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Investing or trading on margin is intended to allow you to trade while you are waiting for previous trades to settle. It's not meant to be a loan, but it is exploited that way by both banks and traders at their own risk. It's simple enough to fix, only allow margin to cover the amount of money waiting to be settled. In other words if a trade hasn't settled then the funds are not available for trading.

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Margin can be powerful as a wealth building strategy, when interest rates are low. Risky? Yes. Profitable? Sometimes, if you've done your homework.

I don't think you can be a consistent good stock picker, HOWEVER, there are certain companies you just know will do well because they're closely aligned to the industry you work in, for example. "Doubling down" using margin (borrowed at 1-2% per year, not 8-10%) can (maybe, sometimes, not always) be a good strategy.

If you can borrow at 1-2% a year, it's almost a no-brainer.

I've not heard this history before, is there a source you can point to? I'm interested in the history of financial instruments.

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