I saw a very startling chart today. It was a chart of the latest nyse margin debt as you can see below.
Margin debt is again hovering around extreme levels, according to GaveKavel Research’s Charles Gave. He reminisced about an old boss who once told him, “Charles, you will never get rich in this business using other people’s money. Do NOT leverage your positions. The nyse margin debt chart puts those on the market leveraging into a more formal and accurate picture.
Leverage might be all right for fellows who deal in real estate, but for those in stock markets, it only brings misery.” Gave ignored at first, but then suffered a few margin calls. Now, he’s on board, and says that those prone to using borrowed money “seem to get most enthusiastic just before a recession, usually after a prolonged out performance of equities against bonds.” Hard to argue with him from the looks of this nyse margin debt chart below.
|nyse margin debt|
nyse margin debt
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