Hi LemonHead. Betting on he dive is really dangerous.
You are right 100% on this. I think you might have misread my intentions, or more diplomatically expressed: I have not expressed my intentions clearly!
I was referring to the discussion on selling shares that cost 100 at a loss at 50 to buy more shares at 25! If that is a strategy then one has to bet that the market will fall to 25 or else that strategy is doomed to fail. I pointed out that this strategy is a silly one, as there are many ways that could make it fail.
Instead, if one follows the AIM strategy and the market is already down 50% then going on margin is a very, very sensible thing to do. Many discussions on this Board focus on stretching the cash to take advantage of buying a large amount of shares after a deep dive. TurboVest is a way to stretch the assets you have. Borrowing money to do the things you want is a way of life. TurboVest is a natural partner of AIM simply because assets are money one has! If one has no assets then borrowing too much money(as bank will happily allow you to do) is silly as wel!!!!
Some people borrow money to buy an expensive boat and then throw in loads of money afterwards. This happens with big boats as well as with small boats. They get no money back for it! Other people go on expensive holidays and bear the burden of clogged highways, clogged airports and torrential rain storms in foreign countries, or earth quakes and volcanic eruptions that they want to watch with their nose righ at the lavastream. None of these expenses results in getting any money back for it, yet people do it en mass. So, what is so strange about borrowing money to buy low priced shares in a sensible strategy? Warren Buffet is a sensible man. He knows how to invest and to reduce his risk. That's why he does well! He is the living example that the Risk Pyramid is a fallacy! You earn big money by reducing risks. The AIM strategy is focussed on reducing risk. Turbovest is simply a way to increase profits at low risk. TurboVest is not a primary strategy for surviving a crash. It is a primay strategy for normal volatile market behaviour!
As to a rising market after a down period: You asked when it rises after a crash! The market recovers after every crash. You can bet on it! Not everybody will survive every crash but the survivors will make the market rebound. You can bet on it. In the current crash there have already been several rebounds. Turbovest AIMIng thrives on that!
Conrad
AI
