Forum Archive Index - March 2004

[Stephen Judd <stephen@vital.org.nz>]

On Tue, 2004-03-02 at 19:21, SJ.Greaves wrote:
> Most brokers have a list of what companies they will let you margin
> lend on. Most of the companies they will let you margin lend on are
> bigger/safer companies that are less likely to have any major gain in
> share price. So any gains you may make will more than likely be
> absorbed by the interest you pay for the money you lend. You end up
> taking the risk and the broker ends up taking the profit.

Depends. The interest and fees are tax deductible, and that can work
well for some people.

People have few qualms about gearing for property on much more
aggressive ratios, even though property is less liquid. How's a margin
call different from a mortgagee sale? I don't see why some modest
gearing into shares couldn't be justified, IF you were disciplined about
sticking to your limits.

I suspect being even more careful about spreading your risk helps with
margin trading.

>  If you are sure you have a good trading strategy get into some of the
> smaller volatile mining companies there should be more than one or two
> that will double in price again this year.

Go on... which ones?

;-)

Stephen

-- 
Stephen Judd
stephen@vital.org.nz
http://vital.org.nz


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