|Hyperbole Made Easy|
Whaling had its Melville, bullfighting had its Hemingway. Limitless financial opportunity has Agora Publishing, which puts out The Oxford Club and True Wealth newsletters. Nobody writes a better investment tease. The language in which riches are promised in two recent mailings from The Oxford Club and True Wealth is so ripe and over the top it's precious.
Cleans windows, too
The Oxford Club's effort begins by appropriating every investor's most ardent fantasy: a company that cures cancer and combats terrorism. In heavy-breathing, highly misleading fashion, the mailer announces that "silver bullet that conquers nature's deadliest disease is about to 'go public.'" (This stock, I later learn, "went public" more than 40 years ago.) "Now there is only a brief window -- perhaps just weeks -- before these shares blast off." It gets better. Owning this stock will be like having "a winning lottery ticket." The pitchman, Oxford chairman James Boxley Cooke, says this "may be the best single-stock idea I've seen in my lifetime as an investor." No need to compare this stock to Microsoft because, well, it's better.
Then comes the terrorism kicker. A related company technology can screen cargo at ports or airports. At any moment, says Cooke, the company could get a big contract from the Department of Homeland Security. And when it does, "the stock won't just rise. It will look like something coming off the launch pad at the Kennedy Space Center." Intrigued -- and then some -- I send for a special report on the company. I pay $49.
Then I download the report, and I'm immediately deflated. The mystery stock is Varian Medical Systems, a fine New York Stock Exchange company with revenues of $1.2 billion, making it scarcely unknown. In fact, the stock has risen 800% since January 1999. I ask Spencer Sias, Varian's head of corporate communications and investor relations, what he thinks of Oxford's pitch. "It made me wince," he says.
I ask Sias about Varian Medical's counterterrorism prospects. "I wouldn't buy our stock because of cargo screening," he says. "Right now, we have a $20-million to $25-million business selling accelerants to companies that screen cargo. We are working on a prototype of a product that would allow screening to work without disrupting the flow of trade." Revenues from that product might not show up until 2006 or 2007, if ever.
Okay, so you pass on Varian. The mailer from True Wealth describes something that was "outlawed for 41 years -- Now LEGAL again." No, it isn't sodomy in Georgia. The investment allegedly "launched the largest family fortune the world has ever seen." This "currency" could "return 665% in the next 12 months." And then the letter goes on to make my favorite investment claim of all time: Pay to find out what the secret currency is (I'm thinking drachmas, ringgit or yak teeth) and you can then use the secret "to make as much money as you want." Could it be a printing press?
No, the "secret currency" is gold coins, which have been "legal again" for 30 years. After paying $49.50, I'm deflated once more. Saint-Gaudens gold coins, favored by True Wealth, lost almost 80% of their value after 1989. To state the obvious, when you buy gold coins, you're speculating, not investing.
Wait, there's more. The letter says subscribers will be shown a way to buy the coins at a 30% discount, "which means you could buy today and sell tomorrow -- and pocket as much as a 30% gain." Yes, if you find an incredible sucker. Simply put, the coins are sold by dealers at a discount to their "retail price." If you can then find anyone who will pay you "retail," you're golden.
Columnist Andrew Feinberg writes about the choices, challenges and frustrations facing individual investors.