Hello again Bill (sigh),Bill.L said:
Anything else you want to get off your chest on your one man crusade against me?
I did not write the client stories - struth - that's why they are client stories. Your veiled implication is, I guess, that I didn’t write the book – all publishers are required under Australian and international copyright law to identify the moral rights author – in other words the person who actually wrote the book – you will note inside the front cover that I am identified as the moral rights author. Oh, and I can't say I can remember every 109,000 words in the book.
As for interest rates - you are a bit off - by 1992 rates were coming down significantly.
The period of time referred to in the book was around this time. By the time I started standard variable rates were down to about 8% with discount rates as low as 7%.
Rates then went up again in 1994 and 95, starting to fall again towards the end of 96.
In fact I paid up to 15.7% interest on some properties I purchased.
And while I have your attention – Covered Call – why instead of supposedly cheaper strategies?
1. They are simple and easy for most people to understand;
2. When people understand they implement and when they understand they are more likely to react to negative situation with the correct defensive measure;
3. They are an easy options strategy to start with before progressing onto more complicated strategies;
4. Most clients already have shares so they can use them as a return enhancing strategy;
5. The ASX (don’t bother quoting Macmillan at me – I’ve read it) state it is the lowest risk options strategy so, we who are bound by the FSR and the ASX business rules can recommend it to clients, where suitable, who are at a lower risk profile than that required for the strategies you have so far promoted it “opposition” to them;
6. It is not the only options strategy I teach, in actual fact I teach spreads as well, but in my experience most clients prefer the Covered Call strategy;
7. A spread is only cheaper if you include the cost of brokerage on the shares. This is usually a once off cost and clients are encouraged to trade out when defensive strategies are required. This is just 1 brokerage fee. A spread requires 2 brokerage fees going in (one fee on each leg) plus brokerage on any defensive trades, so potentially up to 4 brokerages. At most the writing of a call and a defensive strategy like a roll up or out only requires 2. So excluding the share trade in the first place it seems spreads are more expensive then writing.
8. I like it better than spreads and that’s about all the justification I need.
Good luck to you Bill but what do you gain by all this effort? (That's what I can't figure out about you). It doesn't educate people - it just requires me to expend energy replying.
P.S. Just because you repeat your questions over and over again (often in different threads or words) does not mean I didn’t answer them in the first place. You may not grow weary of repeating yourself, but I do.
P.P.S. OMG – yes, I make a living out of selling financial products. Memo to self – become a monk to make Bill happy.
