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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Lee who wrote (91753)	1/27/1999 12:10:00 PM
From: musea	Read Replies (1) \| Respond to of 176387

Lee, You asked, But for stocks, it's different. Using the broker's money with interest of course. Have you used stock margin and what is your experience? I'm not Sig, but I thought I would pipe in with some thoughts on margin. Like any kind of leverage, sometimes you get to swing the lever and sometimes the lever swings you. My own experience with margin turned out positive after a while, but for a period of months when my purchase was under water I had a tough time of it. Fortunately I was not heavily margined - I never got up even to 10% of my portfolio. A friend of mine was fairly heavily margined at the time of the Mexican market crash a few years ago and lost a lot of other stocks as well as the Mexican telco one. I think margin can work for you with a good strong growth stock like Dell, as long as you keep the margin level down. Dell stock does hit a periodic swoon and you don't want to lose your shirt during that time. Nowadays I prefer to steer clear of margin debt, and I only use it if I'm making a purchase in one account but have cash in another to pay it off within days. It's useful to me when used in that way. That's just one opinion, of course. Others will have different ideas. -musea

To: Lee who wrote (91753)	1/27/1999 12:36:00 PM
From: Daiju Kohno	Read Replies (1) \| Respond to of 176387

Lee, As musea replied, there will be others who disagree, and I am one of them! I was fully margined last February and after my windfall, I decided not to be b/c I didn't want to lose my gains. It wasn't until after DELL knocked some sense into me that I went on margin again (after the last earnings report). I became fully margined on DELL even though it was meant to be a short-term play. (After all, I'm being charged about 1/2% per month). But as DELL kept going, I realized that DELL (and many of my other stocks) can easily beat 7%/year. That's when I decided to hold on to DELL on margin even though it had reached my target price. And boy, was it a good decision! If you run your own business, loans (for most people) are a fact of life. You borrow money and hope to make enough to pay it back + interest + profit. If you own stocks, you really do own your own business, and its your job to make it as profitable as possible. Margin is a great way of doing this. I am up over 20% this year, alot of it is due to margin! The risks involved (margin calls) are minimal if you invest wisely. I purchased about 30k of MSFT last year on margin (my first time being so heavily in debt-about 2.5M). My interest payments amounted to roughly 15k/month so I sold after 1 month to save my profits. Had I held on to MSFT on margin, I would have an extra 2.5M (minus 175,000 in interest). Great companies like MSFT/DELL will almost never fall 30% (the standard loss before you're subjected to a margin call). JMHO, DK

To: Lee who wrote (91753)	1/27/1999 2:08:00 PM
From: Sig	Read Replies (2) \| Respond to of 176387

Lee: <<< But for stocks, it's different. Using the broker's money with interest of course. Have you used stock margin and what is your experience? >>> You deserve a very good answer to that question, perhaps Mr. Michaels can say a few words.(G) I started to use margin about a year ago. Veeerry carefully, as I seldom plunge right into something even if others guarantee success. Now, in hindsight, I would encourage any investor to learn about using it as soon as possible. Being very careful with stocks other than ones we understand. For example: I left 40 shares of Dell, which had cost me $1780, and some money,with a full service broker about 4 years ago. Well with the splits etc, that grew to be 20 or 30K, and I started buying a few calls. And the account got to around $80k So now I am "up" by say 78+k of "their" money and feel free to risk a bit of margin. That would be 50% of the value of the Dell stock or maybe 12k. That's not much, but it permitted me to buy 20 more calls or perhaps 3 more leaps than usual by using only 1/2 the available margin. Today that account stands at $240k with still only 640 Dell behind it, the margin available being $28K I tend to be about $5k into margin on that account: Two days ago I wanted to buy 3 Leaps on Dell at $28, which would be on margin at $8400. OK, so I don't use much margin in that account but it causes me no worries as I can sell something and eliminate all margin in the blink of an eye. Mainly it permits me to buy up to around $28k of calls when I think the price is right (usually only buy a few tho) If I have any talent, it is to buy stocks at a low point. And to 'nickel and dime' these market fellas by buying one or 3 calls at a time. Whatever works, you know. I'll take the .24mm. ( I don't have time to discuss my feeling toward margins on other accounts so will do that later) Regards HOLY &*^^, Dell is up 2 1/2 ............ Sig.