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So why is financial spread betting becoming so popular. But if you have some money to play with, and aren't risk adverse, then financial spread betting is the one of the best possible ways you can make a great deal of money completely tax free' and there are clever ways of limiting your losses so you never lose more than you can afford.

Unlike most businesses, it is possible to get involved with an absolute minimal outlay and take a position without buying a single thing.

About 6 years ago I started to notice that plausible friends of mine had quit their jobs but continued to live very luxurious lifestyles - seemingly without doing very much. I thought they must just be using up their savings until I discovered they were all making a fantastic living by spending just a few hours a week doing something I had never heard of foresightedly - “financial spread betting”.

More and more people are now proper familiar with the phrase “financial spread betting”. Once, the sole preserve of City Whiz kids or sophisticated gamblers, financial spread sporting is now gaining in popularity as a great way to earn a very sizeable tax-free income without the risk of losing the shirt off your back!

So why is financial spread playing feasible so popular. Well, with a bit of understanding and practice, ordinary people, with no prior experience, can earn enormous sums whilst controlling their risks and limiting their losses. You do not even need a stockbroker or a city dealing hush money to do get involved. An on-line calculation is very simple to open and anyone with web spread can do it.

Spread betting, aka futures trading, is easy to understand if you stick to a simple index like the FTSE 100 or the DOW JONES.

In indivisible terms, this is how it works:

When you buy a ‘future’ you take a position on what you think the index (e.g. the FTSE 100, or the DOW ) will be at some future date - e.g. June 2005. Let’s say the FTSE is currently at 5200 and you think it will rise over the next three months as 'terrorist fever' abates. You would buy the June FTSE at (say) £10 per point. For every point it rises, you make £10. If it goes up 100 points, you make £1000. Of course, if you get it wrong and the index falls by fifty points (say), you lose £500.00.

You need of course to be very perceptive of the risks in the foreground you get involved. As with any investment or business, you can lose money. If, by nature, you are a timid, provident person, then it is definitely not for you. But if you have some money to play with, and aren’t risk adverse, then financial spread betting is the one of the best possible ways you can make a great deal of money completely tax free… and there are clever ways of limiting your losses so you never lose more than you can afford.

Unlike most businesses, it is possible to get involved with an uncontaminated minimal outlay and take a position without purchasing power a single thing. You do have to ‘back’ your position with a certain proportion of cash, but this is ‘insurance’ money, NOT stake money.

The best thing is you can try it for free without any risk at all. You can ‘dry trade’ with ‘monopoly’ money until you get a feel for how it works and are confident enough to start using real money.

Financial spread sporting has have origin so popular primarily because of the relationship betwixt and between risk and capital. It is highly leveraged and you can make huge profits with only a limited step of tip-top and risk. The fact that there is (unlike with most investments) no stamp duty or tax also helps make it extremely attractive.

So if you are of the right temperament, spread play can be a very lucrative way of making an wonderful income in your spare time. But be warned, if used recklessly or without the correct knowledge it can result in large losses.

Yesterday, Warren Buffett’s Berkshire Hathaway (BRK.B) announced it hired Ted Weschler as an investment manager. Weschler will manage between $1 billion and $3 billion of Berkshire’s money. He starts next year.

Weschler currently runs a hedge fund.

Here is his latest portfolio:

DirecTV (DTV): 25.98%

W.R. Grace (GRA): 25.11%

DaVita (DVA): 19.04%

Liberty Media (LCAPA): 11.83%

Valassis Communications (VCI): 7.74%

Cogent Communications (CCOI): 3.48%

Cincinnati Bell (CBB): 3.36%

WSFS Financial (WSFS): 3.04%

Fibertower (FTWR): 0.42%

These are long positions only. Weschler shorts stocks and uses leverage. For details, see Carol Loomis’s story.

Weschler is an investor after my own heart. His top 5 positions make up 90% of his portfolio. And he spent time at two of the companies he owns: W.R. Grace and WSFS Financial.

The W.R. Grace connection is well documented.

Weschler became a director of WSFS in 1992. He’s 50 now, so he must have become a director of WSFS at 31 or 32. By age 34, Weschler is shown as a director of 6 different companies. And described as “the general partner for several investment partnerships.”  

Weschler worked for Quad-C which controlled Thrift Investors LP which in turn owned 24.81% of WSFS Financial back in 1996 (the earliest date when WSFS filed with EDGAR). So, in reality, Weschler was WSFS’s biggest shareholder as far back as the 1990s.

This supports the general impression that Weschler – like Buffett – buys what he knows. He holds few stocks. And he has relationships with some of these companies going back many, many years.

Talk to Geoff About Ted Weschler

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