21st Century Investor

[foofighta]

Hi I have recently come across the http://www.21stcenturyinvestor.com.au website. I was just wondering is there anyone out there in ASF that uses these guys?
They make claims like these on on there home page

"WHAT IF YOU COULD BUY SHARES THAT ARE TRADING ON THE ASX AT 57 CENTS FOR ONLY 45 CENTS, AND DO IT MONTH AFTER MONTH"*

HOW MANY WOULD YOU BUY? IF YOU PURCHASED $45,000 WORTH OF THEM YOU'D BE SITTING ON $12,000 IN INSTANT PROFIT. WHAT IF YOU DID THAT EVERY MONTH, $12,000 A MONTH ON LESS THAN $50,000 OUTLAY.

Really just interested in anyone's views on this......

 

[RichKid]

Hi I have recently come across the http://www.21stcenturyinvestor.com.au website. I was just wondering is there anyone out there in ASF that uses these guys?
They make claims like these on on there home page

"WHAT IF YOU COULD BUY SHARES THAT ARE TRADING ON THE ASX AT 57 CENTS FOR ONLY 45 CENTS, AND DO IT MONTH AFTER MONTH"*

HOW MANY WOULD YOU BUY? IF YOU PURCHASED $45,000 WORTH OF THEM YOU'D BE SITTING ON $12,000 IN INSTANT PROFIT. WHAT IF YOU DID THAT EVERY MONTH, $12,000 A MONTH ON LESS THAN $50,000 OUTLAY.

Really just interested in anyone's views on this......

Sounds like trash to me, if only it was that easy you could just follow free ASX co announcements for capital raisings and the like. If this strategy had a reasonable chance of establishing a profitable track record I'd say it would only be in a bull market. Watch out for the conditions too if you're crazy enough to fork out money for this. Will be good to see who is behind the site:

For monthly subscription $99/month recurring charges will apply for the next 12 months. If you want to cancel you can only close after the 12 months and you must give 30 days written notice after the 12 months

For Yearly subscription $990/per year recurring charges will apply for the first year then $99 per month thereafter. If you wish to cancel, you must give a 30 days written notice at the end of the 12 months.Subscription fee is non refundable.

 

[sails]

Hi I have recently come across the http://www.21stcenturyinvestor.com.au website. I was just wondering is there anyone out there in ASF that uses these guys?
They make claims like these on on there home page

"WHAT IF YOU COULD BUY SHARES THAT ARE TRADING ON THE ASX AT 57 CENTS FOR ONLY 45 CENTS, AND DO IT MONTH AFTER MONTH"*

HOW MANY WOULD YOU BUY? IF YOU PURCHASED $45,000 WORTH OF THEM YOU'D BE SITTING ON $12,000 IN INSTANT PROFIT. WHAT IF YOU DID THAT EVERY MONTH, $12,000 A MONTH ON LESS THAN $50,000 OUTLAY.

Really just interested in anyone's views on this......

Let me explain how that is done - and where the risks are that they don't seem to mention...

Using that example, you would sell 100 x 45c strike put options for 12c (quantity of 100 is based on 1000 shares per each option contract).

If the market goes sideways or goes up, you keep the $12,000.

If the market goes up strongly, your profits are still capped at $12,000.

If the market goes down below 45c at option expiry, you will most likely be assigned and have to buy the shares. If the market continues to go down, you are losing money.

If this 57c stock went bankrupt, your max loss would be 45c (or $45,000).

If you wanted to own the shares anyway, it can work OK to acquire them in this manner and is very similar to the covered call strategy which, IMO works best on shares you already own. But as a stand alone strategy, it carries a lot of risk - and these types of educators seem to gloss over by keeping prospective customers focused on the lucrative returns. They make it sound like it's guaranteed money each month.

Oh, if only options were as easy as they promote

 

[wayneL]

Hi I have recently come across the http://www.21stcenturyinvestor.com.au website. I was just wondering is there anyone out there in ASF that uses these guys?
They make claims like these on on there home page

"WHAT IF YOU COULD BUY SHARES THAT ARE TRADING ON THE ASX AT 57 CENTS FOR ONLY 45 CENTS, AND DO IT MONTH AFTER MONTH"*

HOW MANY WOULD YOU BUY? IF YOU PURCHASED $45,000 WORTH OF THEM YOU'D BE SITTING ON $12,000 IN INSTANT PROFIT. WHAT IF YOU DID THAT EVERY MONTH, $12,000 A MONTH ON LESS THAN $50,000 OUTLAY.

Really just interested in anyone's views on this......

Oh Lord!!

These guys really should give themselves an uppercut.

That is the most dishonest, most bullsh!t spiel I have ever seen. Where the hell is ASIC?

 

[wayneL]

From this charlatan's site:

Firstly ASX listed companies are often wanting to raise further capital and to do so quickly they will offer share placements in there stock to certain brokers or capital raising companies to offer to their select client lists, shares well below market value i.e. like the example above of a share trading at 57 cents available via private placement at only 45 cents.*

So by ASX listed companies offering a limited amount of shares at substantial discounts they can quickly and quietly raise further capital and selected investors can quietly profit from such transactions. An example might be a small Resource / mining company that has recently hit a favorable valuable deposit of gold. The opportunity cost of putting forward the proposal to the Banks is not viable whilst prices are high. That’s where capital raising can profit shareholders instead of banks.

The inference here is that the 21centuryBC investors are able to get a secret deal... on the quiet without the market knowing.

LOL

Firstly, it would be illegal for the company to not disclose it to the public.

Secondly, such a deal dilutes the value per share by the number of new shares issued. The share price WILL fall from such an action.

The share price *may* eventually recover, but equally, it may not and result in a net loss. Some of these deals are OK, but many are rubbish.

Thirdly, anyone who believes they can pull this off 10 times a year by turning over the same capital is in wonderland.

Methinks this is fishing for a queue of suckers for dodgy placements.

IMO.

 

[cuttlefish]

Methinks this is fishing for a queue of suckers for dodgy placements.

IMO.

I think you may well have hit the nail on the head there.

 

[sails]

I just assumed it was Jamie McIntyre flogging put selling again and didn't read the link...

But this is no better than the scenario I outlined earlier as the investor still carries ALL the downside the risk. And worse still, you can't use your own broker AND you have to pay a monthly subscription on top. Agree, it sounds awful dodgy.

When I first started options trading with covered calls a few years ago, it was with a seminar company and you had to use their broker. The first purchase of shares was charged at 1%. eg. for each $100,000 in shares = $1000 in brokerage . Total ripoff... You would really want to know if the fees are excessive, IMO.

Perhaps my imagination has become too vivid, but having been caught out a few times, now try to remember to tune into WIIFT (What's in it for them).

One possibility of WIIFT could be that some entity is selling puts on these high risk small companies and then shorting the shares by selling them to the public. Of course, they not only receive the put premium but also are paid for the shares and receive interest on those funds AND they are fully protected on the downside.

The risk would all be on the upside (opposite of the covered call). Suppose this was done on just one small company and there were enough investors to buy the shares. The person/s behind this scheme could potentially have the funds to drive the share price down and effectively remove upside risk in their account.

Just a thought and if so, very dodgy indeed. Hopefully ASIC will look into it...

 

[foofighta]

Thanks Richkid, wayne L, cuttlefish and sails for your thoughts. I had assumed as much given they are linked to Jamie and the 21st Century Academy.
I am very new to the markets and just trying to investigate every avenue possible before I decide on what suits me best.
How did you decide? And do you have any courses/books/software you would recommend for a novice?

How do these guys get away with it??? There must be regulations that prohibit these spruikers!!!

 

[Santob]

And their grammar is pathetic.

 

[prawn_86]

every avenue possible before I decide on what suits me best.
How did you decide? And do you have any courses/books/software you would recommend for a novice?

Warbs,

I suggest you troll through the Beginners Lounge. There is a heap of advice and free info in there. An excellent starting place for newbies.

Welcome to ASF

 

[The Mint Man]

Oh Lord!!

These guys really should give themselves an uppercut.

That is the most dishonest, most bullsh!t spiel I have ever seen. Where the hell is ASIC?

A simple search of Jamie Mcintyre on Yahoo! will get you this:
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/07-215%20ASIC%20finalises%20proceedings%20with%20Jamie%20McIntyre?opendocument

ASIC finalises proceedings with Jamie McIntyre​

Friday 10 August 2007

ASIC and Mr Jamie Neville McIntyre have resolved proceedings, commenced by ASIC in the Supreme Court of Queensland in 2002.

The proceedings related to alleged breaches of the Corporations Act by Mr McIntyre concerning a wealth creation business carried on under the name ‘21st Century Academy’ and Mr McIntyre’s management, as sole director, of the following companies: Visual Changes Pty Ltd (Visual), Cashflow Creation Pty Ltd, JNMAC Pty Ltd, JNMAC2 Pty Ltd and Jaymac Communications Aust No 2 Pty Ltd (the McIntyre companies). Some of the McIntyre companies were involved in the 21st Century Academy business. The McIntyre companies were wound up in 2002 and 2003, following applications made by ASIC (see ASIC media releases 02/115, 02/185, 02/190 and 03/124).

In the proceedings against Mr McIntyre, ASIC sought:

· declarations of contraventions of civil penalty provisions of the Act;
· the imposition of a pecuniary penalty order in relation to those contraventions;
· an order that Mr McIntyre pay compensation to Visual, being money borrowed by Visual from investors (at the behest of Mr McIntyre); and
· an order that Mr McIntyre be disqualified from managing a corporation.

ASIC has agreed to discontinue the proceedings in consideration of Mr McIntyre undertaking to repay investors who lent money to Visual, enrolling in and completing a company director’s course with the Australian Institute of Company Directors and, contributing to the outstanding fees of the liquidator of the McIntyre companies.

As a result of the discontinuance of the proceedings, restrictions relating to Mr McIntyre’s ability to deal with his assets and travel overseas have been discharged.

Cheers

 

[foofighta]

Thanks prawn and mint man

I never realised this bloke was so bad!!

WTF - How is he still operating?

Cheers, will check out the beginners area

 

[The Mint Man]

I'm not saying he is bad Just stating the facts and/or providing the information which is freely available.
I have actually seen this guy in action (someone I know has the DVDs etc.)
What I will say is that some of his strategies will and do work well, for example Covered calls have worked well on a fair few shares lately and you could have made very good money doing it but the annoying thing about him is the way he presents it, making it sound so easy (which to some people it is) but some of these people have no knowledge of shares at all. This could be dangerous..... which is why he will recommend his brokers etc to these people.
The other thing I have a big problem with is the price he is asking for these seminars, quite expensive.
Also he goes on and on and on and on and..... you get the picture.... out of say 12 DVDs there might be a couple with good info but 90% of those good bits are presented by other people which he pays to come in. eg; the tax and structure guys, guys from JP Morgan, property 'gurus' etc.

I could go on forever about the pros and cons but hey, each to their own.

Cheers

 

[wayneL]

I'm not saying he is bad
What I will say is that some of his strategies will and do work well, for example Covered calls have worked well on a fair few shares lately and you could have made very good money doing it but the annoying thing about him is the way he presents it, making it sound so easy (which to some people it is) but some of these people have no knowledge of shares at all. This could be dangerous..... which is why he will recommend his brokers etc to these people.
The other thing I have a big problem with is the price he is asking for these seminars, quite expensive.
Also he goes on and on and on and on and..... you get the picture.... out of say 12 DVDs there might be a couple with good info but 90% of those good bits are presented by other people which he pays to come in. eg; the tax and structure guys, guys from JP Morgan, property 'gurus' etc.

I could go on forever about the pros and cons but hey, each to their own.

Cheers

Yep, everything works in the right situation.

As you say, it's how it is presented and the representations of returns... or rather, the misrepresentation of returns.

Add to that, the active discouragement of "pupils" learning more in depth about options.

Very dangerous man.

 

[The Mint Man]

Hey Wayne,
Champion name that
Just curious as to where you learnt options and how long it took you to master?
I'm only 25 and just started dabbling in covered calls so it would be good to get a bit of advice.

Cheers

 

[wayneL]

Hey Wayne,
Champion name that
Just curious as to where you learnt options and how long it took you to master?
I'm only 25 and just started dabbling in covered calls so it would be good to get a bit of advice.

Cheers

After reading some of the more popular and useless books, I started, (with a small second account thankfully), like many, with the preposterous idea that they were all about leverage... and promptly had my @rse handed to me. LOL

Decided I had better find out how I got screwed and read better books and learnt about the greeks/volatility etc.

Light bulb moment, errr smoldering ember that eventually turned to light, was being in the same chat room as Charles Cottle for a few days. That alerted to me how I needed to think.

But I think for me, the best learning tool was the Hoadley Strategy Modeler. I took what I was reading and what Cottle was talking about and fiddled for hours to visualize what they were saying. I'm no mathematician, so the visual representation really helped.

Not being afraid to question "gurus" is another great way to learn. You would be amazed how much BS is out there. Even if you get hammered in an argument, you learn something valuable. The guru sometimes learns something too, though they'll never admit it LOL

As to how long to master. I'm no master, more of a journeyman, but I think that varies. Really mathematically minded young people seem to pick it up pretty quickly, a few months. Brain damaged old farts like me take a bit longer, but the right thinking can speed it up heaps. Tough question really... and it depends a lot what you're trying to achieve.

If you want to do nothing but covered calls on a long term portfolio, not a lot of time at all (but still important to understand what it's all about, because there is just so much BS about covered calls out there), the whole enchilada takes longer. I'm still learning stuff all the time.

 

[sails]

...But I think for me, the best learning tool was the Hoadley Strategy Modeler. I took what I was reading and what Cottle was talking about and fiddled for hours to visualize what they were saying. I'm no mathematician, so the visual representation really helped...

:iagree: Countless hours working with Hoadley's Strategy Modeler. Back testing, forward testing, live trading ideas with small quantities took up many more hours. It is a lot of work for sure. I am no mathematician either - letting software do the difficult mathematical work.

I guess I also had to learn my risk tolerance. Some traders love their monthly iron condors, but I know my emotional tolerance is stretched if the short strikes become threatened. Prefer to work with strategies that make money when the IC people are getting worried. I like calendar and butterfly type positions (depends on IV) with some extra "wings" as I call them and have put in a lot of work on adjustments as the market moves. The aim is to lose little if the market stays sideways, but lock in gains as it swings.

But that said, I'm not trading much at all atm - family needs are taking up a lot of time - hope to get back to trading soon.

 

[wayneL]

:iagree: Countless hours working with Hoadley's Strategy Modeler. Back testing, forward testing, live trading ideas with small quantities took up many more hours. It is a lot of work for sure. I am no mathematician either - letting software do the difficult mathematical work.

I guess I also had to learn my risk tolerance. Some traders love their monthly iron condors, but I know my emotional tolerance is stretched if the short strikes become threatened. Prefer to work with strategies that make money when the IC people are getting worried. (Which is a lot lately ) I like calendar and butterfly type positions (depends on IV) with some extra "wings" as I call them and have put in a lot of work on adjustments as the market moves. The aim is to lose little if the market stays sideways, but lock in gains as it swings.

But that said, I'm not trading much at all atm - family needs are taking up a lot of time - hope to get back to trading soon.

Yep, Condors and credit spreads can develop a lot of delta as those short strikes get threatened... not pleasant. Hedging it off can be good, but of course it requires a lot of activity, which is anathema to the philosophy of credit spreading.

There are times for strategies and now is not a time for condors IMO... although I have managed to morph myself into one at the moment ... and it is causing me to be very active in smacking down delta.

Which is why I hate clowns that sell single strategies like AD.

So you like short butterfly type risk profile.. if I'm hearing you right? i.e. short strikes on the wings?

 

[sails]

...
So you like short butterfly type risk profile.. if I'm hearing you right? i.e. short strikes on the wings?

Yes - short strikes on the wings. Sometimes entered as long flies to start, then buying a further OTM IC later. When completed with the IC, it's synthetically the same as short flies - just means paying up front instead of having margin for the same creature (outlay/risk is the same). If the market stays sideways, the position doesn't usually lose much at all (might even make a little) - provided it is not left until the end of the trading day at expiration.

As vega is heavy on short flies, one way to balance it out is to add long flies into next month. Depending on the width of strikes used, the front month position usually has enough in it to protect the back month.

Obviously there's no free money, and the key to making money here is in the adjustments - eg locking in the profitable parts of spreads as the market moves. Still working on adjustments - and trying to work out how I can trade the US without sitting up all night. Had some good months while trading in Oz even though I was trialling these systems and made many mistakes along the way, but fees and charges pretty much ate the profits I did make.

I started this with double & triple calendars some months ago in BHP (Oz). With calendars, I didn't cap the wings with shorts as there is a higher investment to protect - but that extra ratio of longs adds heavily to vega exposure, so IV conditions must be suitable and did not provide for the continuous monthly income I had originally hoped for.

I have found ex-market maker Michael Catolico's (various Yahoo groups) adjustment ideas interesting as he adjusts as the markets move. I prefer this idea to trying to "guess" where the market might go next and this has had an influence in working with some of the above techniques.

Only switched to flies due to heavily increased IV levels and didn't want such high vega exposure on the calendars in the event IV should fall significantly.

Like you said earlier, options trading is a journey and I certainly still have lots to learn.

 

[sails]

One other thing I often used to help the learning process was the Hoadley Strategy modeller's ability to overlay two strategies. Still use it to some extent as TOS software analyze page doesn't have that facility - at this stage anyway.