THIS IS REALLY RIDICULOUS!
Investors. THINK. How can your stocks forced sold by your lenders be good?
It does not matter if the stock is undervalued or a wake up call. An investor has much less control during margin calls and stocks can be bearish for a long long time - like many months. When that happens, your holdings can be totally wiped out. Stocks in the short term can be really volatile especially in today's age where computer algorithm trading creates huge volatility in the market.
This is not about borrowings for trading (as I am not totally against it), but be sure you have strong enough collateral to sustain. This advice or statement so irresponsible is really bad for man on the street who is discovering investments step by step.
Icon8888
Desa u need to shed the positive bias for uncle Koon. Be a bit objective.
hedge fund high gearing is for futures, currency , etc . Not stocks.
No banks will give out common stock margin loan of more than 1 to 1
Am I not right ?
Posted by Desa20201956 > Feb 22, 2016 09:02 PM | Report Abuse
Icon....whether margin too high too low is all about risk tolerance, about strategy and details of the portfolio.
Hedge funds routinely take up gearing of 100 to 1 even when they have confidence in their modeling.
2016-02-22 21:13