Category Archives: Investment Program News

Earn by Loaning Scam Update

no hyip

Hi everyone. Some of you may remember a while back I blogged about the Earn By Loaning “Investment Program” (it was really a HYIP) and how its creator got indicted by the SEC. Well, I’ve got some news related to this issues. Apparently “investors” funds are still locked up by the SEC and the liquidating agent still cannot distribute whatever money is still left in the Earn By Loaning estate. Here is a copy of the actual e-mail from the liquidating agent:

Since our last email communication of July 24, 2009, we have received a few inquiries about the status of this case.

As previously reported, Liquidating Agent entered into an indefinite Voluntary Freeze of the assets under its control.

As of this date, the SEC has provided no guidance on the lifting of this freeze.

Liquidating Agent has received and stored data on all claims received by the Bar Date of March 24, 2009.

Liquidating Agent intends to petition the court to pay fees and request guidance for distribution of all funds remaining in the estate.

Liquidating Agent is uncertain as to the time necessary for hearing and ruling on this petition.

As additional information becomes available, we will update you

For your reference, the SEC case number is CV-09-38-EFS.

For case details, go to: http://www.sec.gov/litigation/complaints/2009/comp20890.pdf.

Thank you for your continued patience.

Sincerely,

Liquidating Agent

Quest Holdings, Inc., dba Earn by Loaning

P.O. Box 3959

La Mesa, CA 91944

Phone: 619-668-4500

e-mail: questholdingsinfo@corpmgt.com

Patience eh? Hmm. I wonder if anything will really come of this. If people get a least a small portion of what they put in that would be great.

Alan

Private Investment Program 2 – Sept 08 Trading Results

Here are the September 08 performance result for my Private Investment Program 2:

+4% gross returning +3.2% net. this is the best we could do under the circumstances, as our margin bank interest is way up on last month.

In my opinion this isn’t such a bad result considering the massive volatility in the stock market. This program trades on the ASX (Australian Stock Exchange) and trading conditions have been brutal there as well. Here is what our main trader has to say about this global financial mess and how its affecting our program:

“I would like to make it crystal clear before we declare this months trading results, that we are involved in the worst down turn in Equity Trading in decades, World Wide.
It’s of no benefit to any body pointing fingers as to who’s to blame, but we do know as of last Friday they (US Govt.) took the first step, in many, to ease the pressure on credit.

As I mentioned in the last report we had no idea then how the market would react to the US Govt. bail out of their financial system, I seems with a certain amount of caution, till it becomes clear how this rescue package works we will see some very high volatility on the trading floor..”

Private Investment Program 2 – August 2008 Performance

Hello there. Just a brief update post on the status of the “private investment program 2” that I’m invested in – just in case you’re all curious. I know some of you have asked me just what it is this program does and how it performs. Well, here is about all I can really tell you encompassed within the text below.

Strategy 1 will be posting a 4.6% gross netting out at 4.1% for the month of August 08.Strategy 2 is still on hold. (90 days).working toward recovering Junes loses.(Yet to be determined)We have received some very good reports on our Commodity stocks Rio Tinto, Oz minerals etc.It seems the experts expect some 15 more years of more positive movement in these products going into the East, China, India, Japan, Korea, and that’s not counting the US when they move back into positive Bull market mode in early 09.

With our stocks we will be well positioned to gain on any increases.

Private Program 2 June 2008 Performance

For all curious spectators and potential members, here is the Private Investment Program 2 performance outcome for June 2008:

–quote–

JUNE 08 RESULTS.

After clearing out our consolidated revenue, including most of Junes returns and paying out our taxes, we have decided to roll what little funds from our returns of June into our July trading month.

June 08 RWC 1 =0%

June 08 RWC 2=0%

If your not happy with this be aware that all the Superannuation, and retirement managed funds lost between 11 to 30% this past year. WE MADE MONEY

We actually trade our funds, and no matter where the share price is we keep trading the options in that stock, this is a very different method to most super fund manages, who simply buy stock or property on their clients behalf, and go with the flow.

–end quote–

More information about this investment program can be found here:

http://alansmoneyblog.com/2007/12/17/new-private-investment-opportunity-private-2/

How Private Program 2 Works

Ever since I first introduced this private investment opportunity to my readership the most common question that I get asked is “how does this investment make us money?” My answer is always “with style , grace and a lot of skill” Just kidding, no, that is not my answer. I try to explain it to people in as concise terms as possible, but as of late I received an e-mail update from our main trader which deals with this very topic, and I believe he has greatly lightened my load. Now I can just refer people to his clear and simple explanation of how covered call stock options trading makes us money – in other words how Private Program 2 really works. So without further ado those people who have been invited into this investment program or are thinking of joining should FIRST read this:

–quote–

How Trading Strategy 1 Works

To enable me to explain this in simplistic terms, I’m going to pretend that we run a car rental business, we don’t, but I find it’s the best way we can explain how we generate our income.

Imagine our blue chip stock we own as a fleet of cars to rent, each option contract of stock = 1000 shares, that in turn represents 1 car lets say valued at $45,000.each . the good part about this fleet, is the older it gets the more valuable it becomes, but in the short term the value could slip,(bad market days) but the rental income still continues no matter how much the car(stock) value has slipped, but NEVER below its insured value!

Now we own 86 cars that’s (86,000+ Blue chip shares approx. $3,870.000),and we rent them out for as much as we can collect each month.

All of these cars (stock) are insured at the time of purchase, at a rate of agreed replacement value, usually below the cost of our purchase price. (The price gap) the price difference between cost, and insurance cost.

Nealy two thirds of cost of this fleet is being financed by the margin bank, and after we collect our rental each month, we must pay our bank interest 9.35%pa., and our drivers (traders – that means me and my crew), and our insurance, and all other related costs, paid monthly, And the % that’s left is profit.

As the profit builds we buy more cars (stock) and add them to the fleet, 10 this month of May hence increasing our profits.

Keep in mind two years ago we started with 1 car or $55,000 to day we operate 86, and growing.

The only way to lose in this business is for a member close their account, or require their funds back (without appropriate notice, as this notice will fluctuate with the amount required it could be up to 1 to 3 months.) that’s their prerogative, but they must realize that to break into a trade mid month we need to cancel out the required contracts (sell 1 car or more) to satisfy the funds amount required back, and if that action results in a loss, that member must be responsible for that loss, not anyone else who have funds in that broken trade.

The other disadvantage for that member closing their account, is his or her tax commitment, remember folks the funds are all traveling (trading) under one name, and if you lose the protection of that name (Company Name) by closing, your tax commitment could be as high as 46.5% without the Australian Tax File Number, add to that a premature close out cost, and it becomes a very large slice of you hard won profit.

I hasten to add in the two years trading we have had approx. 12 people out of 800 members close their accounts, the main reason still seems to be chasing bigger profits, or that pot of gold at the end of the rainbow, and we all know in our hearts is a rear find..

— end quote —

–quote–

How Trading Strategy 2 Works

t seems last weeks update got the message over how we trade in Covered Call Trading, using the Rental Car scenario, all seemed to understand the simple example.

This week I would like to explain in the same simplistic terms how we trade in the Strategy 2 dealer book.

If you remember last week we actually OWN the stock (cars) that we forward sell the future price’s, (rentals) in the case of our Strategy 2 trading we forward sell future prices (rentals) on stock we DON”T OWN.

Let’s put in simple terms, just imagine we lease all of our rental cars instead of buying them outright, as we do in out Strategy 1 trading book, this of course allows us to acquire a lot more stock (cars to rent), (we all know to lease a car is cheaper than buying,) and potentially a lot more profit, as we don’t have to pay out the huge cost of buying stock.

To achieve this we go into the market, and lease shares (cars), with an option to buy or sell future prices, (rentals) usually a few weeks in advance, for the best (rental) premium price we can get.

Now lets say we get 75c per share premium (rental) from the market this equates to a gross profit of $7,500.00 for a contract of 10,000 shares, or (10cars) leased over say 6 weeks, this is great, as long as the market behaves and goes in the direction we have placed our trade, we walk away with potentially $7500.00.

To safe guard against the market not going the same way, we can go back into the market, and use some of the lease profit (75c) and buy some insurance on each one of the 10,000 option shares, this may cost say 30c each, hence reducing our gross profit to 45c, 75c -30c insurance =45c profit. or $4500.00.

To put this in simplistic terms, we walk into a car rental company, lease 10 cars, (gee this customer would be the making of a car rental company) and we advertise the loan of these cars at a slightly better price than we paid the leasing company, keep in mind on the options market we’re talking to over a million people every day, so we have a good base of potential customers.

However to safe guard our selves against accidents we buy 10 insurance polices, and pay for them out of the money (75c) we received from the people who in turn leased our cars.

BEST CASE SCENARIO

All of this leasing activity is supported by cash, our cash, now this cash margin required by the brokerage company is the estimated replacement cost of the (cars) stock between the price we nominated in the market, called the “strike price”, and the insured price in this case 30c, all of this cash is taken from our account and held by the brokerage company,and when the lease time is over we will receive our margin cash back, as well as the profit 45c from the lease, this is the best case scenario.

WORST CASE SCENARIO

Worst case scenario is the cars all crash, (market goes in the wrong direction) and we have to buy out our lease, and as the insurance is for less than the cost of the car, (stock) we will walk away with a loss. 45c per share, or ($4500.00) without insurance our loss would be $7500.00 plus commissions ect.

ROLL AWAY

If we feel that the market is recovering, we have the option to roll forward, all of the options in danger of crashing, to another time period, hence delaying our profit for that stock by what ever time period we choose to go forward.

REDUCED RISK ON LOSSES

This risk is reduced by leasing a mix of stocks, up to a dozen blocks at any one time, so some we will win, and some we wont, a double digit profit month requires all the leased stock returning in good order, with no lost stock (cars).

MIXING THE LEASE TERMS

This simply means we can make money no matter which way the market runs by nominating a buying or selling option term.

REQUESTED WITHDRAWALS>

When we have a requested withdrawal in the middle of a trading month, this can potentially be a loss for that member, if we have to close out some trades to regenerate the margin cash back that’s being held by the brokerage company, in this case to pay out that request, this underlines the importance of giving yourself plenty of time.

OK I think that’s enough.

— end quote —

Does that make sense to you folks? Incidentally if you wish to learn this method and trade on your own the main trader does give private one-on-one lessons for a modest fee. I am considering doing this myself later on – we shall see.

I think that about does it for this post – it is already overly large enough as it is. I’m anxiously awaiting this month’s returns – hopefully they’ll bring me a big smile :)

Cheers everyone, and happy investing!

SEC Indicted Greg McKnight of Legisi Holdings

nohyip.jpg

I just found out that Greg McKnight, the admin of the once popular but now infamous LEGISI HYIP (High Yield Investment Project – aka Ponzi Scams) has been recently indicted by the Securities and Exchange Commission (SEC). I hope that justice will be served and Mr. McKnight gets put where he belongs – behind bars. In case you are wondering, no, I did not get involved with this online investment project – thank god!

You can get the details of this case at the following link:

Securities and Exchange Commission v McKnight – 4:2008cv11887 – Justia Federal District Court Filings and Dockets