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To: Dr. Id who wrote (32867)	10/6/2000 12:16:35 AM
From: kumar	Respond to of 54805

re Margin : the characteristic of the market in '99 was very different to the bulk of this year. I agree with your point of "prudent margin use" (we each define limits on that). my comment was in the context of heavy margin use in the same sector/industry/company - that will eventually hurt. cheers, kumar@Ididntknowureadthisthread.org:-)

To: Dr. Id who wrote (32867)	10/6/2000 2:17:07 AM
From: Seeker of Truth	Read Replies (2) \| Respond to of 54805

That's an anecdote about the usefulness of a moderate amount of margin. We also have anecdotes about remission of cancer following (but not because of) ingestion of substance X, etc. We surely can find plenty of anecdotes about a moderate amount of margin inducing a moderate amount of unjustified risk taking and an ultimate moderate loss. The truth is, we think hardest about an investment when we have to use real cash, e.g raised by selling something else. It's painful to sell something because either we are admitting a loss on the something else or taxes await on the profit. When you don't have to trouble about raising the money because friend broker will lend it to you, there is a general trend of overexuberance. I'm all the time for selling something rather than borrowing. You may be getting that "sure thing" at the same time as you are avoiding a loss in the one stock you own with the weakest future, because of its nongorilla characteristics. That's a double win. If it's really a sure thing it has to be more profitable than something else you own which isn't so sure. Also, BTW, at the moment brokerage rates of interest slightly exceed the long term average performance of stocks.