Forum Replies Created
Wayne is spot on. The psychology is extremely hard. Most books tell you stuff like “get disciplined, stupid!” but thats as far as they go. I studied a lot about discipline (because I was so bad at it) now I teach people how to be a disciplined trader. Its all in my course.
They are plain old aussies I have known for 5 years. While the return is good, it involves a lot of work, stress, sacrifice and risk.
They do it using leverage of some form, mostly CFD’s these days.
Its never consistent. You can make $50k one month then lose $10k a month for the next 4 months. I am assuming they play with $150k, we try not to involve dollar amounts, it inflates the ego which causes irresposible trading. I dont think I should name names.
I know plenty of traders who make around 100% a year. The trouble is that the profits pay the bills, they dont compound over time. My impression is that these guys are playing with around $150k on average.
A wise old man once told me:
“don’t offer me a problem son, offer me a solution”
lol
my cats get heckled by the birds around here, they will never catch one i think
Oh yeah, and QANTAS doesnt have target radars lol
Quite funny but sadly not from Qantas. Its actually from one of the smaller U.S airlines (the 200 feet should be a clue). I was sent this stuff bout 6 years ago. Been dying to read it again though….
from smh:
CommSec senior analyst Craig James said the tax advantages were significant and should attract a lot of shareholders.
“It’s certainly a lifeline for those who want to exit Telstra and move their stocks to other sectors of the market.”
Mr Heffernan said all shareholders would be able to secure “real benefits” from the tax advantages but shareholders falling into a high tax bracket should steer clear of the buyback unless they were making capital gains elsewhere.
“But it doesn’t matter if you are T1 or T2, if you are a low tax payer you will benefit from this buyback,” Mr Heffernan said.
He advised ordinary shareholders to accept the Telstra-nominated price.
I went to the Brisbane expo and was dissapointed. The highlight was a seminar by a guy from “ozdaq securities” who was the only one to point out the property bubble. More impressive was the fact that all of their advisors have a masters.
90% of the stands were property promoters of some sort. I will probably have a stand next year.
I have been so busy lately I dont get much chance to listen to music. I cant have it on while writing or studying either. Whenever I go in the car with the mrs now she starts singin to songs I have never even heard…..must be gettin old…
Thought I would share my 5 favorite CD’s of all time though:
1. Collective Soul – no title
2. Savage Garden – Affirmation
3. Pink Floyd – The Division Bell
4. Don Henly – Actual Miles (greatest hits)
5. Pet Shop Boys – Discography (greatest hits)Wayne
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.
Are these listed shares or private?
What is the dividend yield?
How much is the employee discount?
Why do you want to buy more?My view of the market for the next 5 years is very good. This does not mean all stocks will go up though.
bah
doogs is too modest
You should always consider the combined experience of all the share traders / investors here. Some pretend like they know it all though, so its hard to tell. As some have stated, they have 25 – 30 years experience. My expertise is in one area, that is positive gearing involving options and dividends. I studied hard to become an expert in this area, but this does not mean I know everything about every shares subject. You only need to check out a good bookstore to know there are a hundred different areas of expertise in equities.
Once you go outside the top 20 stocks, I know nothing. There are some here who are far more experienced in other areas, such as midcaps and specs. There are 4000 stocks on the ASX, I know only the top 20 or so.Hope this helps.
Until recently, unless you knew which specific shares to invest in, a managed fund was the only option for the average investor. With the introduction of index CFD’s, it is now possible to invest in any market or sector. Fund managers rarely outperform the benchmark index, in fact it is well known that 80% of fund managers under-perform the index. Fund managers are disadvantaged in numerous ways. Firstly, their fund is forced to be weighted similarly to the index. This in effect means they must buy what is going up, and sell what is going down. As a result they often buy the top and sell the bottom. Secondly, their large size means they must buy and sell large amounts. This volume affects the market, meaning they pay more when buying and get less when selling. The large volumes required mean they must trade in high cap liquid stocks, missing many opportunities in smaller, more volatile stocks.
lol
our ginger one is named tiger….with big floppy lions paws and stripes what choice did we have? lol
my cats compete to see who can find the biggest lizard. the female bought in a 2 foot long thing last week, it was not happy Jan.
I have 5 years experience running a chatroom for shares. I dont think a chatroom for property would work well. The share market is open 6 hours, so the bulk of conversation occurs during this period. The property investors are likely to chat after hours, which would make it hard to string together a conversation. From a social perspective it would be good. I would probably listen in if you do get one off the ground, and would be happy to support it.
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.
“Trusts don’t pay tax (unless it is not distributed).” Is that possible? I thought a trust had to distribute ALL profits. If so, what is the rate?
Thanks Terry, im glad someone finally answered.
I am getting a few requests to include structure info in my course, which is why I am researching it. Being a little known strategy it is probably a good idea.
So the main benefit is asset protection, I always thought it was tax minimisation. From what I have read today it seems most of the tax advantages are no longer. I guess the discretionary part would be useful, then again if you are trying to build a portfolio a company can withhold all or part profits to avoid the tax. That could be very useful to some people who dont need to draw out from the investment.
When you say “you could disribute $6000 each to yor 3 cousins” do they actually have to receive the money? I would assume it is not an act of generosity, what happens if they don’t want to hand over the money? Do people usually give the relatives a cut? Money and relatives not a good mix in my experience.
What I meant was, medicare is added to the final net assesable income, so until that point, calcs should be done using 30% or 47%……especially when franking credits are involved. Its a minor detail but affects calcs where franking credits offset income. No effective income = no medicare.
