Hi all,
I am concerned that crashy may be giving people false impressions when marketing his positive gearing share market strategies on this site and on his own site.
eg. on this page of his website http://www.posigear.8k.com/index.html , he says ‘I was able to stop working full time at the age of 29 by using simple strategies that produce regular income’
whereas in these posts on this forum he says that he is TRYING to get a job as a financial planner and is getting knocked back due to a lack of experience;https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=2822
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=2437
https://www.propertyinvesting.com/forum/topic.asp?whichpage=3&ARCHIVEVIEW=&TOPIC_ID=3009
in this post,
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=2348 , he is looking for someone to help him get finance to do renovations as he is self employed as a tradesman – ‘Im looking for someone who can help me renovate FULL TIME, or help with finance’
What i found most concerning though was that in one of the posts from above, he says ‘I still trade stocks at night which makes some money, but its very irregular, risky and the banks dont like it for financing.’, but he then says on his website that his course will teach you how to ‘return 43% p.a without taking more risk’
Returning this figure consistently per annum is extremely unlikely, some would say impossible.
I am sure the course has some good material, but I believe the way it is being promoted is potentially misleading and I would rather point this out than see any fellow forumites mislead.
Clearly ALL his statements cannot be accurate.
Cheers
Matt
Matt
“whereas in these posts on this forum he says that he is TRYING to get a job as a financial planner and is getting knocked back due to a lack of experience”
I wanted a relevant job so that I could obtain a license. A licence means I can start my own investment company. Secondly, I have been a student for two years, which has meant I could not work much, I had to subsidise my income using the strategies I promote. I did not make false claims of retiring a millionaire as some do, I merely said that I stopped working at 29 (which is true) by using positive geared strategies (which is also true). I could not have studied like I did nor moved interstate without this added income.
“he is looking for someone to help him get finance to do renovations as he is self employed as a tradesman – ‘Im looking for someone who can help me renovate FULL TIME, or help with finance'”
Im not sure what you are saying. Im not allowed to invest in property now? I WAS a self employed tradesman in NSW. I stopped working last year (when I was 29) and moved to QLD. Why wouldnt I spent my spare time renovating? As I have already stated, it is hard to get finance when your income is low (thanks to my tax minimisation strategies).
“What i found most concerning though was that in one of the posts from above, he says ‘I still trade stocks at night which makes some money, but its very irregular, risky and the banks dont like it for financing”
Oh god. So now Im not allowed to TRADE either? Dont confuse trading with positive cashflow share investing. (seems I need to keep explaining this). Whether I trade or not is my business. I discourage others to trade because 95% of people suck at it. The risk of night daytrading has absolutely nothing to do with the risks of positive cashflow shares. Please dont quote out of context.
I have not misled anyone and I think you owe me an apology.
I’ve changed my post
Well Done Matt
your detective work is excellent.
I’ve some Questions for crashy
Did you come to the forum with the intention of promoting your own business to those on the forum? is this is why you continually claim the market in Melbourne will crash by 30% like it has in the early 90’s, even after it is proved Melbournes market never crashed like that.
Why do you
Push your special knowledge on the stock market. In the past you have put up ficticous figures showing the sort of returns that can made. Unfortuanately many Guilible people are being drawn by the promise of high returns (you often quote 40% plus a year.)
Crashy i know you have a lot to offer and enjoy a lot of your input in the forum but the way you go about things here sometimes only lessens the value you can offer
regards westanwow matt you should start a private investigating business[
]dags nobody
the hippie investorHi guys,
I have to admit I don’t read many of crashy’s posts (sorry crashy) but some of this stuff here is bordering on defamatory, so I’d make sure I was certain of things before I started making assertions. I don’t know either way if he’s the real deal or not… but I do know that people can be defamed via internet forums.
Cheers
rI didn’t really want to get involved in this thread at all, but a few of us here have gone a few rounds against the market. They have all been noticably questioning to say the least.
I have asked for a few of crashy’s assertions to be substantiated in various threads. Not one of my points has been addressed…..hmmmmmmmmmmm.
Must admit I have noticed the same things about crashy and his posts, but his answers seem ok. Maybe he just doesn’t think about what he has said in the past, and leaves out pertinent info.
However, in his defence, those who write covered call options know how easy it is, in a short amount of time, to make 3-6% per month on quality shares, much more on volatile stocks. So 36%p.a. is not unreasonable, and many % more is possible, but with the higher % goes higher risks.Until you do the study, you cannot know how easy this is.[]Much better Westan. You really must resist posting anything potentially libellous. It’s so not worth it! Just be constructively critical.
Crashy I don’t mind you promoting your website etc, but you have to be really subtle about it, like all the mortgage brokers here[].eg
“Those who were smart enough to realise spending $295 to save thousands of dollars in tax already know about this strategy.”
isn’t really subtle enough.I’m actually quite impressed with the mortgage brokers here, as they quietly and politely give friendly advice which makes us want to use them even if they have given away the name of the intuition we should be borrowing through, as it doesn’t cost us extra.
Just my 2c.
Jim.
Must admit I have noticed the same things about crashy and his posts, but his answers seem ok. Maybe he just doesn’t think about what he has said in the past, and leaves out pertinent info.
However, in his defence, those who write covered call options know how easy it is, in a short amount of time, to make 3-6% per month on quality shares, much more on volatile stocks. So 36%p.a. is not unreasonable, and many % more is possible, but with the higher % goes higher risks.Until you do the study, you cannot know how easy this is.[]3-6% ?????? Hilary, you must be writing atm or itm calls to be getting 3-6% month in month out. The standard covered call writing dogma is to write otm calls….which will return 1-2% per month on average.
If you can get 3-6% per month, every month, writing otm calls PLEASE PLEASE show me where, so I can write some.
Cheers
Hi everyone,
Actually I am glad Matt brought this up because I have been wondering about the same….
I have nothing against Crashy. Infact I find him very helpful… but I couldn’t quite reconcile his website with what he had written on this forum a few months ago.
I think the key is in the words “Stop Working” which is VERY different from “Retiring”.
So Crashy is correct, even though it is a bit cunning.
Richmond, I think that your remarks about “bordering on defamatory” are far fetched. What Matt has pointed out is FACTUAL and was written in an elegant manner.
It is actually a good opportunity for Crashy to explain himself, which he has done succesfully.
I for one am pleased that this subject was brought to light because it was always at the back of my mind.
I am sure Crashy has a lot he can teach us, even though he comes across over zealous some times…I give him a lot of credit though for launching out on his own.
Also concerning this “calls” business (3-6% per month). If it that good why isn’t every one doing it? and if some are making money from it there must be others loosing? so what is the score?
Pin
Does anyone have his course and would they recommend it.Damn all this marketing I want to buy everything.
Hi pinit2000 and all
Pin i think that Richmond’s comments were in regard to my post which i have since changed to be far less confrontational.
Thankyou Richmond for your response.
Pin in regard to your comment about covered calls, friends of mine who were initially very excited about it after doing some stuff with Peter Spann a few years ago after some success don’t do it any more, and its not bcause they made so much money that they are now relaxing in the Bahamas.
regards westanPin,
“Also concerning this “calls” business (3-6% per month). If it that good why isn’t every one doing it? and if some are making money from it there must be others loosing? so what is the score?”
You have idendified the problem with the strategy. You need someone on the other side of the trade. Who would purchase a call option with no intrinsic value for 3-6 % of the value of the shares. No one with any brains would.
Here are some current figures.
The closing price of National Australia Bank on Friday was 31.30
The closing price of a $32 call option expiring 27th November 2003 was 45cents.
That’s 1.4%…..but it is nearly 8 weeks till expiry.
So your return per month…..the princley sum of approximately 0.75%
The 31.50 option closed at 67cents which bumps the return up to about 1% per month.
Fact!!!!
Also if your option is exersized you will have to sell your shares at the relevant strike price. You may want to keep those shares and you will have no choice. If you have held the shares for some time and are holding a nice capital gain, it will of course be a CGT event.
Wayne
Wayne
Or is it the duck that sits?
“The closing price of a $32 call option expiring 27th November 2003 was 45cents.”
I could swear I have educated you about using closing prices of options before on hotcopper. Once again:
DO NOT USING CLOSING PRICE AS VALUATION. THE LAST TRADED PRICE IS USUALLY OUTDATED AND IRRELEVANT. THEORETICAL PRICE SHOULD BE USED.
You waffle on about greeks as though they are some magical secret that only the elite know about, when the truth is they are largely useless because they are dynamic. Delta is the only one that is compulsary to know. The other two are mere trivia. I find it strange that you preach about the greeks yet you cant even value an option properly.
The actual value of the option is 54c according to the ASX. That makes it 1.7%, but is is a fair way out of the money. Secondly, you deliberately picked a stock with a low current Implied Volatility, which lowers the call premium further. If we look at a more realistic IV like 23 on BHP, we find the premium is 1.95%. Also, you can go out of the money and design your own premium, just because you selected one at $32.00 does not mean everyone does that. There is no reason why you cannot write at the money calls.
If we are going to do this right, we need to set expiry for exactly one month, and set the exercise price as fridays closing price.
“You have idendified the problem with the strategy. You need someone on the other side of the trade. Who would purchase a call option with no intrinsic value for 3-6 % of the value of the shares. No one with any brains would.”
Doing this on BHP (using the ASX online option calculator) gives a 30.2c premium. This gives a 2.84% premium. Over 12 months thats 34%. 2.84% is just under 3%, so according to you there would never be an at the money call traded with a month to expiry. You stand corrected.
“Also if your option is exersized you will have to sell your shares at the relevant strike price. You may want to keep those shares and you will have no choice. If you have held the shares for some time and are holding a nice capital gain, it will of course be a CGT event.”
This is quite incorrect. You do not need to sell YOUR shares. You need to sell SOME shares IF you get exercised. If CGT was an issue you could simply buy more shares then sell them to the taker. This of course assumes that you do not hold calls at another strike, which you did not mention. Brokers are quite happy to lend the shares for this purpose, as the sell contract is done before the buy contract, and it gives them more brokerage.
And why they hell would you put yourself in that position in the first place?. In my course I highlight the dangers of being short an in-the-money call on the record date for a dividend (this is when 90% of exercisings take place). Quite simply, DONT be short on the record date and there is no problem. Simple. There needs to be a financial incentive for the taker to exercise. The time value of the option prevents this usually. The only other danger is when the option is deep in the money close to expiry. In that case, it would be wise to close out the option early. The negligable time value would not be a good enough reason to take the risk.
Perhaps Mr Crashy might like to table his trading statements to show these returns. As a person who has been trading options for something in the order of 25 years on the ASX it is often hard to deal at the theoritical prices quoted by the ASX.
Oh by the way I have forwarded my $ 295 in order to recieve the wisdom that is offered. If it is as good as it is promised to be the price will look like a very small investment.
Forumites, sharetraders bicker a lot, this is how we learn off each other. Only the emotionanally immature take it personally ok!
Crashy,
“Or is it the duck that sits?”
Sorry that went over my head[?]
“I could swear I have educated you about using closing prices of options before on hotcopper.”
Two points about this statement:
1/ I don’t go to hotcopper.
2/ Educate me!!!!!!!!!!! How sanctimonious! Who appointed you the guru?“DO NOT USING CLOSING PRICE AS VALUATION. THE LAST TRADED PRICE IS USUALLY OUTDATED AND IRRELEVANT. THEORETICAL PRICE SHOULD BE USED.”
Mate, as xyzzy has pointed out, the market decides the price of the option, not the ASX theoretical option price calculater. The last trade of NABWL on friday was 0.45, 20 contracts At 3:56 PM. This is about as current as it gets. The market has spoken, were you listening?
If anyone had tried to write NAB calls at the theoretical price on friday, the R.T.’s would have laughed there heads off.
“You waffle on about greeks as though they are some magical secret that only the elite know about, when the truth is they are largely useless because they are dynamic. Delta is the only one that is compulsary to know. The other two are mere trivia. I find it strange that you preach about the greeks yet you cant even value an option properly.”
Waffle? I mentioned them only. Show me where I have been preaching greeks???? Oh and by the way there are more than 3 greeks, better go back and check your textbooks son(my turn to be sanctimonious[}
]) I find it strange that you don’t consider theta important as this is is what is working in our favour in a written position. Delta is less important in a short option position. Perhaps it is you who needs more “education”. For some basic education on the FIVE option greeks, click on the link. http://www.asx.com.au/markets/l4/OptionGreeks_AM4.shtm“Secondly, you deliberately picked a stock with a low current Implied Volatility,”
Ahhh! Implied Volatility!!, excactly why theoretical values are BS…..And it is the reason why the stategy cannot return 3-6% every month.
“This is quite incorrect. You do not need to sell YOUR shares. You need to sell SOME shares IF you get exercised. If CGT was an issue you could simply buy more shares then sell them to the taker.”
You are correct on this point, however if you need to go into the market to buy shares because you written call has been assigned, it will of course be at a loss. Now we have to write a call in the next month just to break even (assuming the loss was equal to the premium recieved originally. Here is another reason the strategy cannot make 3-6% per month.
“This of course assumes that you do not hold calls at another strike, which you did not mention.”
Now we are talking bought calls as well? When did they come in the picture? I thought we were talking covered calls.
A little more about implied volatility:
Writing calls is, or should be a volatility based strategey….write them when iv is high….not every month for the sake of it.Finally, I’m with xyzzy….lets see some broker statements that show 40% p/a on covered calls. Until then there are other strategies I would much prefer to use.
Cheers
WayneWayne
My apologies
You said a few things which were very similar to things said by a guy nicknamed “sitting duck” on Hotcopper. My bad. Perhaps I have you confused with one of the other “crashy knockers” on this forum who carries a grudge from 5 years back.
One thing the “40% knockers” have not considered is the effect of small returns in small periods compounding to large returns over the year.
“Writing calls is, or should be a volatility based strategey….write them when iv is high….not every month for the sake of it.”
Well that would depend on your risk tolerance and cashflow needs. It is a good point to raise, sometimes you dont get much for your calls. Still, all those buy-writers out there cant be wrong. I think you are confusing investors with traders. I cant see an investor selling volatility for the sake of it. A buy-write is a risk REDUCING strategy, not a risk INCREASING strategy.
xyzzy,
You have heaps of experience. So please put this to rest. Is it possible to make over 40% p.a. CONSISTENLTY and PREDICTABLY?
OK you have been doing this for 25 years so it must be working for you, but is 40% realistic or is it more like 5% to 15% and some years 40%???
Cheers,
Pin
“Delta is the only one that is compulsary to know. “
*wonders* ummm, as in, Delta Goodrem?
*whooshing sound as this thread goes completely over my head*
…i tried, though….
Hey Mini
Me too! I thought I understood options until these guys started talking about them!!
Cheers
Mel
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