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  • trin2learn trin2learn May 5, 2012 3:56 PM Flag

    For those who are high fiving about the consolidation think about this....

    Yes, TC, I am quite familiar with BB3. He did as you said with HL, but didn't learn from his experience. He switched over to GPL, and did it again! He borrowed money from family and friends, then bought on margin! Needless to say, he lives a very stressful life.

    The worst thing that can happen to a newbie in the stock market is to make a profit on the first few trades! One gets the false impression that he/she understands how to trade, so why not increase the profits by trading on margin? A lesson to learn from BB3, though he has yet to learn it himself, never be too sure you're right. Having gotten in during the early stages of the latest bull market in PMs, no matter when BB3 purchased, the stock went up... or if it went down, he bought more, and soon the price went back up. Seems so simple that anyone can do it. But when the inevitable protracted decline happens, even within a bull market, and one keeps "buying the dips", eventually the margin limits are reached, then the margin calls start to come. All the paper profit evaporates, the margin debt grows, net assets shrink, and one is forced to sell into weakness.

    I retired the first time about 29 years ago because my stock market abilities trading on margin were so good that I could "make a good living" doing it; or so I thought. Several months later, I had to get a job! Some of that was just bad luck, but most of it was my own hubris. I am much more humble now, and doing much better too. GLTU, GLTA. Trin