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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: DlphcOracl who wrote (3813)7/15/1999 9:35:00 PM
From: carl a. mehr  Read Replies (1) of 54805
 
All,
It's a big gamble to have everything in one stock. I played that way with a sure winner five years ago, Intel, and have made out ok. Many or perhaps most of us high-tech gamblers like to expand our stock portfolio 100% by the use of 50/50 ratio of equity to margin credit.

Margin credit for a concentrated stock portfolio becomes more difficult to obtain (or totally non-obtainable) depending on the securities involved and the brokerage firm. If margin is obtained, margin calls may come at a much higher equity ratio, than would normally be the case for a diversified portfolio. For anyone using margin, I would highly recommend that a single security position is kept below 33% of the total long security position. ( My holdings in Intel are not down to that level, but moving in that direction).

After reaching a very depressed portfolio value on August 31, 1998, I am happy to look at a portfolio gain since that time of 312%. The only figures that matters are the year to year gains. YTD stands at 51%. Proper use of margin can work wonders!

Compared to the big winners out there playing AOL and the like, I am probably doing rather poorly. A quality diversified portfolio makes you sleep well..
humble carl

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