Value Investing 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.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Arthur Radley who wrote (35107)	8/14/2009 2:10:14 PM
From: MCsweet	2 Recommendations Read Replies (1) of 78741

IMO, margin is speculative unless what you are buying on margin has very low volatility (such as a very high grade bond where you earn a spread on the margin) and/or has a guaranteed payout coming soon, or if you have very accurate hedges on. I think Graham might be ok with the use of margin in these types of instances. I think these activities are what he refers to in term professional. I don't think he is referring to sophisticated investors who are already fully invested in stocks, buying more of them on margin. In fact, he advocated not being entirely invested in stocks. Load and loads of "professional" investors have gotten blow up using margin. I don't trust myself to use it to any significant degree (unless again I have a hedged or low volatility opportunity), but then again I don't have much confidence that I can time the market. Also, smallcaps typically have plenty of juice such that I don't feed any compelling to crank up the portfolio's volatility with margin. MC

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next