Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Mani1 who wrote (105720)	4/14/2000 6:55:00 PM
From: Epinephrine	Read Replies (2) of 1570833

RE: <I asked my broker how widespread margin calls were. His answer was pretty unsettling: "Almost everybody is getting them".> Mani Ahmadi (Mani), I am not in any danger of a margin call right now since AMD has held up so nicely but I have been thinking of the margin call situation and the more I think about it the more it seems almost perverse. The stocks are down, so small investors get margin calls which forces some of them to sell which causes more margin calls. The perverse part is that some of the small investors will find the money to cover. Since they are sending money in and no money is actually being lost, the money is just moved from the weak hands to the strong hands, so the net effect is money is flowing into the market. Then when the market recovers some of that extra capital is reinvested which contributes to a relief rally and the stocks shoot back up. Just without the weaker investors. Talk about a shakeout! Regards, Epinephrine

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