Confessions of a ‘market’ manipulator…

  • Don’t be lazy or ignorant
  • Calamity

If you look closely at our style of advertising, you’ll notice something.

It may be imperceptible to you, but it’s there.

What is it? It’s that our advertising is about as subtle as a sledgehammer cracking open an egg!

We know that. We acknowledge it. And, like it or not, that’s the way it is, and the way it’ll stay.

The reason we mention it is that, unless you’ve completely switched off, you’ll have noticed we’ve recently launched a new investment advisory — Greg Canavan’s Exclusive IPO Investor.

However, this was a launch with a difference. You see, while we’ve launched the service, you can’t actually ‘subscribe’ to it. If that doesn’t seem possible — or make sense — read on. We’ll explain all below…

Markets

Overnight, US markets were closed in observance of the Memorial Day holiday.

In Europe, the Euro Stoxx 50 index closed down 0.07 points, for no meaningful percentage change. Meanwhile, the FTSE 100 gained 0.4%, and Germany’s DAX index added 0.21%.

In Asian markets, Japan’s Nikkei 225 index is down 106.38 points, or 0.54%. China’s CSI 300 is down 0.15%.

In Australia, the S&P/ASX 200 is up 4.23 points, or 0.07%.

On the commodities markets, West Texas Intermediate crude oil is US$49.77 per barrel. Brent crude is US$52.08 per barrel.

Gold is trading for US$1,268.55 (AU$1,708.94) per troy ounce. Silver is US$17.43 (AU$23.46) per troy ounce.

The Aussie dollar is worth 74.25 US cents.

Don’t be lazy or ignorant

We know from all the emails we receive that many folks find our marketing style to be ‘cheap’, ‘sleazy’, and ‘dodgy’…among other, sometimes stronger, words.

Hardly a week goes by without a well-intentioned email arriving in our inbox from a marketing ‘expert’ offering advice on how we can do things better.

Invariably, the advice is to ‘make your messages shorter, as people don’t have much time these days.’

The fact is, if somebody can’t be bothered to read our emails, we’re not sure we want them as a customer.

Even so, we love those emails. Mainly because not one of these experts ever takes the time to ask us about the health and strength of our business.

They assume we have a terrible business. They assume that because they don’t like how we advertise or promote our investment advisories.

So, to set their mind at ease, we can report that our business is stronger, bigger, and [Warning: Honesty alert] more profitable than it has ever been. I know, it’s not the ‘done thing’ these days to admit that you run a profitable business.

‘Profits’ have become a dirty word. Folks seems to prefer businesses that lose money, and which have no chance of ever making a profit — we wouldn’t dare mention Tesla Inc. [NASDAQ:TSLA] here.

But we are a profitable business, and proudly so. We believe in free market capitalism. We believe in the virtue of profits. And we believe in helping others make profits too, through our investment advisories.

Now, just because our business makes a profit overall doesn’t mean we get everything right. And it doesn’t mean that all of our investment services are profitable for us to run.

In the same way that not all of our investment advice is profitable either. Need we again mention your editor’s diabolical recommendation of Quickflix Ltd? A stock we tipped as a buy at 12 cents, and tipped as a sell at 1.8 cents.

Enough said.

An example of an unprofitable service for us to run is Options Trader. We launched this service in 2015. It’s helmed by an old buddy of mine, Matt Hibbard.

I say that it’s unprofitable for us because, while plenty of folks sign up for it [Warning: Honesty alert], most of those who join the service are too lazy to follow the advice.

They can’t be bothered filling out the application form to add an options trading account to the share trading account. They can’t be bothered learning the basics of exchange traded options.

And when they read about selling puts and calls, they immediately go into meltdown. They accuse us of treachery and irresponsibility by talking to adult investors like…well…adults, and teaching them how to use these potentially lucrative strategies.

Instead of taking the time to learn about options, they instead write to us, threatening legal action, or telling us they’ll report us to the authorities.

We can only think that those folks have a very poor regard for their fellow subscribers — they seem to think that everyone else is as lazy and ignorant as they are.

Fortunately, from my lofty position of publisher, I know that’s not true. I know that the majority of our subscribers have a voracious appetite for knowledge and ideas. I’ll get back to that in a moment.

The odd thing about the Options Trader service is that, in terms of winning trades, it has by far the best track record. When I most recently checked the numbers just over a month ago, Matt had a 93% win-rate.

That’s unheard of in any type of trading.

Yet, as I say, most folks are too ignorant or lazy to accept that. For them, learning about options is too hard, so they justify their laziness by saying how options are high risk, and that nobody should touch them.

Well, options trading can be high risk, especially if you don’t know what you’re doing. But if you’ve got a market veteran like Matt Hibbard guiding you, and if you follow his sensible approach to trading options, then it’s actually possible to structure an options trade that makes it less risky than buying shares outright.

[Cue the indignation and threatening emails!]

In short, for the folks who have followed Matt’s advice, the Options Trader service could have been incredibly profitable for them. It could have been incredibly profitable for the lazy and ignorant folks who refuse to go anywhere near it too. But they’ll never know that.

But for us as a business, the Options Trader service isn’t profitable. It loses money. Yet, despite that, I’ll continue publishing it. I don’t care if it loses money for the business, because I know it’s the type of service we need to offer you.

While I’m prohibited from following Matt’s specific advice, I do use Matt’s strategy for my own investment portfolio. Unfortunately, my win-rate isn’t as good as Matt’s. So I wish I could follow his advice. But you can — if you have an open mind to investing and are willing to learn.

I’m sure I’ve mentioned this before. But if some of the claims made by our detractors were true — that we’re only interested in lining our own pockets — then I would have closed the Options Trader service long ago.

In truth, I doubt I would have bothered launching an options service in the first place. Instead, I’d launch a service I knew people would buy. Something to do with small-caps or microcaps. [Warning: Honesty alert] Those services are much easier to sell.

But let me get back to my main point.

While some folks do look down on our style of advertising, I contend that, far from being ‘cheap’, ‘sleazy’, or ‘dodgy’, our advertising is just about the most honest form of advertising you’ll find.

If you take the time to read one of our promotions from start to finish, you’ll find everything you need to know:

  • The name of the service
  • The cost of the service
  • The potential profits if you follow the advice
  • The risks and potential losses if you follow the advice
  • The rationale behind the advice

It’s all in there. We then provide much of that information again on the order form. Especially the price of the service. You know exactly what you’re getting before you subscribe to any of our services.

Furthermore, we offer a 30-day, money-back, no questions asked guarantee.

If you don’t like the service you’ve subscribed to, for whatever reason, you just have to call us and we’ll cancel and refund your payment — providing you contact us within 30 days of subscribing.

Unlike most financial services providers, we don’t tell you to read a 300-page document that’s written in legal speak, designed to protect the product provider rather than provide information to the customer.

Also, we’ve stopped using ‘fine print’ in our promotions. The ‘fine print’ at the bottom of the promotions is now in the same-sized font as the rest of the letter. That’s the same for the order forms.

We have nothing to hide. Everything is in the open.

Can you say that about any, or most, other financial services providers? I’ll let you be the judge of that.

And so, with the spirit of openness in mind, we return to the subject of our most recent investment service launch — Greg Canavan’s Exclusive IPO Investor.

Normally, we’ll launch a new service as a standalone service. We’ll make a big song and dance about it, and encourage you to subscribe.

That’s how it normally works. But, when Greg first introduced the idea of an IPO service to me last year, I soon realised our launch procedure would have to change.

You see, the companies that Greg will feature and recommend in the Exclusive IPO Investor service are most likely to be small companies. Not all of them, but many of them.

We’ve seen in the past with our other investment advisories offering small stock opportunities that you either have to recommend bigger stocks or you have to limit the number of subscribers.

(As an aside, I have personally experienced this as editor of Australian Small-Cap Investigator from 2008 to 2013. When I took the helm of that service, it had just over 3,000 subscribers. Two years later, it had nearly 20,000 subscribers. I could no longer recommend the really small-cap stocks that I had recommended in the beginning as the recommendations were causing share prices to skyrocket! Not good.)

There was another problem. Every time we launch a new service, we automatically add it to the relevant stable of Alliance memberships. For instance, our Partnership Alliance program grants members access to all of our current services (except Microcap Trader and Quant Trader), and all future services — without exception.

It means that folks who joined the Partnership Alliance program last November have received access to Greg’s Exclusive IPO Investor service for no extra charge.

And when we launch another new premium advisory in July this year, they’ll automatically get access to that service too. Again, for no extra charge.

Now, I said that was a problem. It’s a problem because we have nearly 2,000 Alliance members. Many of them, in a survey, expressed interest in the IPO service.

So, if we weren’t careful, we could end up with a situation where many hundreds, if not thousands, of people bid for the stocks recommended in Greg’s IPO service, only to be disappointed if they miss out.

What could we do? If you’re familiar with supply and demand, you’ll know that you can manipulate demand by changing the price. We could, therefore, set an ultra-high price for Greg’s IPO service in order to limit the number of subscriptions.

That wouldn’t have been a terrible idea but, at the price we had in mind, it would have been so high that it really would have excluded all but the wealthiest of our subscribers.

And even then, there would be doubts that enough folks would see the value in paying so much for a single service.

That left us with one option. In effect, we decided to ‘soft launch’ Greg’s IPO service, not as a standalone service, but solely as part of our Alliance package instead.

To my mind, it seemed the perfect win-win scenario. Our current Alliance members would all get access to the new service. Tick.

And, even though the Partnership Alliance still involves a premium outlay, we figured that the inherent value of Alliance membership made it a proverbial no-brainer. Tick.

Because, for paying slightly more than the cost of a standalone subscription to Greg Canavan’s Exclusive IPO Investor, Partnership Alliance members will get access to everything else we also publish — except Microcap Trader and Quant Trader.

Joining the Alliance because of Greg’s IPO investor service will also give new members access to Options TraderGold Stock TraderResource SpeculatorTime TraderAustralian Small-Cap Investigator, and more.

So, yes, I confess to being a manipulator. We’ve manipulated the ‘market’ for our newest investment advisory. Though not for nefarious reasons, but rather as a way to make sure as many of our customers as possible can get access to this extraordinary new service.

I’m certain a number of folks will criticise me and the company for launching the service this way. But, what’s done is done.

And, in the spirit of openness, I felt it was important to give you my reasons for doing so.

As I often say, our subscribers are the most important people in our business. The only way we make money is through subscriptions. We don’t take kick-backs, or trailing commissions, and we don’t write research for companies in exchange for a fee.

We’re independent. Our revenue streams and [Warning: Honesty alert] profitability as a business depend on us providing you with what we believe is the best investment advice you can get.

If our advice sucks, we’ll lose subscribers. But if you like and appreciate our ideas, whether you follow the investment advice or not, we figure you’ll stick around. And if you like what we do enough, you may even think about joining our Partnership Alliance.

Or you may not.

Remember, our relationship with you is purely voluntary. We don’t force you to open our emails, click on our promotional links, take the credit card from your wallet, enter the details on our secure web page, and then click ‘Subscribe’.

That’s all up to you.

We treat you like an adult. We write to you in plain English. We don’t aim to bamboozle you with jargon or fancy words. We aim to help you, introduce you to ideas and, hopefully, aid you in making money…or at the very least helping you not lose money.

I know for a fact we don’t always succeed with those things. But what I also know for a fact is that our entire existence relies on being honest with you.

That’s good for our business. It’s good for your wealth and your peace of mind. In my book, that’s a win-win.

For more on how to join the Partnership Alliance program, go here.

Calamity

From The Age:

Australian asset manager Altair Asset Management has made the extraordinary decision to liquidate its Australian share funds and return “hundreds of millions” of dollars back to its client, citing an impending property market “calamity” and the “overvalued and dangerous time in this cycle.”

Interesting timing, given the nature of the premium investment advisory we’re due to launch in July — which we’ll automatically add to the Partnership Alliance membership, for no extra charge.

Cheers,
Kris