Fat Cat Tim Buddy

tic toc.. tic toc.. Ring~~~

2012-10-15 18:50

tkteoh80

千万不可玩margin!

2015-02-21 13:23

Icon8888

Nothing wrong with margin

2015-02-21 13:38

Icon8888

It is not as bad as what people told u

2015-02-21 13:40

Icon8888

Use margin to buy good stocks with strong balance sheet, low PE, good earnings viability, high dividend yield

It is safe. No problem

2015-02-21 13:42

Icon8888

Keep the Gearing level low

When crisis comes, sell let's say 10% to 15% of the shares will be sufficient to bring gearing down to very comfortable level

It is actually quite easy to manage

2015-02-21 13:45

Icon8888

The article used 1997 as example

I acknowledge 1997 will kills lot of margin users

But 1997 don't happen very often

So no need to shy away from margin just because u want to avoid 1997

2015-02-21 13:48

kcchongnz

You don't need 1997 saga to kill. Internet bubble in 2001, US sublime crisis in 2008, and even using margin in December last year can also results in margin calls and heavy losses in forced selling. Think of the buying of many oil and gas companies then; Coastal Contracts, Bumi Armada, SapuraKencana, UMWOGC etc, weren't they considered good companies, sure win stocks?

Anyone having margin financing and heavy on these not-bad-stocks would incur margin call mid last December, resulting heavy losses.

2015-02-21 17:56

ganasai

frog inside the cooking water. kikiki, history will repeat. kikiki, human natural mistake.

2015-02-21 18:50

Icon8888

Don't meant to be confrontational. I said that margin is not really that risky exactly because I didn't get margin call in 2001, 2008 and even last December. In other words, my recommendation is based on my real life experience.

Not only I didn't get margin call, I am not even CLOSED to being margin call in all three occasions

2015-02-21 19:07

Icon8888

But 1997 is different. So my stance is that margin is safe 99% of the time. EXCEPT FOR 1997

2015-02-21 19:09

Icon8888

Well, let's try to reach a middle ground : adopt good investment practices (diversify portfolio, low PE, high dividend yield, good earnings visibility) will help to mitigate the risk of margin call. Use margin only if you feel that you can handle it.

And finally :

NO MATTER HOW WELL YOU THINK YOU CAN HADLE MARGIN, YOU CANT ESCAPE 1997 UNSCATHED

2015-02-21 19:15

ganasai

1997, because a lot of people never buy share before also go in and buy. they know what is stock or not? they know what is pe or not? sorry dont know. Just know that stock market is just a bank open the door to allow you grab money only. Kikiki, uncle/auntie/ah boy/ah ma all without the knowledge cause the crisis.

2015-02-21 19:20

Ny036

There are gainer n lore in stock market. Those who pick up during meltdown in 1997 or 2008 is the real winner if they kept their share for few year. Some gain up to 1000%. The secret is timing n ability to forsight n personal control..

2015-02-21 20:27

ks55

Under no circumstance one should use OPM to buy share. Invest with your excess/idling money. If you can achieve 26% consistently for 10 years, your portfolio will go up 10 folds; for 20 years, you will achieve 100 folds. Don't be greedy, try out with 100k, in 20 years time you will have 10m.

This is the power of compounding rate. Remember Warren Buffet's first rule : Don't lose. Make less is ok.

2015-02-22 11:34