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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: SwampDogg who wrote (19006)	8/23/2006 7:13:44 PM
From: koan	Read Replies (1) of 78413

Swamp dog can you divide? 3 into 15 is 5 (that is the leverage!!) for every 3 K wts you are CONTROLLING 1 SHARE OF K (that is 5 to 1 leverage when the wts are $1 and the stock is $15. For $3 you are controlling a $15 stock! If the wts were $2.50 then the leverage would be 2 to 1. You watch how the wts start screaming if K takes off! For every dollar K rises the wts will rise about 25% of the rise or about .25 per dollar (one has to subtract the cost of the wts). Look at where the wts are now and then look at where they are when K reaches $16 and $17 and $18. The proof is in the pudding. I do not like to margin!! What if K or any company goes broke (like enron), or something bad happes to the stock for some reason and it gets whacked, who would lose the least amount of money? Wts are protection on the downside as well as leverage on the upside. The K wts will follow the stock up, but if K collapses all I lose is the cost of the wt. And using trailing stop losses on margin accounts can get you whipped out, not to mention the hassel and interest you pay on the margin account. As mentioned I made better than 500% over the last 18 months and most of that was with wts. In fact at one point I was up around 800% before the gigantic correction which caused me to panic a bit-lol. To each his own. You also said you sold all your base metal stocks and base metals were going to crash--they do not seem to be crashing to me!! And I think you also said we should keep the thread to just gold issues. What kind of wisdom is that when base metals are having the run of a lifetime? I will make it a point keep you informed as to how well the K wts are doing if K keeps moving up as I expect-grin.

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