List Why Property Beats Shares

What a great topic I have always loved arguements between 2 passionate people who think their way is the only right way.
Just for the arguement we have property and shares and we use our shares to generate our income as well as some buy and hold ones and our property to increase our asset base ie capital gain.We generate our income using options which return at present about 3% a month.It used to be as high as 6-7%/mth.
One more thing you say that property is always worth something but I remember seeing things on today tonight and ACA about being able to get land in some small towns for free because the owners couldnt sell it and they didnt want to pay rates anymore. Isnt the main thingis to do your due diligence in relation to any thing you buy. I am sure some people who bought into inner city appartments are sitting on a loss.

The other thing about most millionaires being property think of all the rich people who come to mind like rupert M. and kerry P. they own shares
who is the most prominent property ower in Aust?
Keep up the aurgument its great reading

Erika[]

Ive been to many property seminars and read many books on the topic. It is quite clear to me that the people holding the seminars and writing books all learn fom eachother and simply repeat or refrase what they have learnt, just like going to school and there id nothing wrong with that. If A+B=C They are not out there reinventing the wheel. There are proven strategies out there which can and have worked. If i was a dynamic speaker, and spent the time and money, i could probably put together a powerful seminar to blow the minds of the average person where they would be ready to sign up for any course. These seminars and courses are obviously a large part of the income stream for these people and without that income, id like to see how many properties they would actually have just by investing alone.

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G’day Crashy,

It appears you have a wealth of Knowledge on the Share Market, and I must admit my knowledge base is very limited and I’d been keen to do a course to give me a better unerstanding of the market.

I visited your website, but was surprised by the highly critical views you have of property and those whom conduct seminars to pass on their knowledge….

” These people have no formal qualifications, and usually everything they say is a lie.”

Pretty harsh words, do you have any evidene to support this claim? If so I’d be interested to hear it, as I certainly dont want to waste my $1000 – $2500 to attend a property course if its full of lies.

and secondly…

” I could market positive geared strategies for property, it would be a lot easier to sell. If I did that though, I could guarantee that all of my students would either lose money or not be able to use the knowledge.”

You believe that all your students would actually lose money on property investments??

How can so many property investors be getting it wrong?

Just a thought……

Cheers,

Battz

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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.

Hi Guys,

Being sorta new to investing in general, hense the “newbie” status, I think the key to any investing strategy is Education. My main motivation for starting my investment portfolio in property was the comfort that;
“Even though property can go up and go down, it can never actually become worth Zero.
In the future I intend to examine share investing as to balance the whole portfolio but with a great deal of education in between.
Traci.

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.

I dont really care for the fundamental or technical arguments. I have studied both extensively and find problems with both. They should complement each other, not compete against each other.

“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??”

Option writing is certainly not risk free. However, a buy-write or covered call is LESS risky than simply buying the equivalent amount of stock. Since a written put is very similar risk wise to a buy-write (dividends and franking credits aside), it is common for traders to wrongly catergorise put writing as extremely dangerous, when of course it is not. It carries LESS risk than buying the stock outright, because the losses start from the strike price and not the current stock price. It is the same risk any share investor takes when they buy stocks.

Put writing can be an effective way of buying stock at a discount as I have already shown. Yes, some foolish traders go nuts with the leverage and get blown up, but thats not the options fault.

To me, buying shares and not writing calls against them is like investing in land. Sure, you might get capital growth, but look at the rental income you are missing!

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Put writing can be an effective way of buying stock at a discount as I have already shown. Yes, some foolish traders go nuts with the leverage and get blown up, but thats not the options fault.

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Ahem, you are not in fact buying the stock at a discount if your written put is exersized. Not withstanding the premium income recieved, You are buying at the CURRENT MARKET PRICE OR ABOVE

In fact the price you are obligated to pay may be at a substantial premium to the current market price, if there has been some sort of price shock, as has happened with AMP recently.

Nothing wrong with writing puts if it matches your experience and risk profile, but selling the strategy as buying shares at a discount is erroneous.

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Ah c’mon Fullout! what wrong with a good old fashioned dust-up?

It certainly exposes some myths, prejudices and BS. (doesn’t seem to change many peoples mind though; hmmmmmmmmmm)

But for those who listen and learn, its been a good debate. I’ve certainly picked up some useful points about property that I had not thought of.

Cheers
Wayne

http://netvantage.netfirms.com

Hi guys,

I’d just like to add my 10c worth.[]

I agree with Battz71. I too got hooked on real estate investing after reading Dolf de Roos’s book “Real Estate Riches” which defines in my humble view the basic reason why real estate is better than shares.

So there…[]

Karl

The future belongs to those who believe in the beauty of their dreams. – Eleanor Roosevelt