The “Secret Currency”
Our first look at mystery terminology comes from an investment newsletter teaser that’s been passed around for a number of years, now. It refers to a so-called “Secret Currency” used by the world’s richest families to amass great fortunes during times of financial turmoil. It’s used to sell “True Wealth,” an investment newsletter by Steve Sjuggerud of Stansberry and associates. If you’re on any of the usual investment newsletter spam lists, chances are you’ve received it several times.
The “Secret Currency” teaser has all the usual trappings of the mystery terminology method - an unfamiliar term implying knowledge known only to the writer, wild-eyed claims of vast fortunes to be made, and a compelling narrative to pull the reader along. It even has a titillating reference to a 41-year government ban, only recently lifted.
So what is the mysterious “secret currency?” As with many such teasers, there are often enough clues in the message itself to figure out the answer.
Sifting through the various anecdotes and puffery, we can isolate a couple of interesting facts:
- The teaser says that the “secret currency” is a form of gold, but that “it has nothing to do with mining stocks, mutual funds, options, futures, or bullion. “
- It was banned by the Roosevelt Administration on March 9, 1933. The government ban lasted for 41 years.
These two statements are enough to figure out the answer. In 1933, ostensibly to stave off a banking crisis, President Roosevelt banned private ownership of gold bullion and coins. Since the first statement says the “secret currency” isn’t bullion, the answer must be gold coins.
The word “currency” probably implies numismatic coins, i.e. coins with a face value in currency of some country or other. Face value aside, modern gold coins generally trade at a small premium to the spot price of gold, so chances are that Dr. Sjuggerud is referring to coins with some value to collectors. Such coins can sometimes trade at large premiums to their meltdown value, depending on their rarity and condition. Dr. Sjuggerud is known to advocate investments in collectibles in a number of different forms, so this would tend to fit the pattern.
So, are gold coins a good investment? A quick review of the charts at PGCS (The Professional Coin Grading Service) shows that Dr. Sjuggerud’s anecdotes of past gains in the teaser are reasonably accurate. Of course this proves little other than the prices for gold in general, and gold coins in particular, have had periods of volatility in the past. It proves nothing about whether gold coins are a good investment now.
When sifting through the hype, charts, and hints of huge gains that investment newsletter teasers invariably contain, it helps to take a step back and consider how easy it would be to construct a similar letter yourself. Start with any asset that has had a lot of peaks and valleys in the past. Looking over the charts, you can easily identify a scenario where an investor could have made vast sums from the asset by trading at just the right time. Plot some figures for these well-time trades and you’ll have plenty of fodder for steep charts and greed-inducing return rates.
All you have to do next is come up with a plausible argument for how conditions are similar now to how they were at that perfect time in the past. It doesn’t have to be right, just plausible. Then you can write your own letter much like this one, and it will be every bit as valid and accurate. Just be careful not to make any specific promises, and you’re set.
Of course gold has the added drama of a government ban to add to the air of secrecy and mystery, but this adds nothing at all to an analysis of its merits as an investment. It just makes the story more exciting.
Given the current rate in inflation of the currency, an investment in gold coins might well be wise. But you hardly need to pay $100 a year for an investment newsletter to tell you that.
As an investor, greed, fear, and ignorance are your greatest enemies. Teasers like these are designed to play on all three. It’s quite possible that Dr. Sjuggerud’s recommendations are worthwhile, and we express no opinion one way or the other on the quality of his newsletter. However, it’s wise to be cautious when considering taking investment advice from anyone willing to use these sorts of advertising tactics.
Filed Under Investment Newsletter Marketing, Mystery Terminology, Stock Picking Newsletters | Leave a Comment
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Welcome to Ticker Tease! This site is dedicated to exposing the truth about investment marketing. Anyone who has spent any time on the net at all is likely to have encountered it - the breathless claims of eye-popping returns, hints of secret, esoteric knowledge that can make you rich overnight, or endless hype about the latest “hot” penny stock. We’re here to help you separate the snake oil salesmen and hucksters from the legitimate offerings. (And, sadly, there are many more of the former than the latter.)
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Filed Under Investment Newsletter Marketing, Stock Picking Newsletters | 1 Comment
