“I think a repetition of 1929 is most unlikely. But obviously economic and human affairs go in cycles. It could well be that some time there will be a collapse. I’ve always thought that if we did have one, it would be the dollar, not the stocks.”
Today the 50% number is only for Reg-T, and even then the net account requirement (maintenance) is lower. But there's also portfolio margin, which gives you much more leverage, and a lot of people end up using it who wouldn't otherwise because Reg-T doesn't handle offsetting positions (i.e. a hedge counts as more risk, not less, for purposes of buying power).
“I think a repetition of 1929 is most unlikely. But obviously economic and human affairs go in cycles. It could well be that some time there will be a collapse. I’ve always thought that if we did have one, it would be the dollar, not the stocks.”
Warren Buffett has predicted that we’ll suffer a “hair curler” some time in the next 20 years.
For those that like to prepare, Morgan Housel has an excellent book called ‘The Psychology of Money’.
"margin requirements are 50%, five times what they were then"
Oops
FINRA Margin Debt https://share.google/2Y3ZcRNBlnCguTPK7
Today the 50% number is only for Reg-T, and even then the net account requirement (maintenance) is lower. But there's also portfolio margin, which gives you much more leverage, and a lot of people end up using it who wouldn't otherwise because Reg-T doesn't handle offsetting positions (i.e. a hedge counts as more risk, not less, for purposes of buying power).