The PBW strategy was straight forward. The numbers just never seemed to work out. The call premiums in the market never seemed to be as high as the examples provided in the seminar, meaning that it would take many months for the call income to just cover the cost of the long term put, not just two or three months as suggested.
Peter Spann Strategy, anyone made it?
- Thread starter crc_error
- Start date
The PBW strategy was straight forward. The numbers just never seemed to work out. The call premiums in the market never seemed to be as high as the examples provided in the seminar, meaning that it would take many months for the call income to just cover the cost of the long term put, not just two or three months as suggested.
I am not sure I ever suggested two to three months. I have looked up my (old) slides and they state 6 to 9 months.
From memory you said to take the put for 6 - 9 months. And then the income from the calls should cover the cost of the put within 2 or 3 months. In other words the cost of the put would equal 2 or 3 months of call income.
No - not at all.
I'm not about to debate the merits of the strategy but the mechanics of the strategy was that it was always for 12 months.
A 12 month put with 6 to 9 months of call revenue to pay for the cost of the put.
Lots of people have variations on this - are you sure you are not confused?
I'm not about to debate the merits of the strategy but the mechanics of the strategy was that it was always for 12 months.
A 12 month put with 6 to 9 months of call revenue to pay for the cost of the put.
Lots of people have variations on this - are you sure you are not confused?
Interesting. I imagine the main difference between them is that writing puts is easily done leveraged/margin, whilst leveraging covered writes is harder. A lack of understanding of the risks of leveraging/margin (or not realising that they are leveraging....) causes them to overdo a good thing and blow up when the market tanks.
Good to see a 'presenter' honest and upfront about this sort of stuff.
Good to see a 'presenter' honest and upfront about this sort of stuff.
I need to dig out my notes and check. I did you seminar in 2000 or 2001 so I guess it's also possible that you changed the strategy and/or the notes. I do remember you editing some of your slides during the seminar
I need to dig out my notes and check. I did you seminar in 2000 or 2001 so I guess it's also possible that you changed the strategy and/or the notes. I do remember you editing some of your slides during the seminar
No, coincidently I was specifically referring to the slides from 2001 (because they are the earliest I have on my computer - earlier ones are archived).
And I was only correcting typos (and a few out of dates at the time) statements.
You have hit the nail on the head. Combine that with the weird way people react when they are losing money and you have a very volatile concoction.
One very sad example I have is a former client who we turned away from our broking division because of the considerable margin levels he wanted to trade at.
We advised him against the risks he was taking so he closed his account and went to another broker.
Prior to the last few months he was doing very well writing puts but started to get into trouble in some of the bigger falls in December and January. Instead of doing what a sensible person would have done and stepped out of the market he kept increasing his position thinking (despite the technical indications it was still falling) the market would rally.
On the 22nd January (the day of the big fall) his positions got so out of hand his broker seized all his assets with them and started selling them out at horrendous losses to cover his position.
I only know of this because he then called me to ask me what to do. Unfortunately it was well beyond my advice by then. He will probably lose everything. This is just one example of many horror stories I have heard in the last few weeks. So many normally sensible people “lose it” when it comes to short positions / highly leveraged trading – it scares me.
I am still investing in property but I have very specific criteria that would not suit most people.
I invest in land that has potential for re-development at some time in the future, shopping centres with potential to expand, and waterfront land that can be sub-divided. It’s all very long term and somewhat speculative.
This investing is “lumpy” in that it is rare that one of these opportunities comes up and I can’t always put my hands on the cash necessary to grab it in time. The vast majority of my investing is into world equities markets through Managed Funds.
We do make an allocation to property for clients where they are keen on it, understand it and it’s appropriate to their investing goals. However it is well known that I believe that better results will be had in the next few years by investing into equities.
I invest in land that has potential for re-development at some time in the future, shopping centres with potential to expand, and waterfront land that can be sub-divided. It’s all very long term and somewhat speculative.
This investing is “lumpy” in that it is rare that one of these opportunities comes up and I can’t always put my hands on the cash necessary to grab it in time. The vast majority of my investing is into world equities markets through Managed Funds.
We do make an allocation to property for clients where they are keen on it, understand it and it’s appropriate to their investing goals. However it is well known that I believe that better results will be had in the next few years by investing into equities.
And I can tell you that when I first attended in 2000 it was definitely 12 mths as well. In fact, I still have the handout somewhere with those early slides on them.
And I can tell you that when I first attended in 2000 it was definitely 12 mths as well. In fact, I still have the handout somewhere with those early slides on them.
i can also confirm it was a 12 month put.
Whats your view on global property? You were promoting CFS Colliers global property fund which has been hard hit of late, are you still putting investors money into it?
I agree equities provide a good vehicle for investing, but I think its also good to have a property in your portfolio due to its high gearing available and discounted interest rate.
I'm not to keen on your 100% finance products mainly cause I got into your multi strategie fund and Asia 1 fund which both have not done very well. Also they generally aren't self funding, however property does become self funding through rent raises in time.
Haha so true and after seeing the reply by crc error, you can now add "used" along side "marketed".
I had a quick look at the notes and saw mention of "10-12 months". I also couldn't find specific mention of how many months of call income would cover the put (on average). I didn't have time to go through the notes thoroughly - hopefully make time on the weekend.
Can either of you guys refer me to the slide that says 12 months? Send me a PM if you prefer.
Thanks.
Can either of you guys refer me to the slide that says 12 months? Send me a PM if you prefer.
Thanks.
Good grief! What's happening? Could it be the half-yearly results posted yesterday....profit down 21.2% and no dividends for the past half year?
It looks like its gapping. When liquidity is very low and there are large gaps between buy & sell prices, one or a couple of trades will produce large price differences, in this case 16.7%.
You can tell by the low volume and the gap between the highest buyer (65 cents) and the lowest seller (74 cents).
If the days volume was high there would be something to worry about but its not. Its only 2 trades at 14300 shares. Looks like the market doesn't like it tho. Theres a lot more sellers (120 000) than buyers (42 000).
You can tell by the low volume and the gap between the highest buyer (65 cents) and the lowest seller (74 cents).
If the days volume was high there would be something to worry about but its not. Its only 2 trades at 14300 shares. Looks like the market doesn't like it tho. Theres a lot more sellers (120 000) than buyers (42 000).
FXI only ever pays an annual dividend. There is no half-year div paid.
I think the liquidity is great, especially since some nice seller today gave me a bundle of shares for 70 cents.
I think the liquidity is great, especially since some nice seller today gave me a bundle of shares for 70 cents.
