Intel Corporation (INTC) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC)

INTC 51.76

+6.5%

9:40 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: nihil who wrote (98199)	2/4/2000 8:13:00 AM
From: GVTucker	Read Replies (1) of 186894

nihil, RE: Would you margin stocks like QCOM and JDSU that increase by approximately 10 - 20 X a year at 8.5%. Ex ante that is not a question easily answered. Would you margin 30 year bonds yielding 6% at 8.5%. The answer here is not so simple either. The biggest users of margin debt (hedge funds) are margining 30 year bonds at a 10 to 1 debt/equity ratio right now. The reason is that their borrowing costs are not close to 8.5%. Instead, people out there margining long bonds are borrowing their money in yen, and thus are paying rates closer to 3-4%, generating what they call 'free money'. Some people who are a little more risk averse are borrowing in euros, still paying a lot less than the 30 yr yield of 6%. The leverage in the hedge fund community continues to frighten me; a lot of people didn't learn much from the LTCM debacle.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next