Bill; To make the point clear (because people always ignore the possibility of a bear market), you really need to spell out the downside of leverage. Using your example it goes like this...
buy a $10 stock w/ $1 cash and $9 loan*
if it deappreciates to $5 sell, you get $5, - ($9 + interest on the loan(say $1)) = -$5 net on a $1 investment. So now you've lost your dollar, and you owe $5 to the bank.
In the absence of an effective diversificiation strategy to help you ride out market swings like that, being heavily leveraged is a very risky bet -- as many homeowners are finding out who bought too much house without ample cash flow to make effective payments, and with too much money down on 0 interest loans that are starting to convert.
