vendredi 21 janvier 2022

A great day to start to use margin

 I recently talked to my friend who chosed the dark side of investing. 

Over the last year, he's been much more quiet about his performance. When I ask him about how things are going with his stocks, he's a man of few words. Like:

Me: How things are going these days?

Him: How do you think it's going (without a question mark). 

He told me that his portfolio was down 80%. But he didn't tell me what was his reference period. I know that it was down 80% between january and march 2021. Is it down another 80% since march 2021? I wouldn't be surprised. But I guess I'll have to drink a few beers with him to get that information. 


My portfolio is down almost 14% since the beginning of the year. It's a bit too much for my taste, but I'm excited about all these stocks at their lowest point. I'm looking at Disney, Netflix, Intuit, even Shopify... Of course, I don't really have to look at these stocks because my own are down quite a bit.

I'm excited because it's in days like these that I start to use margin. And if the market go down even more,  I may become an heavy user of margin. Just like I would buy a second house. 

Some people ask themselves if it's the right moment to buy a stock they like. We never know the exact answer, but when you own predictable and growing stocks and they're down 15-20% for no reason, what are you waiting for? 

4 commentaires:

  1. Seems a little early to be using margin. Shouldn't margin be reserved for crashes? If a drop in prices was less than 10-15% it would basically be nothing.

    1. The title of my post was "to start to use margin". I don't think that it's time for an heavy use for now.

  2. I can't use margin as all my investments are in my RRSP, but even if I could use it, I wouldn't...just not my style I guess. but to each his own when it comes to investing. It's wise never to knock the other guy and just stick to your own knitting.

    I'm down 4.69 % so far this year and after my performance in the market the last couple of years, I have to expect some sort of give-back.

    Sell-offs are never pleasant but they are part of the stock market life. And there is always the fear that they will turn into something more, like a vicious bear market...that is always out there. Its the nature of the market to over-shoot on both the upside as well as the downside.

    Bear markets keep me humble and serve to quell my hubris when I'm making too much money, so in a sense they not only take the froth out of the market, they take the wind out of my own ego and and bring me back down to a sense.

    One way to cope with them is know what you own, or at least be familiar with what you own. Knowing that I own a group of productive assets helps a lot.

    Funny, I was at a family dinner in August at my brother's house and the talk around the table was about making more money in the stock market. I remember thinking at the time...gee, this sounds like a top could be forming...I wonder...

    1. It depends on how much you use your margin. If your margin represents 2 or 5% of your portfolio, I don't see what's wrong. Of course, if your margin represents 50% of your portfolio, your either a casino player, either someone who's very sure about what he's doing.