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Politics : Formerly About Applied Materials
AMAT 301.11+6.9%Jan 9 9:30 AM EST

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To: Stefan who wrote (9948)10/28/1997 11:47:00 PM
From: Stu Bishop  Read Replies (1) of 70976
 
Stefan,

I have to differ on margin investing. If I'm not confident enough in my investments to buy on margin, then I'm not confident enough in my investments. Then my but ought not be in the stock market.

I'm not saying that "everyone" should do it because I do. But I am saying that I'm not gambling. I don't gamble, I invest. There is a lot more certainty to investing (at least my approach to it) in stocks than gambling.

Included with buying on margin, one should:

1. Own several stocks to manage risk.

2. Keep margin debt managable. So in a big correction, you dont have to sell.

3. Reduce margin debt into sustained rallies of substantial appreciation (correction expected, duh).

4. Increase margin debt when stocks are at bargain levels. When the most probable movement is to the upside.

I's easy. It's like "buy when there's blood in the streets". Go on margin when the blood letting is just ended and the new rally begins.

JMO

Stu B.
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