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To: GROUND ZERO™ who wrote (9481)2/6/2006 12:46:52 PM
From: Kirk ©  Read Replies (1) | Respond to of 12411
 
Some pretty smart guys at LTCM thought the same way. They lost everything.

I think risk/reward premium includes the risks of a total wipeout on a margin call, especially from a gap that never gives you a chance to cover until your broker closes your account to cover...

Given I have a best friend who lost a fortune on a margin call despite my advice to get off margin on a rally....to avoid the risks.... maybe I am more sensitive to this.