Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: freeus who wrote (129584)	5/28/1999 11:28:00 AM
From: David Harker	Read Replies (1) \| Respond to of 176387

>Sometimes good advice is not good advice across the board or for >all situations....e.g. edamo and selling puts: selling puts is >great but it is not "found money" as I thought: it also gives >you margin calls when the underlying stock goes against you. I've never sold puts so can't claim to be expert, but edamo has made it very clear he never uses margin, that may be why that strategy works well for him.

To: freeus who wrote (129584)	5/28/1999 11:39:00 AM
From: BGR	Read Replies (8) \| Respond to of 176387

freeus, It may sound like a mantra coming from me after every earnings, but here goes: 1. Margin is dangerous. You are essentially giving up your long term rights to hang onto the equity that you have promised as collateral. In effect, you are more likely to sell when you are forced to, than when you want to. 2. Nobody can time the market. Nobody. Repeat for the third time, nobody. So, lightening up on margin in good times is a myth over the long run. If one can do that, they can successfully time the market. And, I repeat for the 4th time, nobody can. 3. Put sells backed by cash, and that is the most crucial point, backed by cash are almost similar (in fact slightly better) than going long the equity outright. But put sells not backed by cash are suicidal and are no different than an outright margined long position (I can mathematically prove this for you, if you want) which as you already know is not found money. 4. Buying and holding a diversified portfolio (of growth companies if you are so inclined, as long as they are in different industry sectors) long term w/o use of leverage continues to be the best strategy IMHO. -BGR.

To: freeus who wrote (129584)	5/28/1999 11:44:00 AM
From: D. Swiss	Read Replies (2) \| Respond to of 176387

Lynn, the only thing I will agree with you on is NEVER LEVERAGE YOURSELF TO DANGEROUS LEVELS. Margin governs your actions and that is not a smart way to do business. You are often placed in a position of selling at the worst possible time. I do not mean to sound preachy, but in general I would not margin more than 30% of total equity. Of course you shouldn't be buying when you are leveraged at dangerous levels, especially going into earnings warning season (June). However, do not confuse sound investing strategy like buying on down turns with margin buying, they are two different animals. I am not heavily margined, so I am prepared to buy like hot cakes at a fat man convention during significant down turns. :o) Drew