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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Brent Hogenson who wrote (42721)	4/20/1999 2:56:00 AM
From: Jacob Snyder	Respond to of 95453

re: "margin started to get below 50%", "buying more and more as we go up", and "If this rally is for real" : I predict that, if you use this strategy consistently, you will, sooner or later, have a margin call. If you're going to use margin, you have to have a value, not a momentum, strategy. And don't let % equity fall below 66%, unless you have other reserves to draw on. And spread yourself out among several sectors that track independantly. These oil service/driller stocks can go down just as quickly as they went up. Anything bought on margin, you have to be sure there is a floor underneath them. You don't know if this rally is "for real". I don't, noone on this thread does. We're all guessing. Calculate what your % equity will be if we revisit the prices of 4 months ago. No, I don't think that'll happen, and neither do you, obviously, but there is a chance it could. And if you dance that close to the edge, sooner or later you're going to fall off. If you must leverage, try longest-term LEAPs, in the biggest stocks in the sector. At least, that way, you can't have a margin call. I'm assuming you're doing this to try and make money. On the other hand, if you're a gambler who loves the thrill and tight sphincter tone, (and making money is of secondary importance), then your strategy is excellent.

To: Brent Hogenson who wrote (42721)	4/20/1999 11:10:00 AM
From: Mike from La.	Respond to of 95453

Brent, I'm doing the same thing as you, except I'm keeping my margin around 50%. I have a priority list of stocks, and targets that I'm willing to buy up to for each. I basically take a gain, and put about 1/3 of the gain back in on margin. That helps to keep the margin % at a safe range, and gives me some ammunition to buy on dips. As the stocks in each category reach their targets, I wait for my buy signals on the next category, then do the same thing there. My experience over the last upcycle is that it will take maybe up to a year before I'm fully invested, then I quit buying. I don't trade in what I think is an upward market because I may be out at the wrong time, and I would rather have my money invested, than paying it in taxes. Good luck. Mike