered an AIM sell order for 10% of my position at $19.50. This raised my Cash Reserve nicely and the account now shows a 25% profit since starting 2.5 years ago. What's interesting to note is that I'd have a loss if I'd just Bought and Held. Please see this AIM Fund Example for more details on how AIM not only saved me from a loss, but provided me with a tidy profit. Also during the week, my long term bond fund (GSF) triggered another AIM Sell order. As of last Friday's close, my IRA with Ultra Fund (TWCUX) requested that I execute another AIM sell, but since I have about 33% cash reserve already in place, I chose to raise the Portfolio Control value instead. Ikon Office Solutions (IKN) dropped enough for AIM to require me to add almost 10% to my position there at $23.125. All that while I was off getting my fingernails dirty working on old English sportscars and driving at rediculous speeds around the Mid_Ohio race track! Best lap time for the weekend was 2:00.006, so I can't retire from racing yet. Still have to break under 2 minutes!
    There were 699 new Highs on the Nasdaq last week, but also 296 new lows. The rising number of new lows has pushed the Hi/Low Logic Index (Divergence) back into what I've determined to be a high risk area. It indicates that there's divergent opinion about the market's near term direction. It's also what helped nudge the Idiot Wave up another notch this week.
    The rest of my portfolio is having a respite now and won't tell what they'll do next. Of note is that the Worst Performer's list in Value Line has had some Telecomm stocks on it recently. Maybe they were over_cooked and needed to settle down a bit. My own DIGI has been in a holding pattern since triggering an AIM/Newport sell at $25.75 in mid_May. The market seems to be obsessed with quarterly results, so it may just take this next set of results to get things moving again. In the mean time, AIM's happy to collect interest on the CASH while it waits for the next move.
    Over at our AIM Bulletin Boards there's been some very interesting discussions about optimizing AIM's abilities to manage a stock or fund. Also of note are that our 'loyal members' have been reporting some nice, profitable trades recently. Please join us at the Silicon Investor site for plenty of AIM discussions, activity and ideas. In May we broke through 2000 visits to the AIM User's Group index page and now we're just about 150 visits from the 3000 mark! Thank you all for your persistence!!! In talking with Bob Norman at Newport, the AIM/Newport program is selling well. I asked if we would be seeing any major revisions in the near future, and he indicated that the next stage of development is going to take a while. It will include the ability to maintain portfolios for more than one individual and keep records separately. It will also let you enter stock and fund prices just once if more than one individual owns the same equity. As I learn more, I'll report on the changes.
    >>>>>>>>>___________AIM For Peace Of Mind!!!_____________>>>>>>>
    Best regards, Tom Veale
    IDIOT WAVE _ Week of 06/23/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________43% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________29% unchanged _ Ave. Risk
    IW Risk Oscillator______________________0 _ Flat Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.4 + 13 week Treasury Rate 5.07 =____ 21.61 up0.14 ave. risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 3.0 down 1.3 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.1 up 0.4 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 up 0.2 low risk
    (Zeal)

    REPORT _ WEEK OF 06/23/97: The NASDAQ had another superb week rising about 24 points. New highs are so common that one would think that the Idiot Wave should start to be worried. However, as you haveseen above, the Idiot Wave is unchanged this week and the IW Oscillator shows that risk shouldn't change much if all else stays the same. Speculation and ZEAL seem to be under good control while Divergence is creeping up just a bit. The last component, Relative Valuation, is still troublesome while still indicating high risk.
    My Ikon Office Solutions stock got hit last week and triggered an AIM buy at $23.125. This is a relatively new company as a single issue and I'm not sure what to make of it yet. My GENE has moved within striking distance of an AIM/Newport SELL order which pleases me and my net worth! That goes for my MXF as well. It needs just a few pennies to trigger my next AIM Sell. It also looks as though I should buy a bit more of my Gold_Precious Metals fund (VGPMX) and sell some of my Am. Century Ultra Fund (TWCUX). Collagen (CGEN) was hit so I added more shares there as well. That's a fair amount of activity for a week! It takes a gain of 35% to get noticed by Value Line's Best Performers while a drop of only 20% gets you posted to the Worst Performer's list. Mobile Telecomm. seems upwardly mobile with an 80.4% rise in just 13 weeks. At the other end of the spectrum is IDEXX Labs. They are off, in just 13 weeks, a full 65.1%. The problems of this veterinarian supplier seem to be hanging around like a bad case of Rabies! I'm off to go racing at Mid_Ohio near Lexington, OH this weekend, so will report when I get back about the event and what the market has been doing while I ignore it! I have a full schedule of 'good until cancelled' AIM/Newport orders in place to do my work for me while I'm gone. Try not to miss me too much while I'm away! I'll see if I can bring back a metal or two from the races!
    >>>>>>>>____________AIM For Prosperity!!!________________>>>>>
    Best Regards, Tom
    IDIOT WAVE _ Week of 06/16/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________43% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________29% unchanged _ Ave. Risk
    IW Risk Oscillator______________________0 _ Flat Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.4 + 13 week Treasury Rate 5.07 =____ 21.47 down 0.79 ave. risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 4.3 up 0.3 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.7 down 0.2 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.7 up 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF 06/16/97: This is the first week in a very long time that we have all four components in the Average or Low risk range. It seems hard to believe with the market up at new highs almost every day. All appears to be at ease as of right now with no nasty warning signs on the horizon.
    I'm hoping for good weather between Sarasota, Florida and Port Washington, Wisconsin as this is the week I bring home my new (old) car. It's about a 1300 mile trip and we'll start back on Thursday morning. Those of you that would like to read about the car should hop over to the Time_Warp Mark Two page and read about this car. It's taken about a year to complete and is now (we hope) road worthy! These three will be driving it back, so there's nothing to worry about!

    That's David Hinton on the left, Yours Truely in the middle and Edgar Boles on the right. All three will be gently driving the 1961 Jaguar Saloon up US 41. On the way we plan on taking lots of photos and then possibly publishing an article about it in a car magazine. I'll keep you posted as to our results. We also plan on stoping at the new Gingerman Raceway in South Haven Michigan on Friday or Saturday to test the car at speed on this new race course.
    I'm sorry to have such a brief report, but time is running out for me to get all packed for the Big Adventure! I'll try to make up for it next week with a full blown horror story!!! In the meant time,
    >>>>>>>>>______AIM High and Keep Some Powder Dry!______>>>>>>>
    Tom Veale in transit!
    IDIOT WAVE _ Week of 06/09/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________43% up 1 _ Ave. Risk
    Growth Stock Mutual Funds___________29% up 1 _ Ave. Risk
    IW Risk Oscillator______________________+2 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 17.2 + 13 week Treasury Rate 5.06 =____ 22.26 up 0.2 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 4.0 up 1.1 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.9 up 0.5 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.8 unchanged low risk
    (Zeal)

    REPORT _ WEEK OF 06/09/97: Another Friday close above the 1400 mark! That puts the NASDAQ Composite Index up over 16% since the Idiot Wave first hit its recent low of 41% back on April 28th. That is a magnificent turn_around. The Wilshire Small Cap. Index is also at an all time high. What's happening to the US market??? I think it is a big surge of foreign cash that is fattening up the Large Cap. stocks while domestic investors are moving assets to the smaller cap stocks. The Idiot Wave, while not unmoved, isn't too worried yet. Note this week that the Idiot Wave is up another point to show 43% Cash Reserve suggested for starting new AIM accounts with individual stocks. This equates to 29% Cash Reserve for starting new AIM accounts using diversified growth mutual funds. There is rising risk indicated by the +2 value of the Idiot Wave Oscillator. As you can note from the Idiot Wave components graphs my Relative Valuation figure is way above normal ranges. It has shown the ability to maintain such levels for extended periods, but the end results still haven't been pretty, long term.
    cartoon
    Even though the price per share of IDEXX Labs. has improved recently, this veterinary supply house is still smelling like a dead dog. Value Line indicates that its price has fallen 60.5% since 13 weeks ago. My own portfolio has one stock on V/L's Worst Performing Stocks list (Page 33 of the index section) and that's IKON Office Solutions (IKN). This is a relatively new individual stock recently split away from Alco Standard Corporation. The remaing portion of the company is called Unisource World Wide (UWW). Alco ceased to exist at that time.
    Lucky for me that I also have three stocks on Value Line's Best Performing Stocks list! On that list I have shares of CGNX, IDTI and VLSI. Cognex (CGNX) managed a new 52 week high of over $27 just today! A stock has to be up 33.6% in the last 13 weeks just to make it onto that wonderful, ever_changing list. All three stocks have been adding nicely to my Cash Reserves and my net worth in recent weeks.
    Just as I was about to get out the shovel and starting digging a hole into which I planned to cast Roberts Pharmaceuticals (RPC) dead shares, the little flee bitten pup wiggled. It is actually back above $12 per share again! So far there's no volume, maybe those folks over on the American Exchange haven't heard of this stock yet. RPC needs to do some medical miracles on its own bleeding performance to make me happy. My patience and their patients are wearing thin.
    If any of you have time, you should hop over to Newport Program's Web Page and look over his frequently asked questions. There's some handy ideas for keeping up your Newport accounts. Bob Norman of Newport promises some new stuff will be comming soon. If you are interested in more info on how to keep your Newport AIM accounts tuned up, try the HELP windows! I spent some time browsing pages of Help info there and found most all of the usual problems are addressed there. I've never been one to read directions, but this might change my mind!
    Again this week, our AIM bulletin boards are buzzing with new ideas. If you haven't yet managed to sign on, take some time and give them a good look. This site and the AIM home page are consistantly receiving about 100 visits a week. As new AIMers and Newport users come on line, the wealth of information (and, I suspect, the net worth) continues to grow. Thanks to you all!
    >>>>>>>>___________AIM, The Business Plan for Investors!_________>>>>>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 06/23/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________43% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________29% unchanged _ Ave. Risk
    IW Risk Oscillator______________________0 _ Flat Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.4 + 13 week Treasury Rate 5.07 =____ 21.61 up0.14 ave. risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________ 3.0 down 1.3 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.1 up 0.4 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.5 up 0.2 low risk
    (Zeal)

    REPORT _ WEEK OF 06/23/97: The NASDAQ had another superb week rising about 24 points. New highs are so common that one would think that the Idiot Wave should start to be worried. However, as you haveseen above, the Idiot Wave is unchanged this week and the IW Oscillator shows that risk shouldn't change much if all else stays the same. Speculation and ZEAL seem to be under good control while Divergence is creeping up just a bit. The last component, Relative Valuation, is still troublesome while still indicating high risk.
    My Ikon Office Solutions stock got hit last week and triggered an AIM buy at $23.125. This is a relatively new company as a single issue and I'm not sure what to make of it yet. My GENE has moved within striking distance of an AIM/Newport SELL order which pleases me and my net worth! That goes for my MXF as well. It needs just a few pennies to trigger my next AIM Sell. It also looks as though I should buy a bit more of my Gold_Precious Metals fund (VGPMX) and sell some of my Am. Century Ultra Fund (TWCUX). Collagen (CGEN) was hit so I added more shares there as well. That's a fair amount of activity for a week! It takes a gain of 35% to get noticed by Value Line's Best Performers while a drop of only 20% gets you posted to the Worst Performer's list. Mobile Telecomm. seems upwardly mobile with an 80.4% rise in just 13 weeks. At the other end of the spectrum is IDEXX Labs. They are off, in just 13 weeks, a full 65.1%. The problems of this veterinarian supplier seem to be hanging around like a bad case of Rabies! I'm off to go racing at Mid_Ohio near Lexington, OH this weekend, so will report when I get back about the event and what the market has been doing while I ignore it! I have a full schedule of 'good until cancelled' AIM/Newport orders in place to do my work for me while I'm gone. Try not to miss me too much while I'm away! I'll see if I can bring back a metal or two from the races!
    >>>>>>>>____________AIM For Prosperity!!!________________>>>>> Best Regards, Tom
    IDIOT WAVE _ Week of 05/26/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________42% up 1 _ Ave. Risk
    Growth Stock Mutual Funds___________28% unchanged _ Ave. Risk
    IW Risk Oscillator______________________+4 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.9 + 13 week Treasury Rate 5.31 =____ 22.21 up 0.49 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________4.3 up 2.0 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.2 down 0.3 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.7 down 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF 05/26/97: The sound of breaking records filled the air earlier this week but this morning (Friday) that sound was replaced with the splatting of Lemmings jumping from the high tech ledge. By mid_day the worst seemed to be over, however. Our faithful companion the Idiot Wave did notice that the market has risen 15% in just a month. It reacted by rising one point to show AIM investors that 42% cash is appropriate for new individual stock accounts. Growth stock mutual fund AIMers should be starting their accounts with 28% cash reserve. The Idiot Wave Oscillator is now showing +4 indicating a rise in market risk. This is the first up_tick in the Idiot Wave in 18 weeks! It was just 26 weeks ago that the Idiot Wave challenged popular opinion and claimed the market was heading into a High Risk period.
    The component that is most troubling of the bunch these days is the Relative Valuation figure. It's now at the highest level since 9/18/87 _ just a month before the dreaded "crash" in October. Let's compare the rest of the Idiot Wave's components at that time to see if there are other demons of which we should beware: Speculation = 7.4 (ave. risk), Divergence = 5.3 (high risk), and Zeal = 2.3 (high risk). So, in Sept of 1987 we had three of the four components showing High Risk with one in the Average risk range. By comparison, I'd say we're not in that bad a shape today. However, I really don't like the looks of the Relative Valuation figure right now. It's never been a bullish sign to have it this high. Has the market just gotten a bit ahead of itself? I have very distinct memories of October 19th, 1987 and don't look forward to the market pulling that sort of shenanagans just because the 10th anniversary is comming!
    Mobile Telecommunications has been fast on its feet, registering a blistering 95.4% gain in just 13 weeks! As happy as investors in Mobile are, their counterparts invested in Medical Computer Systems caught a bad virus and lost 58.6% of the share value in the same period. Geshundheit! Overall, the good stocks are up more than the bad are down. This means that speculation is starting to rise. Let AIM guide your profits into a safe harbor by selling into the strength.
    The gods smiled on my own account giving me AIM designated trades in GSF, VLSI and DIGI. Another 5% of my DIGI left Veale's Equity Warehouse at $25.75 while about 5% of my VLSI shares were shipped off at $25.625. I keep the GSF bond fund shares as a source of income but still use AIM to trim off a bit of capital gains once in a while. This week AIM had me sell about 5% of my remaining shares at $9.50. That sale raised my cash reserve for that account to 12%. That's about all that it will ever need. In early 1995 this closed end bond fund dropped enough to exhaust my cash reserves, so it's nice to have it fully funded again. American Century's Ultra Fund (TWCUX) jumped up enough for my IRA account to have sold shares. However, I already have adequate cash reserve there, so I bumped Portfolio Control up in that account by half of what the market order would have been. I also did this same proceedure with VTSS this week as it surged briefly to $38/share. Now all's happy.
    I still have a few dead fish stinking up my portfolio, but most everything is looking better than it has in a long time. We're in the middle of the Average Risk range with the Idiot Wave, but that doesn't mean NO risk! Keep to the AIM plan and you will do fine.
    >>>>>>>>______AIM for Portfolio Risk Management!!!_______>>>>
    Best regards, Tom in WI
    IDIOT WAVE _ Week of 05/19/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________41% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________28% up 1 _ Ave. Risk
    IW Risk Oscillator______________________+3 _ Rising Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.5 + 13 week Treasury Rate 5.22 =____ 21.72 up 0.54 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________2.3 up 1.7 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 4.5 down 0.9 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.6 up 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF 05/19/97: The market seems to have hedged its bets enough that no matter what Mr. Greenspan and friends did, the market was going to be happy! It looks like they want to sell hedging devices more than they want to sell equities anymore!! Gee, I wonder who makes all the commissions on those options, anyway? Hope you like this week's cartoon.
    The rapid turn in the marketplace has driven the P/E back up while the short term interest rates have remained somewhat stable. The sum total of those two items is what I term Relative Valuation. It's moved way back into the high risk zone. It's higher than any times other than 1983 and 1987. The moderate levels of the other components is less scary. This week the Idiot Wave suggests that new AIM accounts be started with 41% cash reserve with individual stocks and 28% for diversified mutual funds. Our Idiot Wave Oscillator shows +3 this week indicating that market risk is on the rise again.
    DSC Communications (DIGI) managed to rise enough for me to get an AIM/Newport SELL order filled. 6.3% of my position left me at $24 per share and the cash is now resting comfortably after some hard work turning in an 86% LIFO gain since the end of October, 1996!!! Thank you DIGI, Thank you AIM! My next Sell in DIGI will represent 5% of my position and will occur when the price hits $25.75. Last week I also had about 10% of my Cognex (CGNX) leave my posession at a very nice profit. All in all, it was a pretty good week. My IRA is just at the edge of selling some more shares as well.
    Allwaste Inc seems to have gone up as much as it's going to for a while. It's up 75.6% in just 13 weeks, but the price hasn't changed much in the last two weeks. IDEXX Labs. (veterinary supplies) is again in the doghouse with an indicated loss of 59.1% since 13 weeks ago.
    We've survived yet another bout of Mr. G's worrysome looks, so maybe the stock market will look less like a bond market for a month or so. Hope that's good!!! My cash reserves are in good shape again, so I'm okay either way the market turns from here. Wish those pesky P/Es would just drop a few points, however!
    >>>>>>>>_________________AIM for Profits!!!_________________>>>>
    Best regards, Tom in WI
    IDIOT WAVE _ Week of 05/05/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________41% unchanged _ Ave. Risk
    Growth Stock Mutual Funds___________27% unchanged _ Ave. Risk
    IW Risk Oscillator_______________________2 _ Falling Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 15.5 + 13 week Treasury Rate 5.35 =____ 20.96 up 0.11 high risk
    (Relative Valuation)
    Veale's Best/Worst Index _______________________________1.3 down 1.4 low risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________ 3.5 up 1.0 ave. risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.6 unch. low risk
    (Zeal)
    REPORT _ WEEK OF MAY 5, 1997: Well, that Phoenix that I discussed last week seems to have collected itself and once again taken flight! What a magnificent one week run. I actually was able to participate! I received Rush Orders and delivered more shares of stock from Veale's Equity Warehouse. The first order was for 5% of my VLSI position at $23. A second order was for another 5% of my VLSI inventory and I had to air freight it to the new owner. That person was willing to pay $24.25 for the shares, so I let them go. (FIFO 12% gain, gross) Then, another emergency order for 10% of my IDTI inventory came in on the hot line! Luckily, we had a few shares left in the back of the Warehouse and were able to ship them off Special Delivery to their new owner. Because of the rush, the customer was willing to pay $13.625 for those shares. (FIFO 43% gain, gross)
    I closed a position in Vitro SA (VTO) getting $8.125 for the shares. This account is closing with a pretax gain of about 34% in two years. I decided that like in the song from "Oklahoma!", "They've gone about as fer as they can go!" I've had some great AIM trades along the way but am feeling like moving on.
    My order to add some inventory to my Vanguard Precious Metals Fund (VGPMX) filled on Monday at $10.38 adding about 5% to my holdings there. Phew!!! What a workout!
    Even my DIGI is looking like it might be attractive to a new buyer. We're still a couple of bucks away from making a deal, but that's closer than two weeks ago.
    This is almost getting to be fun again! Our favorite market prognosticator, the IDIOT WAVE, is unchanged this week showing 41% cash reserve suggested for new AIM accounts. My overall account is at about 32% cash reserve, so having AIM sell a few shares will give me comfort. If you are starting an AIM investment in mutual funds, the Idiot Wave suggests that you reserve 27% cash reserve. The Idiot Wave Oscillator is showing that market risk is still moderating at _2.
    As shown above, my Best/Worst Index has finally let us know that Speculation had been dashed on the rocks by the Idiot Wave. Heritage Media 'A' rose just 69.2% in the last 13 weeks while shares of Informix dropped 70.6% in the same period. It's rare that Value Line's Worst Performer is down more than the Best Performer is up. This has always been a short term bullish sign for the market. For 29 weeks the sum of Value Line's P/E ratio and the 13 week Treasury rate have shown a high risk condition. This condition persists this week, still. Earnings weren't good enough to get the P/E down to where this component was back to average risk. It's up to either earnings or interest rates to bring this down to a lower risk profile. I don't know what Mr. Greenspan will do at the next FED meeting comming up, but I hope that he won't aggrivate a bad situation by raising interest rates. Until the Relative Valuation figure drops back into the Average Risk range, I'll think of what's happening in the markets as a clearing in a cloudy sky.
    David Dreman, in his book "Psychology and the Stock Market", discusses "groupthink" and its dangers. You've probably heard me discuss Lemming Effect before and much of that is really the same as Mr. Dreman's groupthink. The more money being managed by institutions as a percent of the total market, the worse the situation becomes. I think I'm more un_nerved by the market's rapid rise than by its fall over the last few months. I'm also very glad to have AIM along guiding my hand. I personally believe that AIM is more useful today than in any market that has preceded this one. Its cool thinking in this volatile market is comforting. Let AIM help you turn consistant profits as the market churns about.
    >>>>>>>_______________AIM for Steady Growth!_______________>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 04/28/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________41% down 1 _ Ave. Risk
    Growth Stock Mutual Funds___________27% down 1 _ Ave. Risk
    IW Risk Oscillator_______________________5 _ Falling Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 15.5 + 13 week Treasury Rate 5.35 =____20.85 down 0.04 high risk
    (Relative Valuation)
    Veale's Best/Worst Index ______________________________0.1 down 1.5 ave. risk
    (Speculation)
    NASDAQ Hi/Low Logic Index__________________________2.5 unch. low risk
    (Divergence)
    % change, # of issues on NASDAQ________________________0.6 down 0.1 low risk
    (Zeal)
    REPORT _ WEEK OF 04/28/97: Is there any good news after last week? Has the Phoenix finally burned with no hope of rising again from the ashes? Only an Idiot would say that market risk is falling! That's right, our favorite idiot is saying just that. As with the previous week, the Idiot Wave actually declined another point. It now indicates that one should be 59% invested and 41% cash if starting a new AIM account with individual stocks. This equates to being 73% invested with mutual funds while holding 27% cash reserve for those AIM accounts. Mr. Lichello said it's a good thing to be 100% invested, but only at the bottom of the market! We're getting closer all the time. It was mid October when the IW was last this low and the NASDAQ stood at 1248. We've been running on a treadmill for five months and sweating, with the appearance of going nowhere! Good thing we have AIM to keep our portfolios in shape! The Idiot Wave Oscillator is showing falling risk as well with a _5 reading. If all stays the same, that means the Idiot Wave will eventually fall to 36.
    Our Relative Valuation figure remains stubbornly in the High Risk area. We get a batch of good earnings reports just in time to watch short term interest rates creep up. It ends up being a wash. We're now just 1/10th away from having our next IW component drop to the Low Risk area. My Best/Worst index is now at the lowest since the bottom of the '96 summer market. From that low, the NASDAQ rallied 22% to its new high set earlier this year. Coincidentally, the Idiot Wave stood at 41% that week too.
    It's easy to see why the Best/Worst index has dropped so far when you realize that the best performer in Value Line's 1700 stocks is up just 68.6% in the last 13 weeks (Heritage Media 'A') and the worst performer is down 63.8% (Informix Corp.). If you had owned both for the last quarter, your account would be just about at break_even. Regarding Value Line's Best Performer's list, there are lots of specialty retailers shown on that list right now. If you own these stocks, AIM/Newport should have been giving you market orders to SELL. Please follow AIM's advice as a sector rotation out of this group could hang these stocks in the Bargain Basement. You'll want to have that cash reserved to repurchase these shares once again.
    Last week saw the price of Collagen shares (CGEN) drop to a price where AIM purchased about 8% more. Those shares were added to my account at $16.625. AIM and I last sold shares at $23 in January. This general price range has persisted since early in 1995 and has allowed trades at both ends. AIM and I also bought shares of Ikon Office Solutions (IKN) at $26.25 and Chiron (CHIR) at $18. The market continues to nibble away at my Cash Reserves and isn't giving me much opportunity to replenish them. If the happiest day in an AIMvestor's life is when he's 100% invested, then I'm getting happier all the time!!
    I don't have a cartoon for you this week as I didn't see anything funny about last week's market. If you are a Dow Industrials investor, last week was good to you, if you are like me and have money in the NASDAQ stocks, it wasn't as pretty. My American Century Vista Fund (TWCVX) is begging for more money and I'll comply. It closed last week at $10.83 down 32.5% from its former high. Looks like this small cap fund has lost some of its momentum. Pretty soon its holdings will become Value Stocks if the prices keep falling!
    >>>>>>______AIM to Manage your Carefully Selected Equities!______>>>>>
    Best regards, Tom Veale in WI
    IDIOT WAVE _ Week of 04/14/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________43% down 2 _ Ave. Risk
    Growth Stock Mutual Funds___________29% down 1 _ Ave. Risk
    IW Risk Oscillator_______________________6 _ Falling Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 15.3 + 13 week Treasury Rate 5.28 =____20.58 down 0.74 high risk
    (Relative Valuation)

    Veale's Best/Worst Index ______________________________0.7 down 3.5 ave. risk
    (Speculation)

    NASDAQ Hi/Low Logic Index__________________________2.9 up 0.6 ave. risk
    (Divergence)

    % change, # of issues on NASDAQ________________________0.4 down 0.1 low risk
    (Zeal)

    REPORT _ WEEK OF APRIL 14, 1997: Another week's data accumulated and when added, compiled, averaged, smoothed and digested, shows that what was painful for the fully invested was actually good for AIM investors both new and experienced. This week's Idiot Wave reading of 43% cash reserve is the lowest risk level we've seen since last October when risk was rising quickly. Mutual fund investors will be happy to see that the IW is suggesting that 29% is now the cash reserve suggested for new growth stock fund accounts. These two values are down 2 and 1 respectively. The Idiot Wave Oscillator, which gives a feel for the direction of the risk profile, is showing _6 indicating a rapid drop in market risk. The Oscillator shows that if all things were to remain the same for several weeks, the Idiot Wave would eventually drop to 37%. There's some comfort to be gained seeing the IW decline in harmony with our own personal AIM cash reserves. The skies may not have cleared yet, but at lease the storm seems to be waining.
    Filene's Basement went down a few stories but is still the Best Performer in all of Value Line this week with a gain of 72.7% in just 13 weeks. Health Management Systems got a bad case of the sniffles, sneezed on investors for a loss of 65.2% in the same period. Gesundheit!!!!
    I continue to be amazed (and confused!) by Value Line's Timeliness Ratings. This week V/L shows Ascend Communications with a Timeliness of '1', indicating a great time to own this stock. Now, I agree that it's a better time than before it dropped 35%, but it's still showing a share price that's six times Book Value. During times of 'rational exuberance' this stock would probably sell for about $15/share instead of near $40. The lesson here is that just because stocks are down in price doesn't mean that they are bargains. It might mean that they are over_price by less than before! Please be selective as you hunt for new AIM stocks.
    Of further note on Communications stocks, I see in the V/L Worst Performers list that nearly 20% of the stocks listed are involved in communications, networking or related fields. This is the result of a major 'sector shift'. For those of you that like to do some sector shifting, this looks like it's been hit pretty hard and should be ready for your participation.
    The cartoons that I've been placing here on the pages seem to have been a hit, so I continue this week with:

    Well, doesn't that pretty well summarize everything you've been able to learn from most analysts?

    I'm due to add to my collection of shares in American Century's Vista Fund (TWCVX) again this week. AIM/Newport isn't being bashful either. It wants me to use about 25% of my remaining cash reserve. Who am I to argue. The price per share is down nearly 30% since AIM/Newport last told me to take some money off the table. That was last October. Thank you AIM/Newport!
    Where will the next rally develop? Will it be high tech? Health care? Large Cap.? Small Cap.? Momentum stocks? Value stocks? My guess is the stocks, that were good values before this correction began, that haven't fallen much will be our newest market leaders. There are still hundreds of rapidly growing companies with a Price/Book Value of less than 2X so why pay 6X for one? Be selective in this market and AIM/Newport will take care of the rest.
    I had errored in my editing of this page a few weeks ago. I eliminated the link to the previous 3 weekly reports by mistake. Note below that you now have that ability back. Sorry!!
    >>>>>>>>>_________AIM for Proper Asset Allocation!!______________>>>>>>
    Best regards, Tom in WI
    IDIOT WAVE _ Week of 03/31/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________46% down 1 _ Ave. Risk
    Growth Stock Mutual Funds___________31% down 1 _ Ave. Risk
    IW Risk Oscillator_______________________4 _ Falling Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 15.9 + 13 week Treasury Rate 5.41 =____21.31 down 0.26 high risk
    (Relative Valuation)

    Veale's Best/Worst Index ______________________________3.6 down 3.0 ave. risk
    (Speculation)

    NASDAQ Hi/Low Logic Index__________________________3.4 down 0.2 ave. risk
    (Divergence)

    % change, # of issues on NASDAQ________________________0.3 down 0.4 low risk
    (Zeal)

    IDIOT WAVE _ Week of 04/07/97

    Suggested Cash Reserve For New AIM Accounts Using:
    Individual Stocks____________________45% down 1 _ Ave. Risk
    Growth Stock Mutual Funds___________30% down 1 _ Ave. Risk
    IW Risk Oscillator_______________________5 _ Falling Risk
    (Click for further EXPLANATION)

    IDIOT WAVE COMPONENTS:

    Value Line P/E ratio 16.0 + 13 week Treasury Rate 5.32 =____21.32 up 0.01 high risk
    (Relative Valuation)

    Veale's Best/Worst Index ______________________________4.2 up 0.6 ave. risk
    (Speculation)

    NASDAQ Hi/Low Logic Index__________________________2.3 down 1.1 low risk
    (Divergence)

    % change, # of issues on NASDAQ________________________0.3 unch. low risk
    (Zeal)

    REPORT _ WEEKS OF 3/31 AND 4/7/97: Sorry for the week off of reporting, I was having a great time with my family vacationing in the Caribbean Sea. Looks like I missed some fun! I'll be combining both week's data here for your review.
    You will all be pleased to note that the last two weeks of horrors have at least done some good! Each week has seen a drop in the Idiot Wave risk indication. Well, if the market's already fallen some, I guess that means it's closer to its next bottom!! A correlary of the Kaufman's Law of Markets is "A market has to be way up to fall way down!" (Kaufman's Law states "To come from way behind, first you have to be way behind!") That's just it. We had the market risk peak in December (Idiot Wave at 51%) about a month before the NASDAQ peaked. The NASDAQ dropped to about 13% below its former high last week and now the Idiot Wave has signalled that we need just 45% cash for starting new AIM accounts with individual stocks. This equates to 30% cash reserve for starting new mutual fund accounts using AIM as their risk manager. The risk of starting a new AIM account has moderated quite a bit. Also, we now have a lower cash 'ceiling' for selling. When I left town, the IW was down to 47% and the IW Oscillator was _2. Last week it showed 46% with the Oscillator at _4 and this week it's at 45% with the Oscillator at _5. Not only is the Idiot Wave dropping but if all remains as is, it will decend to about 40%.
    Note how quickly the Hi/Low Logic Index has gone from very high risk to its present low risk reading. If you remember, there had been differing indications between the NYSE and NASDAQ Hi/Low Logic indicies. Maybe it was just shouting 'the end is near!' Since the IPO surge has all but ended for now, our Zeal indicator is now at low risk as well.
    It's a tuff job to communicate bad news. That's especially true if you are the working for Cascade Communications! It is last week's WORST Performer showing a loss of 61.8% in 13 weeks. It's in the $20s after peaking at over $90 not that long ago! Sounds like a cascade of lemmings going over that particular waterfall. Not to be outdone in the Bowser department, IDEXX, a maker of veterinary equipment and supplies pooped on its shareholders stating earnings estimates had gone to the dogs! This caused a 66.8% drop in its share price in the last 13 weeks!
    After elevating to the penthouse of gains in the last quarter, Filene's Basement rose 101.4% to make Best Performer for the last two weeks running. It wasn't that long ago that it was a Worst Performer.
    None of my good until cancelled orders filled while I was on vacation. I'm due to buy more shares of GENE and my mutual fund TWCVX, however.

    Since the Idiot Wave first called for a High Risk market back in December, the NASDAQ has now declined about 7% and about 13% from its peak. Our last troubling IW component, Relative Valuation, is still showing the market over_valued relative to short term interest rates. This will take care of itself if the markets stay down or continue to fall. We AIMers have a chance to add to our best positions here as we get requests to buy more shares. This is a responsible thing to do. Make sure the fundamentals of these stocks have remained intact and then use your cash reserves as AIM/Newport suggests.

    >>>>>>______AIM for Fiduciary Responsibility!____>>>
    Best regards, Tom Veale in WI
    1998 Newsletters
    January; February; March; April; May; June; July; August; September; October; November; December;

    1999 Newsletters
    January; February; March; April; May; June; July; August; September; October; November; December;

    2000 Newsletters
    January; February; March; April; May; June; July; August; September; October; November; December;

    www.aim-users.com/arch97.htm