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

To: Bruce Brown who wrote (23067)	4/19/2000 12:25:00 PM
From: mauser96	Respond to of 54805

credit can be used as an effective tool for leverage .. Many of us are using a type of margin without really realizing it. If we have the money available to buy a new car or a home, but instead choose to finance the purchase and use the available cash to buy stocks, we are basically doing the same thing as using margin directly. There are some big differences in that once you finance a house or a car, the lender can't change the loan requirements on you, nor can the loan be called because your asset value has temporarily shrunk. Therefore it's a lot safer than using stock as security. This is the only kind of "margin" that I use. I would also point out (as I have before) that having a little cash put aside is a good idea. Anything that will reduce fear of losing your life style will likely lead to better decisions in times of crises. In addition to reducing the need to make decisions at bad times, I'm a fan of reducing the total number of decisions (most of us have a limited number of great ideas a year) LTB&H accomplishes both of these goals.