Larry,
Admittedly, playing the margin game is risky, but my strategy is to try to buy at or near the bottom. In ANCR's case, any buys below $5 were not marginable, so I had to pay cash for them. (By the way, these shares were clearly purchased against the investment advice of Ed Schultz's cat. <g>) In essence, I was treating my margin account as a cash account.
As the price moved up over $5, my margin buying power increased dramatically. The key for me was simply not to spend it. That way, no matter what happens, I am safe down to the old levels. If I am SURE that ANCR is truly on the way up, and that the downside is limited, I will spend down my margin account somewhat to increase my position. I will then use those shares to trade with, while protecting my base position of cheap shares. Others might differ in their approach, but that is mine.
The big variable to me is the upcoming earnings report. Even though we here on SI are braced for a $1 Million quarter, it is not clear to me that the average investor is. On the other hand, I think that if Q1 looks normal, and anything positive is said about the storage side during the conference call, we could be off to the races. I'm just cautious enough to want to hear it first.
Kerry's suggestion not to buy ANCR on margin is still the best advice. I have some ANCR in my IRA that I bought last year at 10+, and I just don't worry about it, since it is all bought and paid for. When you are on margin, you have to worry about the short term price fluctuations.
Craig |
