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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (11907)	2/13/2000 12:18:00 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 15132

Margin Debt From the staff at Werkenstiff Capital Mismanagement: I recall that Brinker said it was human nature to buy stocks when they are expensive and the margin numbers seem to support his thinking. Margin debt grew 20.11% from January 1992 to January 1993. It grew 39.14% from January 1993 to January 1994. And it grew 5.11% from January 1994 to January 1995. From January 1995 to January 1996, it rose 14.21%. From January 1996 to January 1997, it grew 35.26%. And from January 1997 to January 1998 it grew 28.48%. From January 1998 to January 1999 it rose 19.92%. Note that as stocks became more expensive on a valuation basis from 1997 on, the percentage growth of margin debt declined. But from January 1999 to January 2000 margin debt grew 58.9% with close to three quarters of that rise (71.14%) coming since September. On a percentage basis, it looks like November and December registered the highest sequential growth of any two months at least since 1992 rising 13.17% from October to November and 10.79% from November to December. I love it. A good number of folks have margined themselves to the hilt as the market has reached record valuations. Gee, any guesses where that money went? Seems like a long squeeze is being set up here.