저자: KevinPaffrath · 외국인
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출연자는 마진(신용거래)으로 테슬라 등 주식을 대량 매수했다가 2020년 9월 증시 하락과 마진콜 공포로 심리적 고통을 겪음. 9월 21일 포트폴리오의 15%(약 120만 달러)를 매도해 마진을 전액 상환했고, 이후 마진 사용 비율을 10% 이하로 낮추고 부동산 투자로 전환할 것을 권고. 마진은 레버리지가 양방향으로 작용해 위험하며, 부동산 담보대출은 상대적으로 안전하다는 주장.
다듬은 글
happened to me when i used margin to buy tesla stock and the result was surprisingly bad now uh in order to share this story i'm gonna have to make sure that you've already signed up for your life insurance so s long as with that out of the way let's get into what the heck happened and what i wanna share with you about margin the first thing i'm going to do is i'm going to explain what margin is so if you want to skip the explanation on margin i'm going to put a time on screen right now and then just skip to that time so that way we could start talking about what actually happened to me but for if you if you don't happen to fully understand margin this is going to be a good explanation for you great let's get started first what is margin margin is debt so think about it this way and i'm going to make an example here that doesn't actually actually exist in reality but i'm making this example just assume it exists ignore the technicals of this example let's say you have a car worth a thousand dollars you use it to drive to work back and forth every day now you go to a bank and you say hey i'd really like a credit card and they say well you know we don't really have a good credit history with you how about we use your car as collateral and we will give you a secured credit card so that way if you don't pay off your credit card we'll just take your car so now they give you a credit card what do you have now well you've got a car that's worth a thousand dollars you've also got a credit card that has the potential of spending a thousand dollars let's say you take that thousand dollars and go buy gift cards a thousand dollars worth of gift cards okay now you have two thousand dollars in assets you have a thousand dollars in gift cards and a thousand dollar car you basically just doubled the amount of assets you have now the interesting thing is if with with secured credit cards if you don't pay your card on time because you have a secured credit card the bank could immediately take some of your assets in this example your car and then use that money to immediately pay off your credit card now i'm oversimplifying because again banks don't give you secured cards against your car but the point here is to say the bank has this hammer that floats over your head basically the bank says you better pay us otherwise you're losing your ride and that hammer can drop and they can instantly show up with a tow truck and take your car to pay off your car if certain things happen well that secured credit card did let you double your access to assets which is kind of cool so you know maybe you were thinking well if i get all these gift cards i could do a business and i could start a business or i could make some more money right that's why we take on debt is because we need some more money or we want some more money to go invest more right margin is very very similar except rather than a bank or you know a secured credit card and a thousand dollar car let's pretend now you have a thousand dollars in tesla stock that's your car now instead of a credit card you have something called a margin account think of it like a margin credit card and instead of buying gift cards you just go yolo and buy another thousand dollars worth of tesla stock great well now you have your original thousand dollars worth of tesla stock plus you just borrowed another thousand dollars uh to buy tesla stock now you have two thousand dollars of tesla stock one thousand that you own one thousand on margin you have a loan worth of thousand dollars so you really still have equity of a thousand dollars but the benefit here is if the market goes up ten percent you gain two hundred dollars right because you have two thousand dollars ten percent of two thousand that's ten percent return that's that's a hundred that's two hundred dollars that's awesome that beats a ten percent return on the thousand dollars of your own money which would only be a hundred dollars so people use margin to extend their gains however leverage works both ways if prices go down ten percent you lose two hundred dollars instead of losing a hundred dollars and that's where problems come in so i made this simple tool and this simple tool i'm gonna go ahead and give this a quick explanation here and then we'll actually get into what happened to me so here's a simple little tool that i made uh i made this example here we'll call it the robinhood example all right let's say i've got a thousand dollars worth of tesla stock robin hood lets me borrow a hundred percent so a hundred percent of what i have is they let me borrow another thousand dollars great so now if i buy tesla stock with that extra thousand dollars i have invested a total of two thousand dollars great what could possibly go wrong now in the fine print robin hood's going to tell you that you need to maintain at least 25 percent equity which works out to about 500 dollars in equity well what is your equity position on day one well on day one let's see you have two thousand dollars invested but you have a thousand dollars worth of debt so on day one you have a thousand dollars in equity all right sounds good but now what if the stock market falls 40 whoops there we go 40 well now all of a sudden a forty percent decline in tesla stock means your two thousand dollars in stocks just became worth twelve hundred dollars uh-oh wait a minute you have a minimum equity requirement see you have this thousand dollar loan so two thousand dollars in stock value minus a thousand dollars uh-oh that only leaves us with two hundred dollars of equity which means robin hood goes uh-oh your account is negative equity or you have negative margin equity a negative margin balance you are negative 300 and now robin hood could call you up literally call you up if they wanted to but they'll probably email you or send you a notification and say hey yo you owe us at least three hundred dollars you can now go sell three hundred dollars worth of tesla stock while it's just lost forty percent or go get some cash out of your bank and get it over here we'll give you maybe two to three business days to come up with the money if we feel generous and if we don't we'll just sell the stock automatically for you it's kind of like your car getting repossessed automatically you have zero control you just literally signed your rights away do your stocks and they will sell them at the bottom of the market to cover the 300 you owe them they will not lose money giving you margin this is very dangerous and i this is a calculator so i will give this to you i made this for m1 finance as well because they have different equity requirements and uh they also only let you borrow up to 35 you can play with that yourself though again i'll link that down below so all right here we go now we have an understanding of how margin works and it kind of sucks in fact why don't we go ahead and pull up what a robinhood email looks like just take a look at this robinhood email here on screen and you could pause and you could see oh yeah that's not the kind of email that you want to get so anyway i'll link that down below all right what happened to me well here's what i did starting on march 6th i decided to refinance four properties immediately to raise as much cash as i could and i like real estate debt because the tenants are paying for it it's 30-year fixed rate lending and the banks can't sell your real estate if prices go down this makes real estate very different from margin when prices go down as long as the tenants keep paying i pay my loan they don't sell my properties even if prices go down if tenants stop paying in america you take mortgage forbearance it's a crazy world but anyway i drew down my credit lines and i refinanced four properties these are all real estate loans and i put them all into accounts at robinhood and m1 finance during march when things got really bad towards the end of march i decided to refinance another four properties so that i had as much money as possible flowing into the stock market and so i bought tesla like crazy i bought apple i bought red fan i bought amazon i went nuts buying stocks i thought to myself there's no way we're going to see prices this low again unfortunately come april and may i started well i had balances now and i had stocks now so i thought ah what could go wrong let's just start buying on margin basically you get so used to seeing prices go down that you keep convincing yourself especially during like march and april when it was just like red day after red day you keep convincing yourself at least i did at the time that hey things are on sale again all right it was painful don't get me wrong i made videos of me throwing money into the fireplace and people are like kevin that's illegal i'm like oh crap i didn't know that was illegal but it literally felt like i was throwing money in in the fire and it felt bad but on the other hand i kept looking and i'm like the sales i just got to keep buying so it's like you just start now all of a sudden you've gone through all your cash and all of a sudden you're using margin to buy and buy and buy and it's really sticky you almost forget that you're borrowing money because it's so easy to just swipe up on robinhood and boom you've just executed another purchase and you feel good because you're investing except it's not really obvious sometimes on robinhood that you're actually you're buying power is actually margin if you have a margin account enabled you could set limits to it but we all know we can undo that limit within like 20 seconds so before i knew it i had pulled out three hundred thousand dollars of margin on weeble five hundred thousand dollars of margin on robin hood and wait for it 2.9 million dollars of margin on m1 finance which worked great while the market was zooming insane returns i mean amplified returns right well in july the tech stocks in my opinion started hitting pretty high valuations i sold out of the recovery sector in may and then finally again in august and i stuck only to tech except in july these valuations were starting to get a little stretchy i had a price target of 3 400 for amazon in 2022 well here we are in 2020 and in august we hit like 3 500 for amazon i'm like this is ridiculous like i no so in late july and early august i decided i couldn't justify buying stocks heavily anymore and instead i would transition to buying real estate i told this to all my course members because every day no matter which course you join i hold daily live streams when the market is open and i told all my course members that i'm going to start paying off margin and you can look all the live streams are archived if you're in the course fortunately i was paying off debt like crazy and so come september i had paid off my robin hood and my weeble margin but i had not paid off my m1 finance margin now generally i recommend do not take margin of more than 20 to 30 percent honestly probably don't take it at all unless you could pay it off or you have some income stream that you know you're going to be able to pay this money off with quickly well in september the market came tumbling down unfortunately my robin hood and my weeble was paid off but my m1 finance was not i was also not and still am not very heavily diversified my view of stocks is that i pick my favorite stocks my favorite winners which you can see at metkevin.com top or my favorites at mattkevin.com1337v11 you can see it there as well this is my favorite stocks and so i like to concentrate in my big winners and then i diversify with real estate the problem is when you're using margin your margin lenders don't care if you've diversified with real estate when tesla falls 40 percent it falls 40 percent and all of a sudden it's like oh margin yes so here's what i didn't expect to happen there are four things that happen to me and i want you to know about this because if you're using margin i guarantee you you've felt some of these things and it's normal but it's bad if you're not using margin you've got to be careful of these things because it's gonna happen here's the thing the first thing that happened to me the fear of a margin call prevented me from shopping more heavily in september when prices were falling that's really frustrating to me because it's exactly the opposite of what i did in march and april in march and april i didn't have margin i had cash in the bank and i had cash from real estate and i was comfortable with that cash that i had and so even though the market was falling i'm like discount again buy buy buy buy which was the best time to do it well here we are again prices are falling but i'm not buying because of this margin and i'm hesitant to buy heavily where usually i like to see red in the stock market but i'm hesitant because i'm like well crap if i keep spending the cash i have then i don't have cash to pay off margin and then what if i get a margin call because who knows how far the market's going to fall nobody knows but if we get a second wave and we get a flu covered pandemic i i don't know anything could happen nobody was expecting covet 19 to do what it did right so these things can happen margin is just the the idea of having margin and the idea of getting a margin call is preventing me from buying the way i would like to the second thing that happened is when the market is green and you're using margin and you gotta be really careful of this you know i i switched in july i'm like wait a minute uh uh uh what's going on here but you gotta be careful of this when the market is green the market's going up and you're using margin you're actually more likely to use more margin because there's this loop of margin reinforcement everybody on wall street's bets you know and all your friends are like look at all this money i'm making and so you're like oh i don't want to fomo i you know i got this fear missing out i don't want to end up with somo the sadness of having missed out right so you end up buying more stocks in that on margin then the next day stock values go up and then robinhood blesses you with more margin available because well stocks went up you just bought more stocks and so your margin went up because everything's going up and like things can't go down right so your brain psychologically learns like a lab rat oh yes green good i just buy every day the market is green this is why i have a real a rule in my stock course and i say do not buy on green days buy when the market is red but when you're using margin you actually fight buying on red you're doing the opposite margin is making you go oh i don't want to buy when it's red because i'm worried about a margin call instead when it's green you're more likely to buy because they're giving you more margin they're like here i have some more money you have some more money it's like like margin is is toxic it's like the worst thing you could do to your psychology but that's not it the third thing that happens is you start getting this little devil that sits on your shoulder and the devil follows you around all day long you have margin i can strike you down with my scepter at any time and kill you like it literally feels that way it's almost like you go to sleep and you're thinking about margin like instead of counting sheep you're counting margin dollars uh and then you start waking up in the middle of the night with from nightmares of margin calls uh it's like this psychology that happens when things go red and you have margin is the opposite of what you should be doing you should be buying when things are red not with margin so the fourth thing that happens is you're more likely to sell to get the devil off your shoulder in fact on september 21st i decided to liquidate 15 percent of my portfolio even though it was a red day i sold 1.2 million dollars worth of stocks now i had a lot of gains on these stocks because i stopped buying in july really you know i nibbled i say nibble in august i nibbled in august because i kind of just dollar cost average in a little bit but i didn't heavy buy since july i haven't had a heavy buy call in a while but i decided to take out 1.2 million out of the market because that would give me enough cash to completely pay off my margin in one swoop and i ended up including in that sale 442 thousand dollars of tesla sells that means i sold 442 000 worth of tesla so on monday i made a video on youtube called i sold and i explained that i sold 15 of my portfolio which obviously includes tesla because a lot of it is tesla and i specifically sold because i wanted to a reduce margin and b i want to buy real estate and i don't feel comfortable buying real estate when i have a ton of margin outstanding especially when i've got deals closing and i need to raise cash so i this two-pronged approach to let's just pay off margin or at least have the cash to pay off margin and you know what maybe now's a good time to do it anyway because if you watch my saturday video about watch this before battery day you'll see that i said if battery day misses expectations tesla stock is going to fall and it's going to pull down the entire tech market which is literally what happened and i'm not trying to pat myself on the back on that i i'm not saying like i'm a prophet or whatever i just planned for that potential if tesla bombs it's gonna bomb tech it just consistently happens and so that's why on monday the day before battery day i said let's eliminate margin now because i'm not going to carry the devil on battery day when there's a good chance expectations are going to miss after i sold on monday like monday evening elon musk tweets don't get your hopes up about battery day it's a long run play yeah and the stock started tanking anyway this led to some questions about whether or not i actually sold in the comments there were some commenters leaving comments going oh sure you sold on monday before battery day sure you did kevin i think you're just rewriting history to make a video about it so what i'm going to do right now is i'm going to pull up my m1 finance account it is actually right here there we go you can see kevin paffraut's m1 finance account what we're going to do is we're going to click on this little activity button here uh and you can see some withdrawals here yesterday i made a video saying i was buying with some of the money that i had available and i did you could see i bought in 1337 33 buys here i put 100 000 in and it bought you know all the stocks in 1337.
cool uh all right now if we scroll down to the 21st which is monday you'll see right here morning trading and i sold a little bit in the afternoon too morning trading 33 sells for 1.26 million dollars and if you click on tesla you'll see that i put in a sell at 446 dollars for the amount of oh it's 452 000 i thought it was 4.42 but whatever i sold 450 2 000 worth of tesla at a share price of 446.
and again i did that just because i wanted this cash available to wipe out all of my margin if i needed to and to buy real estate because the cool thing is now if i have margin available i can always borrow a little bit of margin i'm okay doing with that i can nibble a little bit for my margin and buy real estate because the cool thing is the lenders don't see that as debt like they don't qualify your margin debt as debt when you go to qualify for a home loan which is like stupid because margin's way riskier but anyway like i'm in a position now where i'm like oh the devil is off my shoulder because this the margin like the psychology that happens when things are going good with margin is the opposite of what you should be feeling and when things are read and discounted you have the opposite feeling with margin margin bad and it you know i have consistently said do not spend more than 30 percent of your margin stay away from the weeble and the in the robin hood where you can do 100 margin personally after this this experience i'm going to revise that down to don't use more than 10 definitely not more than 20 margin and and ideally have some kind of be in a situation where like if you get paid next week you could take all that money and pay off your margin or maybe you have a home equity line of credit where it's like if you needed to you could wire the money from the home equity line of credit and pay off your margin so if that's five percent margin fine but honestly margin sucks and it is nothing like buying real estate because buying real estate you're getting 30-year fixed-rate loans and i mentioned this earlier they're not calling you if prices fall they don't care they don't care if prices fall in real estate the value of my real estate could literally half it could be way upside down real estate could fall 60 percent it doesn't matter as long as people are paying rent i'm good and if people stop paying rent yo i need mortgage forbearance because that's the world worry it's crazy how protected real estate is today it didn't used to be like this in 2007 2008 it was really bad it's much better today but compared to margin margin's a complete disaster so right now i feel good i feel much better but this is my margin story and what happened my take and hopefully this helps you stay protected because the last thing you want is to make a lot of money and then have to start over thanks so much for watching check out the courses i've linked down below in that
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