TV Insights 999

The stock market has fallen so much, there should be quite a few accounts on the verge of being margin called, and some may have already been liquidated for a large portion.

Leverage is something few can resist the temptation of. One dollar can buy three dollars' worth of stuff, and when you win, it's three times the profit. Who wouldn't like that?

But humanity's fatal weakness is only focusing on immediate gratification, ignoring the reckoning afterward. When you make money, you dance with joy; when you get margin called, you wail and howl.

I've also experienced many days of being margin called. My account was once liquidated down to just a few hundred thousand in capital. I was very desperate at that time.

But I have one good point: I'm quite determined. Once I identify something as cheap, I can hold on to it tightly.

Tencent back then was probably around 180, and I stubbornly held on in the end, managing to turn things around a bit thanks to Tencent.

But many people actually lack this willpower; they are indecisive. When the stock price panics and crashes through their psychological defense line, they will surrender, hand over their blood-staked chips, and exit permanently.

I don't know how I came to have such conviction. It might also be the most basic understanding of this world: a piece of gold covered in dust is still gold.

With such a belief, I can hold it for years.

But unfortunately, many people use high leverage, lack faith, and lack a reserve force to top up their margin, ultimately leading to a dead end.

Some suggestions for friends who want to use leverage:
1. Have a sum of off-market funds available for emergencies, preparing for the worst-case scenario;
2. Only use leverage at low points;
3. Diversify your positions as much as possible, preferably across different markets and sectors. If you're concentrated in a single stock and an emergency arises, there's no room for mutual offset;
4. Try not to use leverage at all. Of course, it's estimated that few will listen to and achieve this.

Some suggestions for friends whose accounts are about to be margin called:
1. If the stocks you hold are at high levels, it is recommended to liquidate to reduce leverage; if the stocks you hold are at low levels, it is recommended to continue holding;
2. Sell the stocks in your portfolio that are at high levels (e.g., memory chips) to reduce the overall risk of the account, which is the mutual offset mentioned above;
3. Try to raise funds to top up the margin. The prerequisite here is that all your stocks are in an undervalued state;
4. You must not use leverage again in the future. Of course, it's estimated that few will listen to and achieve this.

Great waves wash away the sand; only those who survive are the true victors. $Super Micro Computer(SMCI.US) $Tesla(TSLA.US) $Micron Tech(MU.US)