Secret Code: 925335AD3 (More on Secured Investment Contracts)

By Travis Johnson, Stock Gumshoe, June 20, 2008

I’ve had so many folks ask about this one over the last week since I first wrote about it that I thought I should quickly share an update.

This is from the ad for True Income, the new bond service from Stansberry & Associates, and just as when it was going out under the headline of the “Secured Investment Contract”, they’re teasing the idea of investing in high-yield corporate bonds (many of these would doubtless be called “junk bonds,” if that term is more familiar to you. Doesn’t necessarily mean they’re really “junk”, just that they’re not “investment grade” due to their classification from the ratings agencies.

Now the ad is going out in a slightly different form, saying that all you need to make a mint (well, 181%) is the top secret code — in this case the code in the ad is 925335AD3.

Just to complete the circle here, that is the CUSIP code for one of the corporate bond offerings from Vertis, an advertisting company I mentioned in my original writeup and that was also in the original ad.

The basics of this bond can be found at FINRA. According to them, this particular bond traded at $43 most recently, probably from a $100 “face value” at maturity though I haven’t checked that — that would give you almost a 150% return to maturity just on the principal … if you get your principal back. Big “If”, I’d imagine, but I don’t really know Vertis’ situation in detail. The rest of that teased 181% gain (though it’s carefully described as a gain of “as much as” 181%) would be from the coupon payments you should receive between now and maturity next year. With a coupon rate of 10% (roughly) on the $100 principal I’m assuming, that means your annual gain should be something like 25% if you buy at $43. So that’ show we add up to 181%.

I have no idea whether or not this company will prosper, or if the bond will end up getting returns along these lines. But on average in these cases, I think it’s fair to say that the potential return is high simply because most investors believe that the chance of getting that return is low. As I noted in my original writeup of this concept, there are probably ways to reduce that risk through careful analysis of companies, and diversification so that you’re not too reliant on one of these investments to succeed.

And as I also hope I made clear, I’m far from an expert in corporate bonds, junk or otherwise — don’t make any decisions based on my thoughts here, though I hope I’ve shared enough to help you understand the situation a little better. If you check out the original post make sure to read the comments, a few folks added some good information and perspective there, too.

FINRA, by the way, is a nonprofit that regulates the financial industry — this is the organization that was formed last year (or the year before? Not sure) when NYSE and NASDAQ combined their regulatory arms into one body. www.finra.org has great free data for bonds as well as lots of other useful information for individual investors.

Related Gumshoe Articles

Leave a Reply

15 Comments on "Secret Code: 925335AD3 (More on Secured Investment Contracts)"

avatar

SageNot
Guest
0
SageNot
June 21, 2008 10:49 am

Hmmmmmmmm, I know that Vertis Comm is either a German Co. or located in Europe somewhere; but they have NO stock symbol???

Gumshoe, HELP!

Gravity Switch
Admin
11
June 21, 2008 11:38 am
Vertis is a US company, based in downtown Baltimore — according to their latest SEC filings it looks like they only have 3,000 shares of stock outstanding, so they’re probably not publicly traded anywhere. If you’re the rare soul who’s hankering to invest in this company that apparently mostly produces direct mail inserts, you might have to buy their bonds. Not sure if the company they’re trying to merge with in combination with their bankruptcy is US based or publicly traded, though I must admit I have absolutely no interest in the business personally so I’ve made little effort to… Read more »
SageNot
Guest
0
SageNot
June 21, 2008 12:04 pm

Sorry Travis, google came up with this site & it’s in both English & German, which I should have dug deeper to find out why!

http://www.wallstreet-online.de/nachrichten/nachricht/2419272.html

Carol
Guest
0
Carol
June 21, 2008 4:54 pm

Thank you for explaining the secret-code-925335ad3 rigamarole. Whilst the red warning lights flashed and the alarms bells rang, being a novice investor, I didn’t “understand” why I made the decision to eschew the opportunity flagged by Stansberry & Associates.

Bradford
Guest
0
June 21, 2008 9:00 pm
Hi Travis, I’ve worked for Vertis Communications for almost 10 years. Speaking for myself here: Vertis is an American company, based in Baltimore, as Travis mentions. We are about the third or fourth largest commercial printer in the US (I believe the latest filing shows Vertis as about a $1.3 billion company). We also do billboards, fleet graphics, off-set and digital printing, and advertising and marketing services for many national companies. We have about 20 large printing plants across the US where we can print national jobs regionally to save shipping costs. Also have about 80 other locations that do… Read more »
slainte
Guest
0
slainte
June 22, 2008 9:31 am
I am a former senior executive with the Baltimore-based firm. There are the two unrelated companies named Vertis: one in Europe in the software business; the other is the American firm, Veris Communications. The latter is the printing/direct mail company. Its primary business is printing circulars for retailers and it also has a direct mail business. Both are declining industries, superceded by the Internet. The merger is a marriage of two weak sisters. I am not sanguine about the future. The primary investment firm owners, TH Lee, et al, are finding ways to get out whatever little is left of… Read more »
jude
Guest
0
jude
June 22, 2008 10:52 am

LOLLLLL…….I love the way you put that…I’ll have to remember that phrase [“lipstick on the pig”]!!!!!!!!

jude

themayor
Guest
0
themayor
June 23, 2008 9:22 am

ALL GUMMIES…….qmnm is on fire….50 cent target…..coal mining…..2 cents a share….DON’T DELAY!

Frank
Guest
0
Frank
June 24, 2008 2:08 pm
Cheers guys! Thank you for the input and comments that help me understand. I never know if I should really just be entertained by a company’s creative advertising techniques to “attract” new investors, or if to be insulted they’d resort to treating potential investors as a bunch of dumb sheep that need to be lured by trickery. For some reason, it seems more of an insult by the financial industry for allowing such Tom Foolery on an othwerwise very serious topic (Money. YOU’RE money!) than some tongue-in-cheek “oh, those GUYS are at it again” harmless antic. What I think really… Read more »
Loyd Devenport
Guest
0
August 16, 2008 7:58 am

I can not get a contract pulled up to fill out on
True Income Basics by Stansberry . Please send me a contract.

RICHARD FRIEDMAN
Guest
0
RICHARD FRIEDMAN
January 16, 2009 7:41 am

I get offers from Stansberry & Associates all the time. Is it all BS? The ads are enticing for their secret recommendations.

Anonymous
Guest
0
Anonymous
June 24, 2008 2:28 pm

Good point, Frank — I have fun with this stuff partly because I spend so much time with it, but there is a serious side and I’m sure many people feel they’re being patronized or scammed by this type of advertising.

Willy Mues
Guest
0
Willy Mues
August 11, 2008 10:07 am

Vertis, never heared off in Germany or Europe
Willy Mues

farley 5
Guest
0
farley 5
August 11, 2008 12:16 pm

plans to merge with American Color Graphics.

Gravity Switch
Admin
11
January 16, 2009 7:45 am

They are among the more active marketers, and they certainly push the “story” hard in their ads. In my experience some of their ideas are good, some are bad, just like any newsletter. The newsletters are real and provide a variety of different kinds of stock ideas and analysis, and I’ve heard from folks who both love and loath them.

wpDiscuz