Daniel Kertcher/Trading Pursuits - Serious or Scam?

[thotri]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

and you have to purchase MarketAnalyst software for $888 per year because it has the calculator for the covered calls so you can see the return you are getting. They also forgot to tell us about that……

Thank you for this very useful review. I'm currently considering this course and am actually quite surprised that you HAVE TO purchase the MarketAnalyst tool. You would think that you can calculate the returns yourself.

What happens if you don't pay the $888 per year - don't they give you access to the website?

Cheers

 

[1337trader]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Thanks for the review. Earlier when I started, I got sucked into one of those couple of grand courses too(not Kertcher one but it's similar). Basically any company that gives you a 2hour "educational event" for "free" at some fancy hotel meeting room are to be avoided. I learnt very little from the course, but at least had the costly lesson of staying far from this guys.

Later I did a course with someone who dosn't hold seminars or advertise everywhere, only mentors personally and I've been trading positively ever since.

I won't post who I did it with or this may be considered advertising/promotional/spam so please don't ask.

 

[superpom]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Hi

A big thank you to Matteo. I did the Daniel Kertcher introductory this week.I have been trading ASX options for several years so found most of the 2 hrs pretty basic but when he brought together the CFD/Covered call/Guaranteed stop loss, I was quite enthused.
The current price of the 3 day seminar is $3990 which I thought a bit steep but before I committed I decided to do a bit more research and found this forum.
If he had been totally up front I may have well signed up but to find out that he trades without a guaranteed stop loss which was one of the main planks in his strategy decided me against it.He also said that a $20k starting bank would give a fair return.
Thanks again for saving me a few thousand.

 

[Zorbaletto]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Sorry to be so longwinded, but hopefully this may help someone make an informed decision before deciding to attend the course. Cheers.

Thank you SO much for taking the time to give us your thoughts on the Daniel Kertcher training. We went to the 2 hour seminar yesterday and signed up to do the course….after googling him, and then reading your entry here, we are going to exercise the 7-day cooling off period and not part with $3990 (plus $600 for partner to come) to do the course.

We are not experienced traders - I have a few shares that I've had for ages…waiting for them to go up…and that's about it. So I don't think that his course would be good for us to do after reading your comments. I work in PR and deal with words, not numbers! I'm no good at this sort of thing and thought initially that doing a training course would be useful. Doesn't even sound very profitable unless you take risks and not use guaranteed stops, or have a large bank to invest with… hardly worth it!

Despite some other inconsiderate types that replied to your post, I can tell you that it was worth doing! You have helped one person - so thank YOU!

(I had to go to the effort to register in order to post a comment to say thanks! Why can't guests just comment??)

 

[measey]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Thanks Matteo,

I also went to the 2 hour seminar tonight. Your information helped me a lot, and it was very detailed.

It's amazing how much these guys want to charge for this information, as good as it sounds.

Cheers !!

- M

 

[jyavenard]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

I attended the free seminar yesterday out of curiosity.

he is a very good salesman that's for sure.

At no time did he suggest not to use the guaranteed stop loss and its cost was included in the net profit calculation.

The cost for the guaranteed stop loss was 0.3%..

The figured showed an average *net* return over the past 12 months of 8.5% per month. Sounds amazing ...

Covered calls with CFDs he said was a strategy that has only been possible for one year; is available only through one broker and that's if you go through him.

I talked to a guy there who had been trading following this strategy since January (not part of the whole shebang, genuine guy) and he confirmed similar returns on his $20,000 bank.

So is it really too good to be true? Can we see such kind of return with very good stop loss using covered calls with CFDs?

Thanks
JY

 

[wayneL]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

I attended the free seminar yesterday out of curiosity.

he is a very good salesman that's for sure.

At no time did he suggest not to use the guaranteed stop loss and its cost was included in the net profit calculation.

The cost for the guaranteed stop loss was 0.3%..

The figured showed an average *net* return over the past 12 months of 8.5% per month. Sounds amazing ...

Covered calls with CFDs he said was a strategy that has only been possible for one year; is available only through one broker and that's if you go through him.

I talked to a guy there who had been trading following this strategy since January (not part of the whole shebang, genuine guy) and he confirmed similar returns on his $20,000 bank.

So is it really too good to be true? Can we see such kind of return with very good stop loss using covered calls with CFDs?

Thanks
JY

It's just a variation on the 4% per month covered call claim, only leveraged.

Everything works really well... until it doesn't.

The other variation on this theme is credit spreads.

There is nothing "inherently" wrong with the strategy providing you have your risk/reward/probabilities worked out. The probability part is the crunch in all these income collection strategies.

It may be a cliche', but you are picking up pennies in front of a steam roller.

The guaranteed stop is a false sense of security and you need to understand vega and delta properly as well as theta to understand why.

 

[DanielKertcher]

Response to “Matteo” post on Aussie Stock Forums

I've read the post by Matteo about the Trading Pursuits TradeAbility Income course presented by myself, Daniel Kertcher.

I'd like to respond to his post. I thank Matteo for his feedback, and I’m sorry that he feels some things were misrepresented in my presentation (although he says he doesn't regret doing my course, is trading profitably due to the information we taught him, and had already made back a fair bit of the course costs).

I think his criticisms of the preview presentation and the course fall more into the category of misunderstandings than misrepresentations, as I will seek to explain now… Please note that I teach the entire strategy over 3 days, and there is only so much you can communicate of it in the free 2 hour seminar.

1. Minimum number of options contracts and Brokerage costs

Matteo states that the strategy requires a minimum of 8 options contracts and 800 CFDs to be traded per trade. This is not true.

There is no minimum number of options contracts for Trading Pursuits clients on the options. There is for other clients using the broker and that minimum number is 5 contracts.

So where does this comment from Matteo come from? In the average returns we report to clients, we do make some assumptions that try to be representative of the average client account. Clients’ actual returns will vary based on how they choose to trade, according to their own risk management decisions.

It is completely common and necessary to report average historical returns based on assumptions about what an average client is likely to do. In our assumptions we use 8 contracts as the basis. That’s because some clients have large sums to invest, and some don't, and we estimate 8 contracts represents a typical account.

Matteo also says that if you trade less than that the brokerage commissions eat up the returns.

As explained in the preview seminar, there are costs for brokerage. These costs were clearly listed, as $0.02 per share for the CFD, $0.05 per share for the options, LIBOR + 2.5% for the interest and 0.3% of the value of the shares for the guaranteed stop loss. There is a minimum of $15 per transaction on the share CFDs.

It’s true that because of the minimum $15 per transaction fee on the CFDs, it is more cost effective in terms of brokerage to do more than one options contract and 100 shares per trade. However, I don’t think most people would view a $15 fee as a major obstacle to their investing success.

2. The Volatility of the Market

Matteo says that a more realistic expectation of returns from this strategy would be about 5% per month, or 60% per annum. I agree with that, and I did state that the volatility levels we were seeing at the time were unlikely to continue.

I don’t have a crystal ball, and I don’t promise anything about the future. But I do show my clients what we are doing in the markets every month, and we put our money where our mouth is – every trade we report on has our own real money riding on it.

5% per month is close to the average we have achieved over the last 12 months. As for what the future holds, it could be better or worse. It’s hard to say because past returns are not indicative of future performance.

The market volatility changes throughout the year. I explained how during periods of higher volatility, the option premiums are greater, hence the returns are greater. We saw that recently in fact. With the increased volatility due to the Japanese disaster, the option premiums increased substantially. With the realisation that the Nuclear threat was no longer as great, the market volatility subsided, as did the option premiums.

What this means is that throughout the year as we write options, some months will provide greater returns than other months.

Also, as you learn how to write options, you will see that you can choose which strike price you write. Writing a higher strike price for covered calls will result in greater returns, at the expense of greater risk. In our Monthly Income Report, we show which trades that we ourselves are writing. We always take a very conservative approach, as we have more than 1,500 people reading that report every month.

You however, may choose to write a higher strike price if you are comfortable with the strategy and the risk. Everyone has a different risk/reward appetite. In the course, I teach how the strategy works, and how you can, based on your experience, choose to alter your risk/reward profile with the strategy.

In our reports, we do not tell our clients what to do. We tell them what we are doing. It is our job to explain to clients exactly how it all works, how they can choose their own risk/reward profile, and then show them exactly what we are doing.

3. The Cash Required to Trade

The stock prices on the CFDs we trade are not typically valued at over $100. The average stock price on trades we did for the 12 months from May 2010 to April 2011 was actually about $62. Sure some of them can be $100, or maybe even a bit more, but that is not typical. Many are less than the average of $62.

Matteo correctly calculates that with options at 100 shares per contract, 8 options contracts would mean buying 800 CFDs to cover the options. But as I mentioned before, it’s not necessary to trade 8 contracts – it’s possible just to trade 1 contract. Matteo then comments that at a 10% CFD margin requirement on shares, at $120 per share this would require a margin amount of $9,600. When in fact, the true average of $62 per share would require a margin amount of just $620 for one contract and 100 shares (and it is possible for our clients to trade just one contract). For greater numbers of contracts, the average of $62 per share would require $3,100 in margin for 5 contracts and $6,200 for 10 contracts.

Then Matteo gets on to the point about diversification. If trading one contract per trade, the average $62 per share would allow diversification across 10 different trades for about $6,200 margin.

But, in reality, we don’t always trade 10 different positions. Our average each month is more like 5 or 6 different trades. So, only an average of between $3,100 to $3,720 in margin would be required to diversify across trades each month. Note that I speak in averages here – it will of course vary from month to month depending on the actual share prices and the number of different trades.

In my preview seminar, I did explain that it is important when starting out not to engage all of your capital on the trades. I stated that we suggest a maximum of 40% of total trading capital be engaged on the CFDs.

That’s just what we suggest as a maximum. Some people do more than that, some less, based on their own risk profiles. It’s not our job to make investment decisions for our clients – we just teach the strategy, explain the risks and potential rewards, and then the client, armed with that information, needs to make their own decisions. Our online report of all the trades we are doing can assist in making those decisions.

If an average month requires no more than $3,100 in margin, and that represents no more than 40% of the total account, the total account value would be $7,750. In the FAQs on our website we suggest that $10K to $20K would be needed to trade this strategy effectively. It could be done with less if the client chose not to trade every trade we report on. This would not necessarily affect returns, but it would mean slightly greater risk due to less diversification. I would say certainly an account of no less than $5K would be necessary… and if you don’t have that, and the course fee is a struggle, then you are probably not in a position to be investing this way. As Matteo states, it's designed to be a long term strategy – you learn it once, and as your savings and income grow, so could your account.

4. Guaranteed Stop losses

In the preview seminar, I explained how guaranteed stop losses come at a price (0.3% of the value of the shares). I ask the audience who would be prepared to give up some of their profit in order to have the guarantee of the stop loss. The audience usually unanimously agrees that they would. That's understandable, given they have just learned the strategy and that they want to protect their downside risk.

At the course I explain how once you understand the strategy in its entirety you may not feel the need to engage a guaranteed stop. At Trading Pursuits we only use guaranteed stops sometimes, but we do use them when we feel the downside risk level warrants it.

I also explained that the guaranteed stop is only better than a regular stop if the stock gaps over the stop loss. Considering that we use many different risk management techniques together in concert with each other, including diversification, money management, writing the options deep in the money, engaging only a portion of our capital, etc., then the cost of the guaranteed stop loss in the context of the actual risk can sometimes be an overkill.

When the market is more volatile, the returns are higher but the downside risk is also greater, and it makes more sense to use the guaranteed stop loss – partly because we can afford to as we receive more income, and partly because the markets are more volatile and the risks are greater.

5. Market Analyst

The Market Analyst software is not included in the cost of the course, that's true - it's an optional purchase. People may already have charting software and may not want or need the more advanced features of this software. Calculating trade profitability for this strategy is not complex and does not require specialised software. We now have a calculator in our report to help clients identify if the trade is worth entering at the time they are looking at it, so it is not necessary to buy Market Analyst in order to calculate the profit potential of a trade.

Regards,
Daniel

 

[skyQuake]

Re: Response to “Matteo” post on Aussie Stock Forums

Matteo says that a more realistic expectation of returns from this strategy would be about 5% per month, or 60% per annum. I agree with that, and I did state that the volatility levels we were seeing at the time were unlikely to continue.

I don’t have a crystal ball, and I don’t promise anything about the future. But I do show my clients what we are doing in the markets every month, and we put our money where our mouth is – every trade we report on has our own real money riding on it.

5% per month is close to the average we have achieved over the last 12 months. As for what the future holds, it could be better or worse. It’s hard to say because past returns are not indicative of future performance.

60% pa for roughly how many years? If you have a decent track record for a few years why are you selling this to retail rather than insto?

 

[wayneL]

Re: Response to “Matteo” post on Aussie Stock Forums

...Regards,
Daniel

Daniel

Regarding the average 5% per month profit;

1/ What is the the profit on? Capital employed of all available capital.

2/ Can you reasonably prove this to be a fair representation of your returns?

3/ Do you use a timing model for entries or just expiry to expiry?

 

[IFocus]

Re: Response to “Matteo” post on Aussie Stock Forums

60% pa for roughly how many years? If you have a decent track record for a few years why are you selling this to retail rather than insto?

I would like to see ASIC to audit those claims.............

 

[jyavenard]

Re: Response to “Matteo” post on Aussie Stock Forums

Daniel

Regarding the average 5% per month profit;

1/ What is the the profit on? Capital employed of all available capital.

This was answered during the 2hours preview: it is of the amount actually invested; not your bank (so say on 40% of the capital employed)

2/ Can you reasonably prove this to be a fair representation of your returns?

This was provided with details over the past 12 months transactions. Their returned averaged 8.5% IRC..

 

[sails]

Re: Response to “Matteo” post on Aussie Stock Forums

This was answered during the 2hours preview: it is of the amount actually invested; not your bank (so say on 40% of the capital employed)

This was provided with details over the past 12 months transactions. Their returned averaged 8.5% IRC..

Sorry to be skeptical, but how do you know if there were many more trades taken that didn't do so well, and the details provided were of selected underlying/s that did exceptionally well with the process?

I ask because I initially got into options due to covered calls and thought we could be millionaires in a short time by heavily leveraging with margin lending. Serious. I suppose CFDs are now promoted to acheive the same risky heavy leveraging.

It didn't take me long to realise the real winners were the boutique brokers who were charging astronomical (imo) fees for every stock trade and this was being shared with the seminar company to the best of my knowledge.

If the underlying blobs along nicely in a sideways range, the strategy would do OK. But fast moves down are the biggest danger. So then what do you do? Yes, there are some strategies, but they all have their trade-offs.

 

[wayneL]

Re: Response to “Matteo” post on Aussie Stock Forums

This was answered during the 2hours preview: it is of the amount actually invested; not your bank (so say on 40% of the capital employed)

This is not the correct way to measure performance then. If you have 100k, You want a return on 100k. Therefore capital employed is not really relevant for the return, it is merely a reflection of leverage.

So we are now saying that the average 5% per month is actually 2% per month on capital.

This was provided with details over the past 12 months transactions. Their returned averaged 8.5% IRC..

What details?

Anyone can manufacture details. What is required is reasonable proof of these returns. Forgive us for the cynicism, but there are plenty of shonks out there prepared to lie about their returns.

As IFocus points out, some sort of audit process would confirm these results.

 

[wayneL]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

The thing to remember with options is that they are priced, whether ITM OTM or ATM, theoretically so that there is no statistical advantage in any one position. Higher probabiltiy positions such as ITM CCs (or OTM naked puts) have higher risk relative to profit.

IOW losses will be bigger than profits. A guaranteed stop does not actually prevent this because of the factors I mentioned before.

Like straight share trading, profit depends on some sort of trading edge via timely entries and exits and risk control.

Regarding guaranteed stops - think like an actuary for a moment, because that's what the CFD companies do. Is the premium worth the extra safety? If the CFD compnay is comfortable with the extra premium, then there is a margin in it for them. They are making enough extra to cover their risk.

This means that the punter is paying over the odds for the guaranteed stop. Over the long term you fall further and further behind in extra commission costs. You are better off without it, over the long term.

That said, there is no advantage in this CFD + short call strategy over a straight out short put of the same strike and expiry. It is still available on margin, fees are less and statistically, you are better off without the guaranteed stop.

The $64,000,000 question then, is are you have selling a portfolio of OTM short puts, because synthetically that is exactly what you have.

 

[mazzatelli]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

...is are you have selling a portfolio of OTM short puts, because synthetically that is exactly what you have.

You know, I've found this statement, an instant thread killer :

 

[wayneL]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

You know, I've found this statement, an instant thread killer :

Geez it hardly makes sense though. I'll try again:

The $64,000,000 question then, is are you happy selling a portfolio of OTM short puts, because synthetically that is exactly what you have.

Sorry for killing the thread.

 

[mazzatelli]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Sorry for killing the thread.

Speak in softer tongues,
Thou hath uttered words fit to dispel the devil himself!!!

"otm put","synthetic"

The fool doth think him be wise,
but a wise man knows himself to be a fool
Who, then is the fool?
Even the devil can cite scripture for his purpose

"takes 20-30 minutes per month","renting shares on steroids"

What ho?! Steriods?
Know'st thou cannot make the beast with two backs?
Thy hath no desire to be crook-backed
Nothing can come of nothing

Why, would you sell into upward curvature of gamma?
There's nothing new about the strategy, other than means of execution and margin.

Farewell, fair cruelty
Doth the last, thy will speak of this subject

 

[wayneL]

Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?

Farewell, fair cruelty
Doth the last, thy will speak of this subject

ROTFL Mazza.

Also apparently, the last Mr Kertcher will speak of this subject.

Hmmmm. :batman:

 

[wayneL]

Re: Response to “Matteo” post on Aussie Stock Forums

I would like to see ASIC to audit those claims.............

IF

I receive some spam from a US option guy who is flogging a monthly advisory service. It is fairly reasonably priced, but make the claim that he has made 88% in his own account in the 2010 calendar year.

Proof? He has put out a video showing his actual TOS account for the period, with some steps made to show he is not scamming it.

I can respect this. We all can.

It would be a pretty simple matter for DK to do something along the same lines. In doing so, he could pretty much blow the doubters out of the water.

The question then becomes - why doesn't he?