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To: JohnG who wrote (106831)	10/11/2001 3:43:11 PM
From: Jacob Snyder	Respond to of 152472

OT re margin calls: My experience, when dealing with brokers, is that you'll get 5 different answers, if you ask a question of 5 different people. And the first person who answers the phone always gives an answer that turns out to be wrong (he's the stupidest person in the firm, that's why he answers the phone). And yet another answer when you ask for it in writing. As I understand it, rules for % requirements due to an un-diversified portfolio, are made by the broker. And can change at any time. But I could be wrong, I've never looked into that specific question, as it has never been pertinent to me. My experience is that the rules are flexible before the fact, but not after. That is, once a margin call (or any other unfortunate event) has happened, the broker will rigidly defend their decision, however they did it. The only way you are going to get it reversed, is if your broker's or Exchange rules obviously weren't followed (and you have a copy of those rules from before the event). Remember, if it isn't documented, it didn't happen. I have some very simple rules about brokers: 1. don't trust them, the relationship is inherently adversarial. 2. if I have a problem, ask once to have it fixed. If it isn't, switch brokers.

To: JohnG who wrote (106831)	10/11/2001 3:44:11 PM
From: Jordan Levitt	Respond to of 152472

One thing that I have seen over the years is just how "maniacal" margin can be. It is the elusive magic of leverage that draws you in (at or near the top often), and just as powerfully to get you out at the bottom. It is these quick violent spikes (down then up) that highlights these dangers. FWIW, I think the only way to employ leverage (if you must) is to use a line of credit, that you can honestly afford the payments on, that is NOT guaranteed by the investment account. That way, the market doesn't make your trading decisions for you. Margin plays on your psychology and forces your hand...