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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (55478)	10/1/2001 4:44:31 PM
From: Oeconomicus	Respond to of 94695

Wrong. Unless one borrows against the house beyond what is prudent given the risk/return characteristics of the real estate, and then invests the loan proceeds in the stock market, one is NOT "in effect on margin". Or are your broadening the definition of margin to include financial leverage of any asset, rather than just securities? Your explanation of the riskiness of large mortgage debts supported by possibly inflated real estate prices may make a valid point, but only about the risks of real estate, not those of the stock market. Bob PS: I'm in the process of refinancing at 6%, but I have no desire to use these low rates to buy one of the new $800k+ houses being built near me, regardless of how nice they are. Perhaps when their overleveraged initial buyers goes bust, I'll pick one up for a half million, but only if I want to part with half the price in cash. For now, I'll keep my money in select stocks. :-)