Forum Archive Index - February 2000

["Osbert Sun" <osbert.sun@xtra.co.nz>]

Roy,

I'm happily agreeable with your comments that with the current volatility in the equity markets, having a high level of debt to finance share investment is highly dangerous (so is at any other time). I myself have resisted the temptation of using the margin lending facility offered to me some time ago by one of my brokers for a promised leverage. However, I serious doubt that many investors/traders would finance the share purchase on a high ratio of borrowed funds, especially under the current non-performing equity market in NZ. I could be wrong as I don't have any statistics to back my claim. I do believe though that majority people on this forum are responsible investors/traders who practice diversified-portfolio investment approach. Maybe we have spent too much time talking about the likes of SVY, AQL, SPE etc., but it is the uncertainty about the futures of those companies that makes a challenging and fun topic. I have enjoyed a great deal of various comments contributed to this forum, including those of yours. While we all need to cautious in the equity market and to safeguard our investment for the future, we could perhaps also have a little bit of fun by living on the edge in the tiny corner of our investment portfolio.

 

Regards,

Osbert Sun

 

----- Original Message -----

From: Roy

To: sharechat@sharechat.co.nz

Sent: Tuesday, February 22, 2000 12:22 PM

Subject: Re: Re: Re: [sharechat] 1986-1987

The point being that interest rates going UP comparatively.
With major chunks of debt financing speculative share investment and share prices declining you don't have to be a mathematical genius to work out that some significant margin calls are overdue.

Getting back to your point about having it under control.
The cost of money is getting higher and higher day by day.
ie 1986/7 numbers 25% interest -18% inflation = 7%
2000 numbers = 7%......