Buying stocks on credit

Lately I have seen a disturbing trend among some financial bloggers in Sweden, they take credit on their stocks to buy more stocks. To me this is a very clear no go and especially at moments when many stock markets are on all time highs.

Yes, even when the stock markets are on all time highs there will always be companies that are cheap but when the stock market drops by 30% then all the companies drop by 30%. That means that the stocks that you used to take the credit on will drop by 30% and so does the company that you bought with that credit.

The stock market is dangerous in the short run and wonderful in the long run. A credit is often the opposite... wonderful in the short run but devastating in the long run.

Back in 2009 in the middle of the crisis then I understand if people took a credit to buy stocks but I doubt that many people did that. I also doubt many banks would have offered credit on stocks so the only thing to use for the credit leverage would have been land, houses or apartments.
To risk your house for buying stocks in the middle of a crisis then you need an unusual way of thinking which, in my book, falls under the contrarian way of thinking.

Personally I am also sitting with debt on my shoulders which one can, and to a certain extent also should, say that I use as leverage for buying stocks for as long as I have those debts. I would love to pay them all off but due to the conditions of them as well as the reason for how they were created it makes little sense to pay them off directly and for that reason I will keep them as leverage for the time being.

I would never recommend anyone to take credits for buying stocks but if one must do so then please do it when the stock markets have crashed and not when it they are on an all time high as they are now!

As a small side note... Until I get a better feeling for the time needed for my economy studies I have decided to bring down the publication rate to one new publication every two days.

School starts today

Today at 10h00 my economy lectures will start and I guess I must be online then to see what is going on. I still do not know how large the impact will be time wise for me but I will still try to keep up some kind of publications on the blog... the last time I reported concerning this matter you can read here in back to the school bench again.

At the very minimum I will publish the stocks I buy (& sell which I still have not done yet) and the monthly summary. Everything else will be based on available time.

I was chocked to discover how much the University study books costs! One book that they wanted me to buy costed around 220 €! Crazy! I looked around a little and managed to find some older versions and additionally they were used books so I got away with paying 82 € for all the four books that I needed. Lucky me!

I really find it an outrage that the professors arrive with a lecture plan using books that costs so much money. Back in the days 220 € was the equivalent of one months rent for my little 26 m2 apartment that I lived in and to my knowledge the students in Sweden have around 850 € per month to life on today (around 250€ is given and 600 € as a student loan). To then pay 400-500 € for some silly books is simply not ok.

Either way I hope that I will be able to use my classical approach of attending all lectures and making good lecture notes. I always bought the books but I never opened then when it came to study for the exams. I always read my notes a couple of times and that was enough to pass the exams with a minimum amount of effort and time consumed. Sure on also did not get the top grades but that has never been a target for me. To learn was always my interest and to learn by heart only to pass an excellent exam I could not care less about.

In Germany pupils usually get a school tüte. This school paper bag is made into a cone and contains all the material that the pupil needs for school plus a lot of sweets as motivation for the child. I guess no one will give me a tüte... :(

Your ten biggest investments today?

Writing a blog is very much like a diary with the possibility of some outside interaction in the form of comments. The comments from readers as either agreement or disagreement are what makes a blog come alive and the best of all are discussions between readers.

Just like a commentator wrote yesterday in the Stock Portfolio page that "ETFs are essentially boring as hell...". The very same goes for writing a diary and therefore I hope to receive some feedback and discussions.

What I would find interesting to find out would for instance be: How many stepped heavily into the oil and gas industry? Did anyone jump into Russia? Taken a closer look at the companies in Greece lately, at least they have survived a couple of years now? Who bought companies in India during the autumn?

To visualise all that I guess the easiest way is to ask one very simple question:

Which are your ten currently biggest investments?

Shuffle of companies in Google docs

As I have mentioned before there are companies that I have excluded from the Stocks of Interest list due to me simply feeling uncomfortable of adding them there. I have now decided to change this and I have moved all the companies from the big list that are either in green colour or yellow to the stocks of interest list.

This then also means that several of the companies will have older analytical data and those that were analysed back in 2013 will be once again looked at to see if they have a right to remain on the Stocks of Interest list or if they will be kicked back to the big list.

So for the next one to one and a half month I expect the Stocks of Interest list to be slightly crowded and if it, after all the fresh new analysis, will still be crowded then I will change the boarders for being on the list.