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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: T Bowl who wrote (1861)	12/19/1997 5:38:00 PM
From: Pierre-X	Read Replies (1) \| Respond to of 9256

Did he really say to leverage at $26? <g> PX

To: T Bowl who wrote (1861)	12/19/1997 5:59:00 PM
From: Mark Adams	Respond to of 9256

I've tried the diversify approach, and it has drawbacks too. First, overdone you end up making little even though your good stocks boom since you don't have enough concentration. And in bad markets, you can see big drops even though all of your holdings are only off 1/8 to 1/4, just due to the number of shares you own. I think looking out for too much concentration in any one sector is more important than diversifying out company specific risk. Especially when sector rotation is all the rage. One way to diversify would be buying calls/puts on the indexes, which I've begun to look at given I think the DDX is looking more like a steal, and even the SOX though I'd like to see it a bit lower yet. I think QNTM will see better days, but it might be a few months. Market sentiment has to shift again. On a day like today, it's refreshing (IMO) to see a beaten down sector take the turmoil in stride. Despite a 270 drop in the DOW, the tech stocks held up well. This is a sign to me of bottoming.

To: T Bowl who wrote (1861)	12/19/1997 7:57:00 PM
From: LK2	Read Replies (1) \| Respond to of 9256

OFF TOPIC--DIVERSIFY/LEVERAGE. Todd, there are no silver bullets/magic formulas/whatever. Over time, you learn common sense. Hopefully. Diversify is a great idea. So is leverage. Also, be aware of what the risks are. These are trite. But true. Lawrence Kam, who is very sharp, says you misunderstood him. He knows certain kinds of leverage can be dangerous. And if you are getting telegrams, I guess you know this from personal experience. What you do is up to you. But if you are using margin, maybe you should reduce your margin balance, even if it means taking some losses. I really have little to almost no idea what your positions are, but if you are fully margined, and the balance is significant, you could lose a lot of money if things go wrong. I was really stupid, and I knew better, but I was margined to the hilt, and I kept buying more QNTM and WDC as they were going up. I also had some APM. So I was overleveraged, and overconcentrated. And when the disk drive sector got slammed, I lost a bundle. And if I hadn't sold out in October, it would have been even worse. Much worse. But it was hindsight that shows the tech sector kept dropping after October. What I'm trying to say is, don't risk more than you can afford to lose. You can make money in the stock market. Over time. But if you try to make it too fast, you can also go broke. And if you really are getting margin calls, you should seriously think about reducing your risk. Even if it means taking some losses, or reducing the amount of money you will make if the stocks you own suddenly go back up. P.S. I'm better at giving advice than following it.