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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Boa Babe who wrote (14403)1/7/2000 11:30:00 AM
From: mauser96  Read Replies (2) of 54805
 
One of the key points of Gorilla Game investing is that it's intended to be a low risk form of buy and hold investing. The more margin you use , the more you reduce these qualities since you increase the risk and could be forced by a margin call to reduce the holding period for a stock. The only good financial reason for debt is if the return is more than the cost (both after tax) and if there is a high probability of the return, since there is a high probability you will have to pay off the loan. Most people stretch this to include a house, since a place to live is a necessity, wheras other debt for most of us is a matter of wants rather than needs.
Small amounts of margin are probably OK (though they intrude on the purity of the gg) as long as you are young enough to make up losses. Psychologic studies have indicated that fear is at least twice as powerful as greed, and margin leverages this even more, thus making investors even more likely to act irrationally in moments of crises.
All IMHO only...
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