Peter Spann Strategy, anyone made it?

[Propertunity]

So your telling me there are no happy poor people?

No I did not say that. Try reading what I said again. There are unhappy poor people, there are unhappy rich people. There are satisfied & unsatisfied rich people just as there are satisfied & unsatisfied poor people. Being happy and being satisfied has little to do with being poor or rich.................the same as being greedy has little to do with either. (Although when surveyed, rich people tested as happier). But for me, I tried poor and I did not like it - so I can't recommend it.

Last time I checked, australia - which is a rich country - has one of the highest youth suicide rates in the world.. why is that?

Please start a new thread for this topic. Too many things to say about it - don't want to hijack the thread.

From what I see, rich people make sacrifices in family time, and miss out on family, kids growing up etc..

I think that is the crux of your argument - it is only "from what you see". I see some rich people spending lots of time with kids and some poor people who won't drag themselves away from a TV set or the TAB to spend time with their kids. I don't think it is a function of being rich or poor.

if they think driving a BMW can make them happier, then they are only fooling themselves.

Nope, I've tried driving a BMW - I was much happier doing so that driving the old Datsun I had previously.

living comfortably or been 'rich' are two different things.. You can work, save, invest, and live a reasonable lifestyle and be very happy and content.. you might also have a job which you love, and even helps others in the community...

Agreed. But it is all relative too. Having to rent a HC house in Aust. would be considered rich by someone living in a cardboard box on the streets of Soweto.

going the next step where you need to be ruthless in business, never see your family, cause damage to your marriage, and miss out on your kids growing

Not necessarily. If that has been the case for you, perhaps you were doing it wrong Yes, I do not deny that some people have done that and swapped family life for riches. But it does not have to be that way.

I think you will find living a simple lifestyle will be a more rewarding lifestyle than been a stressed out businessman..

Some people thrive on stress and get bored spitless with the simple lifestyle thing. You have to do what's right for you.

 

[crc_error]

Some people thrive on stress and get bored spitless with the simple lifestyle thing. You have to do what's right for you.

yes, I agree with what your saying.. been rich doesn't automatically = happy, and been poor doesn't automatically = unhappy.

You can be happy and unhappy in both situations. Someone who is poor and unhappy, is unlikely to find a lotto win changing this.

The reason I make these comments is because going to spanns seminars Peter presents all these pictures of riches, like fast cars, boats, diamonds and young hot women as something to be desired by the ordinance, and his bait to sign up with him. But this display of wealth is only a illusion as if these riches will bring with it satisfaction and happiness.

Its all about finding the right balance, however I see some people doing property investing, have 5 houses, yet they go camping for their family yearly holiday and cook sausages to save money.. if this is the cost you need to pay so as you can be 'rich' in 20 years time, forget it!

Enjoy life today, invest some for tomorrow, and be happy with what you have, and spend as much time with family and friends as you can, as one day they wont be around, and these are the things which matter, not how big your house is, or fast is your car.. the novelty of fast cars and big houses wears of quickly and you will only find yourself wanting more.

 

[Ausprop]

having had an awesome 40' boat I can confirm the novelty wears off, however fast cars and nice houses are something you use every day. balance is the key, but don't go overboard in discounting their worth.

 

[jingo]

Agree with Propertunity.

Also who said it had to be an "either" ..... " or" scenario. Rather than this or that, I like to approach my pursuits from the perspective of "this and that" .

In addition to knowledge (people doing Peter Spann's seminars 10 years ago and not retiring rich in seven years), one needs to take intelligent action. Knowledge applied yields results. People also need to be flexible to change and refine the strategies they employ as market conditions change. The author's and/or educator's we learn from and use to guide us, are not responsible for our actions and eventual re$ult$. We are.

We cannot change the wind, however we can change ourselves by setting a different sail.

Great post Player!

Ultimately we are responsible for all of our decisions in life. We seek information and absorb ideas from those around us and take on board the ones that seem most appropriate to our own situations/goals.

I enjoy reading Peter's posts. He is a highly intelligent investor who ultimately began his highly successful wealth creation plans with residential property; proving that property can indeed make you wealthy!

Peter, you are an absolute inspiration!

Regards Jason.

 

[RumpledElf]

might be worms?

Pft, she's all wormed up. She's just one of those irritating cats that eats 3 dry cat biscuits and a gecko every couple of hours.

I'd worry more about the baby, she eats more than any of us and she doesn't have spare tyres. Must be all that hair she's growing. She's like a 2 foot tall walking mop.

As to lotto wins, what are the stats on those? I vaguely recall the vast, vast majority of those poor people who play lotto (well, win lotto) you mention end up either back where they were or worse if in a very short number of years. The stats are actually pretty scarey. For those people, money might buy happiness but it has a rather short timeframe.

 

[BayView]

why can't everyone enjoy wealth and prosperity?

Everyone can. But it takes lots of hard work, sacrifice and dedication. Most people can't be bothered with all that; "the path of least resistance" - in other words; let's take the easy route.
From my experience, most people do (enjoy their wealth). The old "be poor, and be happy" statement is a myth invented by the poor. Rich people are usually happy. And if I'm gunna be unhappy, I'd rather be rich and unhappy, than poor and unhappy. At least if I'm rich and unhappy, I can give all my millions to the unhappy poor, and make them happy for a while, and this will make me happy for a while too.

Greed = having more than your entitled to, which leads to having to trample on people to get ahead.

Warren Buffet, Bill Gates, Steve Jobs, George Soros to name a few. They surely are not entitled to all their wealth? Thank god they have it though; they do the world a great service.

I'm becoming rich, and I've trampled on no-one to get what I've got so far. In fact, I want to share it around as I get more.

Imagine being able to afford to invite your friends down to your beautiful home by the sea, and shout them lovely meals and grog, swim in the pool and a great w'end at your expense. Yeah.

If people were not so focused on been rich and trying to accumulate more and more during their life time, the world would be a better place.

Some people don't want to accumulate anything, and I admire them for being happy with less. Most people want more. Me included.

Unfortunately, to experience many of the really cool things modern life offers, we need lots of cash.

Try to be a pensioner and get to Disneyland with the kids, for example. Not that Disneyland is a "life hightlight" - I'd rather go on a ship to the Antarctic for 3 weeks, but you get my drift.

 

[Kenster]

... I enjoy reading Peter's posts. He is a highly intelligent investor who ultimately began his highly successful wealth creation plans with residential property; proving that property can indeed make you wealthy!

Peter, you are an absolute inspiration!

Regards Jason.

Peter start up story through IP was inspirational.

However, things changed when he moved across to managed funds and, as put it in another thread, got in bed with Macquarie.

Many who survived the communist regimes would know this saying:

"Never listen to what they say, but watch closely what they do".

 

[DebtEquity]

Give me $100k a year tax free and time to do what I want anytime! I will gladly take instead pretending to be happy while I am poor and can't afford the necessities in life!

Heres to being Happy, financially comfortable better than unhappy and poor!

 

[chilliaa]

But the thing about covered calls is that you own the underlying share. During a slump, as we have had the last four months, you wear the whole drop less your premium earned. During the recovery the buyer of your calls pockets the lion's share of the gains.

The strategy is ideal for long steady bull markets is how I see it. To make it work in all markets you must also be able to write naked puts, spreads and straddles etc and I don't know that. I think you must also have explicit trust in your charts and again, I don't.

how time turns on its head.
This is exactly the issue im facing at the moment.
Always opperating under the motto a 'fool and their money is soon parted', i have taken out a covered call against NAB and will roll it. Rather than apply it accross my whole portfolio im going to try with just one stock and see what the result is.

This will be my sacrificial lamb, but agree here, time exposes weaknesses in new inventions of the wheel

 

[Piston Broke]

Naked puts also work great in a bull market, but in a falling market the result is similar.
Even though you may get a little more premium after the market gathers momentum on the downside.
But the real issue is always which way is the market going, and am I following.
As a band once sang:
"Should I stay or stay or should I go now?
If I go there will be trouble
An' if I stay it will be double"

As for Peter, I do respect that he has the guts to come here, argue his point and slug it out.
Most managers out there are hiding under their bed and under their lawyers desk (now you know what that knocking sound was), and behind threats of legal action.
And I still think his first 2 books are some of the better reads out there.
As for the title of the thread, again in a bull market all buying works great.
And I would'nt call PS's strategy "renovation", rather than a spruce up/tidy up.
When there's a strong bull market I don't think it even worth doing major renovation, and I reckon it's the best strategy for a depressed market where there is no capital gain so you need to create your own.

 

[redwing]

how time turns on its head.
This is exactly the issue im facing at the moment.
Always opperating under the motto a 'fool and their money is soon parted', i have taken out a covered call against NAB and will roll it. Rather than apply it accross my whole portfolio im going to try with just one stock and see what the result is.

This will be my sacrificial lamb, but agree here, time exposes weaknesses in new inventions of the wheel

Keep us posted on your progress Chilliaa, even on another thread or SS Blog, it would be an interesting journey to see how it all unfolds

 

[chilliaa]

Keep us posted on your progress Chilliaa, even on another thread or SS Blog, it would be an interesting journey to see how it all unfolds

Thanks redwing, things are pretty much 'boring' now which is just how i like it. The portfolio net value has moved up each month from end of march09, but nothing like the increase in movement experienced in late march to early april (or the wholloping i received trying to dollar average through 2008).

I still view the market as being excessively cheap on a five year view point which is why im taking my time with the call writing strategy, i havent spent two years of my life building a portfolio which contains a number of 'australian leader shares' at what i perceive to be on Myer annual stock take sales prices, only to have them called out from underneath me with low option premiums.

Its quite interesting seeing the call prices on expiry in a few months time, nobody is paying much of a premium, which indicates the 'market' still expects very little appreciation in the share prices. If i was more 'gutsy' and wasnt already fully invested, i would be tempted to buy some long dated out of the money call options.

 

[Bill.L]

Hi Chilliaa,

Its quite interesting seeing the call prices on expiry in a few months time, nobody is paying much of a premium, which indicates the 'market' still expects very little appreciation in the share prices.

Welcome to the world of option trading and the games MM play.

If i was more 'gutsy' and wasnt already fully invested, i would be tempted to buy some long dated out of the money call options.

Which shows you are a beginner in this game.

Let me explain.. We have just had a week or so of rising prices in NAB, it is trading above the upper Bollinger Band (which is 2 standard deviations above above a 20 period moving average of price). The MM knows this, and statistically the price will tend to fall to or below the moving average.
Something you will notice over time is how the call options always seem to be cheap when you want to write them, and expensive after the market has had a pullback. Vice versa for puts.
Another little discrepancy you will notice is how put options usually seem a little cheaper for the same distance out of the money.

As you get use to what is happening with the call price, a way to enhance returns is to look to buy back the call if it has lost 80% of it's value (providing commissions don't kill the idea), then if/when the stock price goes back up again you will be able to rewrite the call earlier than you otherwise could, you choosing the time rather than having to wait for expiry when out of the money.

bye

 

[chilliaa]

Hi Chilliaa,



Welcome to the world of option trading and the games MM play.



Which shows you are a beginner in this game.

Let me explain.. We have just had a week or so of rising prices in NAB, it is trading above the upper Bollinger Band (which is 2 standard deviations above above a 20 period moving average of price). The MM knows this, and statistically the price will tend to fall to or below the moving average.
Something you will notice over time is how the call options always seem to be cheap when you want to write them, and expensive after the market has had a pullback. Vice versa for puts.
Another little discrepancy you will notice is how put options usually seem a little cheaper for the same distance out of the money.

As you get use to what is happening with the call price, a way to enhance returns is to look to buy back the call if it has lost 80% of it's value (providing commissions don't kill the idea), then if/when the stock price goes back up again you will be able to rewrite the call earlier than you otherwise could, you choosing the time rather than having to wait for expiry when out of the money.

bye

Hi Bill, firstly im the first to admit that i am a complete beginner in this game.

I have bolded this for everyone to see. Sometimes in Somersoft I can sound at times at bit aggressive, confident, or whatever you want to call it. Generally this is where i really feel i have some opinion which can add value to this forum (and for which i think i have some experience to comment).

So let me be completely crystal clear again: i have very limited knowledge when it comes to option strategies (but that is also why im very happy to hear from more experienced members on this forum). So anything i say with regards to anyform of option strategy please take it with a grain of salt. I'm on a learning curve here.

 

[chilliaa]

Hi Chilliaa,



Welcome to the world of option trading and the games MM play.



Which shows you are a beginner in this game.

Let me explain.. We have just had a week or so of rising prices in NAB, it is trading above the upper Bollinger Band (which is 2 standard deviations above above a 20 period moving average of price). The MM knows this, and statistically the price will tend to fall to or below the moving average.
Something you will notice over time is how the call options always seem to be cheap when you want to write them, and expensive after the market has had a pullback. Vice versa for puts.
Another little discrepancy you will notice is how put options usually seem a little cheaper for the same distance out of the money.

As you get use to what is happening with the call price, a way to enhance returns is to look to buy back the call if it has lost 80% of it's value (providing commissions don't kill the idea), then if/when the stock price goes back up again you will be able to rewrite the call earlier than you otherwise could, you choosing the time rather than having to wait for expiry when out of the money.

bye

Hi Bill,
so in your opinion was it a good idea or not to write covered calls against NAB. I wrote 3 call options at $25 (July expiration) for which i received 13c (multiplied by 1000x3). My logic was NAB has run quite hard from $21-$22 and seems flavour of the month amongst the 'big four banks' (remember just 6 months ago when everyone was saying dump NAB and ANZ and hold just westpac and CBA).
If it goes above $25 by july30 then i can roll the options over to next month. I have also received the dividend already (unlike CBA for which i didnt want to write any options even though they have some decent premiums).

In regards to your comment about the different in premium between writing them and buying them back. Yes i noticed this. As i said a day after writing the calls (which i think was Thursday) i noticed on the ASX site a trading range between 12-16or 17c on the bid/ask (but someone told me never buy back an option on a friday, its got two days worth of premium being a sat/sun even though the market doesnt trade).

At the moment im paying $65 a trade using a premium broker (which i cant change as my whole account is linked to the premium broker including leverage). There is another headache here, i pay 1% brokerage (although this will be negotiable down in the event of a big trade), so i have the 'risk' of receiving a small option premium by writing the calls, but if im wrong then if i have to buy back the stock im up for 1% trading cost on the underlying share.
To counter this my brokers have offered a flat 1% value against the whole portfolio as a management fee (and for which i wont pay any brokerage for individual buy/sell trades of shares subject to fair trading). The trouble with this is since the markets have stabalised my buy/sells as reduced significantly.
During the recent turbulence, especially from Nov08-March09 i might have spent an average of $500-$800 a week on brokerage, this has now dropped down to only a few hundred (which as a % of the portfolio is less than 1%).

anyway appreciate your views and please feel free to comment (together with anyone else, this is the only way i can learn).

thanks again.

 

[Bill.L]

Hi Chilliaa,

Hi Bill,
so in your opinion was it a good idea or not to write covered calls against NAB

Answer to that is rock and a hard place stuff. The market is great in proving all sorts of things wrong over time.

The timing of your sale seems good based on statistics, yet the month and strike price may not be. With the brokerage you are paying, plus the bid/ask spread when you need to roll, the skinny premium you have makes it a losing strategy for me.
If I was to do CCs, (and I will restate that I think naked puts are a far better strategy), then I would look to time the sales (like you have done here) but gone for in the money calls an extra month out. This gives a far fatter premium plus a bit of time to buy them back cheaply during a pullback. Of course the risk is price shoots away and the call buyer makes a motsa at your expense.

The problem with CCs is never the price just going one way, it is when it goes say up, then reverses rapidly, sits at low price, then rallies violently just after you sell the next lot of calls.

The real weakness of any options strategies here in Australia is the thin market, which leads to massive bid/ask spreads, and the high commissions brokers charge. These high costs tend to turn many profitable ideas into losing plays.

bye

 

[Ol School Skata]

Just thought some might be interested in this online covered call game recently released by Peter.

http://www.magicmoocow.com.au/

OSS

 

[willair]

Just thought some might be interested in this online covered call game recently released by Peter.

http://www.magicmoocow.com.au/

OSS

How to successfully trade the Magic Moo Cow (Covered Call) Strategy
How to deal with your broker and place your orders
Which calls to write and which to avoid
What to do at options expiry and why
Which shares will get you the best premium income
How to avoid common mistakes, and
How to avoid paying too much brokerage ..

You can also do the same on the "ASX",and just about every other Bank site,all you need is a simple understanding of leverage,gearing on gearing and in this market the sky's the limit,..imho..willair..
http://www.reuters.com/article/ousivMolt/idUSTRE56N63H20090724