Yes I have heard of them. They do LO’s. Hmmm not to sure about the furniture package. They are thinking outside of the square though. I think as long as the purchasers can afford the repayments why not.

Exmaple – We buy a 2nd Mortgage (paper) for $20K yielding 15% which is $3000.00 pa. Now lets say we managed to pick the note up for $5K?? We are now making $3K on $5K or 60% + we get paid a our balloon payment in 5 years of $20K which = 300%

We could alternatively sell the note for $15K to an investor which would bring the yield up to 20%. We make a quick 200% profit.

Now I ask you this. How many of these can go wrong and we still make money?? It is all about managing risk.

Richmond, I should have said, I will be in control 50-100 properties.

Battz anyone can sign a contract. You may run into trouble though if you can’t flip it to someone b4 settlement.

You asked for it:-
Michael Marcus – Over a 10 Year period he multiplied his company account 2500 fold.

Bruce Kovner – In 1987 alone, he scored profits in excess of $300 million. Two thousand dollars invested with Kovner in early 1978 would be worth $1,000,000 ten years later.

Richard Dennis – Dennis bought a seat at an exchange for $1200 leaving him with a scant $400 left to trade with. He transformed that tiny stake into a fortune which is estimated by some to approach $200 million.

Paul Tudor Jones – In 1984 Paul had 1.5 million under management & by 1988 every $1000 invested was now worth $17,482. Not bad!!!

Ed Seykota – Completely unknown, not only to the public, but to most of the financial community as well, Ed Seykota’s achievements must certainly rank him as on of the best traders of our time.
Example. In mid 1988, one of his cutomer accounts, which started with $5,000 in 1972, was up over 250,000 percent. I know of know other trader who has matched this track record over the same time.

Quote – Ed Seykota was interviewed by Jack Schwagger.

Q – What are your thoughts about using fundamental analysis in trading?
A – Fundamentals that you read about are typically useless as the market has already discounted price, and I call them “funny mentals”. However, if you catch on early, before others believe, the you might have valuable “surprise-a-mentals”.

Q – Your answer is a bit faceticious. Does it imply you only use technical analysis??
A – I am primarily a trend trader with touches of hunches based on about 20 years of experience. In order of importance to me are 1. The long term trend 2. The current chart pattern, and 3. Picking a good spot to buy & sell. Those are the 3 primary components of my trading. Way down in very distant forth place are my fundamental ideas and, quite likely, they have cost me money.

Larry Hite
Michael Steinhardt
William O’Neil
David Ryan
Marty Schwartz
James Rogers
Mark Weinstein
Brian Gelber
Tom Baldwin
Tony Saliba
Van Tharp
Randy McKay
William Eckhardt
Al Weiss
Stanley Druckenmiller
Richard Drichaus
Gil Blake
Victor Sperandeo
Tom Basso
LInda Bradford Raschke
Mark Ritchie
Joe Ritchie
Blair Hull
Jeff Yass
Charles Faulkner
Robert Krausz

There you go just a few.

Warren Buffett does not sell the stock. He will only sell the stock if the fundamentals of the business have changed, not if the price has gone up.

Matt, I ask you this, what has happened to the price of the stock once you find out the fundamentals have changed?? The directors know b4 the public which means the price has already declined significantly eg. ENRON was still fundamentally O.K. until the collapse.

‘Warren Buffett did not just buy stocks. He was the majority share holder so he could go in and build the company that’s why he is so rich. Mum & dads & average investors that use this technique cannot be majority share holders.’

I still haven’t heard you name one successful fundamentalist share holder bar warren buffet.

We generate our income using options which return at present about 3% a month.It used to be as high as 6-7%/mth.

I don’t to be a stick in the mud, but a lot of wealth guru’s promote option writing as a no risk venture. I presume when you say you write options you are writing covered calls. My question is this – would you write a naked put option??

We will further this dicussion once the above has been answered.

Ez-rent you said that finding under-valued stocks & over valued stocks is key. Sorry but I must disagree. Sausage software was overvalued at 20cents. What did that end up trading at?? The underlying analysis of picking under-valued & over valued stocks is fundamental analysis which in my opinion does not work.

This is some of the reasons why:-
* John picks a stock to analyse it and decides it is undervalued. He puts an order in with your broker then buy stock XYZ for $1.00. The stock trades up to $1.20 in a matter of weeks. Now surely it is over-valued (How do you determine this, fundamental analysis). He sells. The stock is trading at $2.50 in 5 weeks time. Why doesn’t fundamental analysis work?? People don’t care about fundamentals all they care about is price & greed. Yes it may have been overvalued at 1.20 but people didn’t care it was still $1.20 in their minds, even if the PE is 40.

* Picking undervalued stocks – Why doesn’t this work?? People have an obsession with picking the next big winner, hence trying to pick market bottoms. What is the common mantra told by the various guru’s (Rene Rivkin)?? Buy Low, Sell High & you will make a killing!!

Let’s re visit the recent example of the purchase of stock xyz. He bought @ $1 and sold at $1.20 because it was “over-valued”. The market did not care what John thought because it traded way above that 5 weeks later. Now if we reverse the situation to buying under-valued stocks the thought process goes a little like this. This is common human behaviour and a reason why there are so many losers in the market. I will use a real example – AMP
AMP is trading @ $20.00. It drops to $10.00. The crowd – Gee Wiz it has halved in price it must now be a good buy, twice as good in fact, it was $15.00 last week. We all know what AMP is trading at today.

*A lot of market commentators were also recommending ENRON before its demise. What did the fundamentals look like?? I think the charts told a different story.

The moral of the story is price is primary.

Jesse Livermoore Quote – `Buy high, Sell Low’.
For those that don’t know, Jesse Livermoore was one of the most famous traders in the early 1900’s. He amassed millions.

What do most people do?? Try to Buy Low, Sell High. It would go againt the human grain to buy High Sell Low. Would it or would it not??
People also do not know how to manage risk.

I just thought of another reason why it doesn’t work – John spends days & days analysing stock ABC. He finally decides that the stock is under-valued and buy’s @ $10.00. 2 months goes by and the stock is now trading @ $8.00. What do most financial planners do?? Dollar cost average. By more of a losing stock because they are right they must be. This strategy does not work & is one of the many reasons financial advisors have no idea. ANother 3 months go by and the stock is now trading @ $5.00. He buys more!! This guy must be right and a sucker for punishment. The stock now must almost double to break even. People have an over tendency to be right. I ask people what would you rather, be right or rich. Unfortunately most people would prefer to be right. I know of very successful traders who are only right 40% of the time & make millions.
* Lesson you do not have to know what is going to happen next to make money.

* Another flaw of fundamental analysis is time it takes to analyse stocks this way. You cannot to broad searched of over 200 stocks using this method which means it not a very time effective tool.

Any way enough babbling and back to property talk.

Yet again I have not done a spell or grammer check so excuse those slippery typing fingers.

What an interesting topic and something I wouldn’t mind commenting as I have a good knowledge of both investing strategies. Please people I don’t mean to sound blunt but am trying to be as blunt, objective and truthful as possible.

Wayne – You say that the stockmarket has historically returned 13% PA over the last X years. You also say bring up a long term chart and see for your self.

If I bought up a chart of say the ASX 200 for the past 50 years, what would we see?? Yes we would see a chart that is trending up for 50 years. This charts however are very deceiving. Let me ask you another question. In 1987 which top 5 companies weighted heavily on the major AUS indexes. I think you will find that Bond group, Quintex and the like would have heavily weighted the index. I ask you another question – Where are those companies now?? An index is always goign to trend up because as companies start to under-perform the ASX removes them. The upward trending index however does give people a false sense of security that stocks always go up which is totally wrong and is foolish to beleive so.

NCP – From $27 – $12
TLS – From $9 – $5
and the list goes on & on.

Now if you were a believer that stocks always go up, you would now have to capture a 200% gain in NCP to breakeven and a 100% gain in TLS to breakeven. Now if you can tell me of an investment that can make those sought of returns please let me know.

The only way to make money in stocks is to have a firm grasp of money management, positions sizing and basic technical analysis skills. These 3 combined can be used to create an effective yet simple system, which will mean you wont get caught holding your TLS & NCP’s thinking that stock always rise.

AS for your comments crashy – These property gurus have no qualification. Mate well they do have 1 qualification – That is results. That is all I care about. I know hundred of people with diplomas/degrees in finance that don’t have a clue.

AS for leverage. Property sh-ts all over shares. Try raise money to invest in shares without the appropriate licences. Even better try and explain to your investors you methodolgy. People have no clue about share which means it is hard to borrow large amounts of funds. Most people have some understanding of property as it is less mystic which means it is a lot easier to raise funds. I have know diploma/degree but do have a track record and can raise infinite amount of money.

Another comment was made that 95% of traders fail. Yes that is true. Through lack of knowledge or natural human behaviour trading is one of the hardest endeavors one could try to suceed at.

That is all for now, but I am ready to for some counter arguments from anyone if you so dare. I meant that in most friendly way possible.

Happy Investing

Joke.
Question.
Why did god make so many economists??
Answer.
Because then at least one would be right.

Westan are you from AUs?? Whats forcing the move to NZ?? I am going over there in 6-8 weeks once my company & trust is set up over there. Have you got work organised over there?? I am thinking of moving over there myself. I wouldn’t mind having a chat if you have got the time.

My email is [email protected]