You seem to have the relationship between margin debt, equity gains and spending well thought out , and I would consider you an educated investor who is aware of the risks and reward of leverage. I don't think most retail investors (and day traders) have thought this through.
Well thanks, Alok.
I consider an abortive attempt as a broker straight out of college (I was pretty disgusted with the business and hated to "sell") and a couple of years trading for money managers as a nice financial "education". One thing I learned is that I would not trust my money to 90% of the money managers out there, but at least they don't have the conflict of interest inherent in the traditional brokerage industry.
It's a long ways off from OO application design and programming. Totally different employee environment, few people in the I.T. business are financially educated to the point we are used to here on SI. I kind of act as the office investment evangelist, helping others to gather up their scattered, ignored 401k's, and start an IRA. Point them to books like "Millionaire" and "The Gorilla Game", etc.
Funny when you see one of these absolutely brilliant people befuddled by a short straddle diagram on my whiteboard. :)
As far as my own margin debt, I try to keep it above 70% equity minimum and I've never had a margin call. I also only use margin in one account. Since I am 90% in G&K stocks, I really only use margin for ST option plays (usually sell side), and long a few calls/LEAPS. When I can also ST trade about 5% of my portfolio value for an extra few grand/week, it makes the measly margin rate worth it. I don't preach this stuff, I'm LTB&H on the pulpit.
One of the "problems" I have now is that I actually have too much SUNW in this account. The basis is in single digits, and I'd hate to sell, even when I believe several of my other stocks will outperform this year. So I try to make up the difference by trading options around it. I've covered all my calls when it dipped to the low 70's and am looking for another peak soon.
Technically I think we can punch through 87 if the NAZ cooperates. We've been basing in the same range since early December, RSI and Momentum slowly dropping off all the while. I think mid 90's is possible in that case.
Or, do we put in a double bottom from the last peak?
I know others on the thread write calls, so I am curious as to what others think about a ST peak.
-JG@FinallyWorkedLessThanATwelveHourDayToday.com |
