- Personal Finance
How would Robert Lichello make $1,000,000 in the stock market using the AIM formula
Making $1,000,000 automatically in the stock market?
I recently began reading a book titled How to Make $1,000,000 in the stock market automatically by Robert Lichello. His book was first published in 1977, then again a new 4th edition was updated and made available. I am normally skeptical of books like this. I have read several over the years discovering the information to be lacking, unbelievable. The cover did a good job of selling me with its " The million copy bestseller, 4th edition newly revised and updated. When I picked it up, i was further sold by the back cover info. Quote" You don't need to be a stock market expert. You don't need to be a math whiz, and the most important to me was You don't even need a big bankroll."
I bought the book excitedly, wondering if I have found a way to help supplement my income with stock market profits. From page one I was hooked. Robert's writing is easy to read, believable, challenging me to read further to the meat of the book. It wasn't long before I was in the chapter discussing the principles of making $1,000,000 automatically. Surprisingly, Roberts ideas made sense. Still a skeptic, I needed to put his formula to the test. Losses in the stock market would only put me further behind.
I did check the internet for positive reports on his formula, his way of making money. I found a site offering examples of successful trades. So successful, this website is going to become a subscription based help line to making profits. More will be written on this later.
Not having any money currently to invest, my method to test this concept is to review the formula in the past to verify if it would have worked. Fortunately data is available to test the theory.
The two stocks I chose are considered penny stocks because they are under $5.00 a share. They are CLRT and SGMO. A spreadsheet showing my decisions each month with the year end results has been added to the beginning of this hub. For the purpose of this test, I invested a total of $2000, $1000 in stock purchases with $1000 to use to help build profit and maintain a positive cash and stock position.
Looking at CLRT you will find the following to be true.
* CLRT is a stock that started at $2.65 a share in Dec 2009 and ended at $5.00 a year later. Had you not done anything, your profit for $1000 in this stock would have yielded the holder a nice profit of $923.65. Had they invested all $2000 in the stock, the profit would have been double the $923.65 or over $1800. Automatic Cash Machine generated only $847.46 profit during the same period.
What you do find very positive is your cash position of $1643.45 which can then be used to buy stock should the stock drop the next month. there are no guarantees. This method kept your original investment safer with growth.
Your cash position throughout the year was there for you to use to respond to the market conditions. Being totally invested limits your response should the market change, the stock drops, potential to lose your entire investment is a possibility.
SGMO on the other hand shows a profit of $1020.55 over 1 year. Had you bought the stock and held for a year without action, you would have lost $.59 a share or around $99 a share. Considerable more profit. The amount of cash available has been reduced considerably putting you in a stock position yet still capable of adding shares if the decision window dictates to do so. You would also have used up your original $1000 and added approximately $500 to your cash account. By the end of the year you gained back your $500, your profit is found in your stock position. What happens from here would be interesting and probably would generate an entirely different picture.
I am encouraged by what I see. I am willing to pursue reading to learn more and discover how he makes $1,000,000 Remember this was a minor test to determine what results were possible. The more we learn, the more we can determine if this formula is one we want to use as a guide. Join me in this journey of learning what great opportunities there are using the AIM method of investing.