Peter Spann Strategy, anyone made it?

[evand]

Great in theory but what do you call them when they stuff up. Which is frequently. There are some very average 'experts' out there.

If they weren't taking your money, they wouldn't give a rats about you. (by you i mean all investors). That might sound cynical but its true.


And don't forget, you are paying them to stuff up.

I prefer the saying 'Look at the team you have around you. If you are the smartest one there, you are in trouble!'. There's no way I could be an expert in conveyancing, banking, building inspections etc. etc. Did not Mr Ford get accused of being unintelligent (can't put my finger on the word I'm looking for) in court? His answer was that I do not need to know the answers to your stupid questions when at the click of a button, or on the end of a phone is someone that I'm paying who will know the answer?

 

[Melbear]

Great in theory but what do you call them when they stuff up. Which is frequently. Remember you are paying them to stuff up.

Wow. You must have been burnt quite substantially by some of your 'experts' to have such a negative opinion of all of them.

Find good ones, treat them like gold and take all steps to ensure that no one stuffs up. I've had my share that I've had to sack and move on, but you do that until you find one that doesn't stuff up.

 

[crc_error]

Wow. You must have been burnt quite substantially by some of your 'experts' to have such a negative opinion of all of them.

Find good ones, treat them like gold and take all steps to ensure that no one stuffs up. I've had my share that I've had to sack and move on, but you do that until you find one that doesn't stuff up.

he obviously didn't pick 20% of the quality 'experts' as we all know 80% of 'experts' are crap..

 

[crc_error]

Peter's strategy of writing covered calls to pay for the shortfall is my main MO at the moment, especially with a property in Paddington returning a massive 3.5% with mortgage payments of 8, let alone land tax etc. etc.

which stock are you writing covered calls at present?

I have been writing calls on LGL for the last 12 months, and this has been quite successful.

 

[Melbear]

which stock are you writing covered calls at present?

I have been writing calls on LGL for the last 12 months, and this has been quite successful.

I did LGL in the last 12 months, but at the moment I've got BHP, STO, OXR and some ZFX - lucky the income's still good cos the share price for ZFX is baaaaaaaaaaad.

 

[The Y-man]

ZFX - lucky the income's still good cos the share price for ZFX is baaaaaaaaaaad.

ZFX gooooooooooooooooood today for our shorts

Cheers,

The Y-man

 

[Pete]

As was mentioned, the strategy worked for Peter Spann. As was also mentioned, he is a savvy investor.

I recollect he was profiled in API - two parts in consecutive issues in ~mid 2001.

For sure others have had similar success with similar stratagies. And others have had similar success with different strategies.

Something else I read somewhere was along the lines he specialised in one bedroom apartments in one or two well located suburbs in Sydney. More interestingly I vaguely recall comment about him buying (not all held) 180 or 200 of these units. So he was not just an 'average plodder', but really going seriously fast; really focussed & going very hard.

I like Jim McKnight's "Ordinary Millionaires" book and one of its message that there are many ways to property wealth.

Remember too Steve McKnight & partner bought 130 houses in 3.5 years. This sort of progress is possible. It can be done. There are ways. Like the Henry Ford quote: if you think you can or think you can't, you're right. One very large indicator for success is positive thinking & similar attitude. Rather than questioning too much what others have done, focus on setting and achieving your own goals.

best regards,

 

[Peter Spann]

Always good to see I can still get some coverage in here (even if it's mostly by new "faces" I don't recognise) - thought you guys had forgotten about me!

Just 3 comments:

1. Hi Bill, willair, washington - good to see your positive, cheery comments again – I feel the love - BTW I still believe it is POSSIBLE for every person to become wealthy in a very short period of time, I have never said it is probable for most – frankly most people don’t have the “ticker” for it;

2. There are heaps of inaccuracies in what people have said about me and my strategy in this thread but it doesn't really matter - property, shares, with or without Financial Planner, timing the market, cash flow constraints, interest rates etc - none of that matters in the long term - I believe what I “promoted” in my book is to a). get a strategy that suits you, b) invest in that strategy unfailingly and c) believe in yourself;

3. Discussion on strategy, ins and outs, rights and wrongs is always useful regardless of people’s points of view however it always amuses me when drongos comment on other people’s personal life – my beautiful friend is very real and very beautiful – the book is dedicated to her and a number of people in the forum have met her – keep your comments to investing strategies would be my suggestion.

And finally it is well known that I have done well in my investing AND my business – but not every property I have bought did well, not every share I bought went up, not every fund I have invested in (or recommended) has done well either – that’s obvious and many people in here love to glorify where I have got it wrong – that’s OK, but and this is a HUGE but, across my broad strategy I am getting it right. Over the long term my property portfolio has done very well, my share portfolio has done well, and my managed fund portfolio has done well and so have my clients.

This is a forum for independent investors – all power to you – it is obvious most of you would be sceptical about financial planners – the very concept of paying fees to people to help you invest is an anathema – fine, but don’t hit out at people who want and need advice to invest. For me the re-structuring of the way I invest 7 years ago to optimise my investing vehicles (including tax management, trusts, superannuation and structured investing) revolutionised my wealth creation and has added many millions onto my net worth – and I could not have done that without quality financial advice.

In the end it’s horses for courses. None of you are going to do badly if you stick to property and never invest in a share and vica versa. As I said my mantra is simple...

1. Pick a strategy that suits YOU;
2. Invest in it regularly and without fail;
3. Believe in yourself

Follow THAT and you won’t go wrong.

 

[crc_error]

Hi Peter,

Thanks for your reply! Good to see you active in this forum!

I think you nailed it on the head. You made it from investing AND successful business. Without a decent cash income, you can't fund 100 properties. Since property today is far more 'negatively geared' this is moreso the case.

The problem I see it the normal average Joe Public working in a factory earning 45k a year is not able to make it in a short period of time. You can make it over 20-30 years, but then your too old to enjoy the fruits of your labours.

How many IP's can a person accumulate on 45k a year? Each IP you get, you will need to wait 5-7 years for the rent to catch up and become cash flow positive before you can purchase the next property. Sure if your on 100k, you can purchase say 5 IP's quickly, and wait for all 5 to become cash flow neutral in 7 years. Then you can add to your position and make it in 10 years time.

Then the problem I see is drawing out equity to invest into shares. Again this relys on your ability to service debt. People on lower incomes, will find it harder to do this. Now with interest rates going up, this will become less effective stratergie.

Either way I believe your seminars were of good value and encourage people to invest. And if they do it on a small scale or a large scale, I believe you have achieved your goal.

I also disagree with the sentiment here where paying for a quality financial planner is a waste of money. If your starting out with little knowledge, or you don't want to take the time to learn how to invest, then a planner is vital.

Tom.

 

[ArJay]

keep your comments to investing strategies would be my suggestion.

Too right Peter...

 

[FrankGrimes]

Hi Peter,

The problem I see it the normal average Joe Public working in a factory earning 45k a year is not able to make it in a short period of time. You can make it over 20-30 years, but then your too old to enjoy the fruits of your labours.

Even if Joe Public starts when he's 25-30 and it takes him 20 years to reach retirement, he'd be financially secure at 45 or 50. That's still a very long time to enjoy retirement? This is a pretty good result for doing very little other than just accumulating over time.

However, I personally think anyone that makes no effort to better their salary over time is lazy IMO. How does he become the factory manager? Is what I'd be asking. The more you make from your day job the easier it is. Focus on your career and buying investments.

 

[Sunfish]

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.

 

[crc_error]

Sunfish, how would writing naked puts in a bear market prove profitable?

 

[crc_error]

Since we are talking about Spann, I'm sure he would love this!! Prehaps he can take his 'beautiful friend' for a cruse in one! or it could be a suggestion for his wedding car once the time comes!

 

[Sunfish]

Sunfish, how would writing naked puts in a bear market prove profitable?

It wouldn't. You have to buy the puts.

 

[mupeteer]

I don't like covered calls. What you are doing is being fully exposed to the downside, whilst capping your upside. If you take a portfolio of stocks, it is the few star performers that make the return for you. Covered calls will ensure this doesn't happen!

Covered calls are usually marketed by people who don't really know what they're talking about. If you really must do it, write puts instead! You will have exactly the same return profile but with less brokerage costs. Short put = long stock + short call.

 

[rambada]

Wow, seems a rather catty attack on what is actually a good strategy. Suitable for some but not others, but still a good strategy. The majority of discussion on this forum revolves around (albiet without stating it directly) exit strategies. That is turning capital from RE into groceries from Woolies. For all the sprukers on the speaking circuit, this is my yard stick as to whether they are for real or not. The 2 successes that come to mind (and have similar concept of strategy) are Steve Navra & Peter Spann (and also the Reno Kings). At least they lay it out there and cop it.
Me. I view all these gentleman as the 20% of the 20% of the 20% - so they must be doing something right. As such I follow there broad principles. As the person being in absolute control of my outcomes (and no one else) I tune it to me. I grab points from the Reno Kings, Peter Spann & Steve Navra, mix them with me & it comes together - for me! Mistakes & all but it is a strategy - structured, cookie cutter & replicable when I leave this planet.
And the present & future is bright.

 

[Humphrey]

Personally I found it impossible to execute Peter Spann's Protected Buy Write strategy. In the real market, the ratio between the cost of the put and the income from the covered calls was quite different from the examples he gave.

But the main problem was the part about if you are exercised (if the calls you sold are exercised) then you should just re-purchase the share at the higher price - smaller number of shares but adding up to the same previous dollar value. The rationale being that you still have the put protection. The problem is that the put level is now much further away from your share price so if you the shares drop to the put level then your potentially going to lose quite a bit of money.

 

[Ol School Skata]

So Ethann, have you looked for alternatives to the protected buy write strategy? Have you considered spreads - selling a call out of the money and buying a call with a higher exercise price or selling an out of the money put and buying a put at a lower exercise price

Eg sell 10 AMP $8 Call options and buying 10 $8.50 Calls simultaneously.

OSS

 

[Brenda Irwin]

Lol, that is one cool limo.

I have not said anything in this thread to date as I figure it was best coming from Peter himself. Thankyou Peter.

The stategy is certainly possible but like all investing there are a lot of what if's to it all. At the right moment in time it can really snowball and away you go.

First though you need a bit of equity in an IP or two which really thins out the number of successes and many won't even get that far before bailing out and going back to their old ways of spending it all.