Silicon Investor (SI) -- The First Internet Community

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 : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (14542)	1/8/2000 8:00:00 AM
From: unclewest	Respond to of 54805

using margin adds an incremental degree of risk without adding an equally incremental degree of reward. Your turn. :) OTFL Mike, I am certainly not advocating the use of margin. For the record, I never use it. I was simply attempting to point out that there is more than one way to view the $ in a business. Many traders do use margin to maximize profits and/or losses. I have no interest in using margin to increase my risk. I got hung up in a honeydo...now I am going fishing! unclewest

To: Mike Buckley who wrote (14542)	1/8/2000 10:04:00 AM
From: straight life	Read Replies (1) \| Respond to of 54805

"The important reason I don't buy into the analogy is because a business creates wealth by offering added value to its customers. SL's business has no customers who are willing to pay for the value his business adds. Lacking that fundamental, using margin adds an incremental degree of risk without adding an equally incremental degree of reward." huh? Mr. Market seems pretty eager day after day to buy my inventory, this week notwithstanding. The value I add is my research. The whole point of the stock market is to make a market in stocks, especially liquid stocks, which is what I own. for ex: I bought 2000 shares of CREE (a company my research has revealed has rising margins and growing revenues and profits: earnings per share last quarter on a yoy basis were up 163.6% ) for approx $86,000; all of it borrowed. I paid about $41. a share, back in Oct. Next Oct. I plan to sell enough to pay off the loan, paying only long term capital gains on the (hoped for)profits minus the interest paid on the loan. The rest of the position I'll own for free thank you very much. I use margin as a tool to unlock value in my securities; it's only another tool in my toolkit, like my few skills as a researcher or my 20 years experience in the market. All I can say is it's worked for me. (My margin debt is at 15% and as my securities rise my buying power does too.) (worse case scenario: the market tanks, and I'm forced to sell some Q {which cost me $4.75-$12 a share, all of it long term cap.}) NOW can we say no-brainer?