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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (16256)	1/25/2000 1:53:00 AM
From: john99walsh	Read Replies (1) \| Respond to of 54805

chaz, Let me see how that works out by my way of thinking: D = 6000 G = 16000 (original 10k plus 6k borrowed) EO = (G-D)/G = (16000 - 6000)/16000 = .625 = 62.5% Now look at the 37.5% fall of stocks. Then the multiplier of G is (1-.375) = .625 so EO = (.625 * G - D)/(.625 * G) = (10000 - 6000)/10000 = .40 = 40% So you look at it in terms of debt as a fraction of net and you will not buy additional stock unless that debt is less than 60% of net. Now a word of caution to you. Do you really know what your margin limits are in terms of equity ownership? Some brokerage firms now treat different stocks as marginable by different amounts. So a silverback might have a broker call limit of 35%, but an aggressive Internet stock may have a limit of 90% or might not even be marginable! As a result, your overall portfolio may have a call limit higher than the 35% or 40% you might be expecting. John Walsh