Untapped Wealth Pushes the Envelope … in a bad way

I’ve looked at plenty of teaser email ads from Untapped Wealth over the last year or so — if you’re not familiar with these folks, this is a newsletter run by Tim Fields and Eric Dickson, and it’s described as the “flagship” publication of Trinity Research, one of a half-dozen or so relatively large financial newsletter publishers.

In many ways, Untapped Wealth has been very similar to so many others — they pick some good, some bad, and they use the tease/greed impulse to get you to sign up to find out the details about their favorite investing ideas. Their teaser picks over the past few months that I’ve noted have included a geothermal play, a WiMax investment, and the much-discussed “forever battery.”

Some of those were interesting ideas, some were not (at least to me) — but they did at least appear to be honest investing ideas put forward by their editors (and copywriters) to show their stock-picking prowess and whet your investing appetite.

In my opinion, they just veered over into a much more unsavory part of the business — perhaps they’ve done this before, but if so I didn’t notice it. And I get the feeling that they’ve sold whatever integrity they might have had as an independent stock-picking firm.

You see, a reader just forwarded me a message from Tim Fields that purports to share his “best 15-to-1 profit opportunity I’ve seen in years!”

The ad urges you to sign up for Untapped Wealth, and describes the spiel they provide about this favorite company as a free gift for you, to give you an introduction to the newsletter’s work. That’s not too unusual — plenty of folks, including the Motley Fool for example, give away free research reports as a way to try to convince you that they have a good research product. I don’t have a problem with that.

And the information about the company seems like it’s probably mostly legit — it’s a little shoe company called Aussie Soles (AUSE) that’s trying to steal Crocs’ thunder with a new plastic shoe. Sorry, not plastic, “Auslite.” Not as exciting as it might have been back when CROX was near $80 (it’s around $10 today), but still, I suppose you can make an investment case for them, and if that’s what Untapped Wealth wants to do … more power to them.

But there’s a huge problem, in my mind: This isn’t just a “free research report” that they put together to convince you that Untapped Wealth does a good job.

It’s a paid advertisement — the promoters of Aussie Soles paid someone called CFM $300,000 to run this particular ad campaign. I’m not sure how Trinity Investment Research, Small Cap Fortunes, CFM, and Untapped Wealth are related, but it doesn’t particularly matter to me — Untapped Wealth apparently received a fee of $2,000 from CFM for the editorial work, according to the disclaimer, and hopes to get new subscribers from this effort as well.

Now, this is not illegal or anything — they did disclose it, though of course the disclosure was in the small print that almost nobody reads.

(Which is another good opportunity to tell you, please, to read those disclaimers if a stock idea gets you all hot and bothered. “This is a paid advertisement” has a way of cooling the strongest greed impulse, I’ve found.)

But if you ask me, legal or not, it stinks. I have no problem with advertising. And I have no problem with investment newsletters promoting other things — stockbrokers, other newsletters, or whatever other kind of product they think might appeal to their readers. I run plenty of advertising in this space, too, and I think advertising is fine (though I strive to make sure that the advertising does not impact my editorial decisions). I’ll go so far as to say that advertising is good, since it helps enable me to spend a lot of time writing — for, one hopes, your edification and entertainment.

But this is a little different — this is using the reputation of your investment newsletter to sell the very thing that you are known for analyzing and critiquing. Without even clearly saying so in the copy of the analysis (though a few times in the long form article it does note, “Advertisement, please see important disclaimer on the bottom,” it does not say, “even though this looks exactly like hundreds of stock recommendations you’ve seen, this isn’t a stock recommendation.”

To my mind, this is sort of like Consumer Reports deciding to sell the front cover of their magazine to Ford, and to let Ford run an ad on the cover that says “Ford Explorer now Top Rated SUV in America, never ever ever had a rollover problem, gets great gas mileage, and comes in cool colors, so go buy one today! It’s much better than that Toyota thing you have your eye on!” With an accompanying article by CR’s editor in chief extolling the virtues of all Fords. And to have a note on the back page that it was “just an ad.”

So — is Aussie Soles worth your time? Or Untapped Wealth? With all the great investments in the world I would certainly never seek out one that uses a stock promoter to advertise itself like this — some such companies might be fine, but many more of them are stink bombs that exist just to be pumped and dumped by their promoters, so in my opinion there’s little reason to take the chance. I haven’t even looked at the company’s financials, there’s no point in doing so.

And I can say, after hearing all the 1,000%+ gains promised from newsletters everywhere, that if AUSE goes up 1,000% or more in the next year or two, as they say is “possible” in the ad, I’ll eat my hat. At least one in five of the newsletter ads I’ve covered promises the potential for 500%, 2,000% or higher gains — and no stock thus covered has ever done better than 400% at any point, with the majority of them actually having gone down or stayed more or less the same since they were touted. Something like 3-5% of them have made it as far as a 100% gain at any point during the past year. And those are the stocks that are touted for their investment potential (and, to be fair, their attractiveness as “stories” that can be sold to you), not those that are touted for a fee (as far as I know).

I would have said, if you had asked me yesterday, that Untapped Wealth has made some decent recommendations, and I know it has some satisfied customers — but after their decision to participate in this particular ad, I’m much more suspicious of everything they do. If I were a subscriber (I’m not, I don’t subscribe to any investing newsletters because it would be hard to write fairly about the business if I did), I would cancel that subscription today, along with anything else published by Trinity.

Perhaps in a bit of “coincidence”, they’ve apparently slashed the subscription price of the newsletter in conjunction with thi ad — the normal price is $99, last time I checked, but it’s offered for $19 on the special landing page for this particular ad. So maybe they’ve given up on the “independent stock newsletter” game and are going to just be paid touts now, with a $19 subscription price as window dressing. Or maybe this is just a crazy test to troll for new subscribers in a new way, though that doesn’t make it any more acceptable in my mind.

That’s all just a guess, they didn’t claim that the stock in this “ad” was directly part of the Untapped Wealth portfolio, and I certainly don’t know what their plans are (if they want to share them with me, I’ll let you know).

Here’s a little excerpt of what Tim Fields wrote for AUSE, in case you’re interested:

“Stop whatever you’re doing and check the stock price of Aussie Soles, symbol AUSE. If it’s still selling under $2 or 3, move fast!

“Here’s what’s up…

“Aussie Soles, previously with sales of just $1 million annually, has been diligently preparing for what will be one the biggest global rollouts in shoe business history.

“They could easily get a 100 to 200 fold increase in sales. And early shareholders could see a 15-fold increase in their investments.”

And here’s the longer form ad, which also includes a video clip. Makes a somewhat compelling case, if you believe that the analysis and the “Untapped Wealth Buy Signal” is unbiased. The $300,000 takes away that belief for me.

Here’s the part of the disclaimer that caught my attention — in small print at the bottom, naturally:

“This featured company sponsored advertising issue of Untapped Wealth does not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as a recommendation by Untapped Wealth or an offer or solicitation to buy or sell any security. Aussie Soles, hereon AUSE, the company featured in this issue, appears as paid advertising, paid by Sujon Limited to provide public awareness for AUSE. Sujon Limited has approved and signed off as “approved for public dissemination” all statements made herein regarding AUSE’s history, assets, technologies, current as well as prospective business operations and industry information. Untapped Wealth and Capital Financial Media (CFM) have used outside research and writers using public information to create the advertisement coming from Untapped Wealth about AUSE … CFM has received and managed a total production budget of $300,000 for this and other online advertising efforts and will retain any amounts over and above the cost of production, copywriting services, mailing and other distribution expenses, as a fee for its services. Untapped Wealth is paid $2,000 as an editorial fee from CFM and also expects to receive new subscriber revenue as a result of this advertising effort.”

Sorry to bore you with all of this — I rarely post articles here when I don’t have an interesting investment idea to dissect, but I was, perhaps naively, very surprised to see this ad. Investment newsletters have nothing to stand on except their integrity as stock pickers, and their push to provide good advice to their subscribers (and, of course, their ability to market themselves) — many of them aggressively argue that they are the real independents in a world that is awash with conflicts of interest.

If that integrity is for sale, and they’ll promote companies for cash, then I can’t imagine why anyone would subscribe to that newsletter. It’s certainly not true that any one newsletter has been proven over time to be the absolute best, and to be the best match for every subscriber (though there are several that have consistently good long term records, according to Hulbert … Untapped Wealth is not covered by his service).
I know many of you hate the marketing tactics of lots of these newsletters, even the best ones, and their consistent up-selling and their “special offers” for great products from their colleagues, all of whom seem to be owned by the same umbrella businesses. Some of you hate the ads that run in this space, too, and that’s certainly your right. I can see how all of that is an irritant.

But I also think that almost every newsletter editor would jealously protect his independence and impartiality when it comes to actually recommending stocks under his own name for his (or her) subscribers and potential subscribers. But recommending and touting a stock in exchange for money from that company puts you down at the bottom of the pile, in my opinion, down there with Marl the stock picking robot and the gang at promostockpicks.com. There’s a lot of company at the bottom of the pile, sure, but that doesn’t mean it’s where you want to be.

Happy Investing, everyone.

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27 Comments on "Untapped Wealth Pushes the Envelope … in a bad way"

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Stan Kolker
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Stan Kolker
May 17, 2008 10:25 am

Hi, What do you think of Personal Finance newsletter picks? Neil George is the editor. Thanks

Wayne
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Wayne
May 17, 2008 10:28 am

Amen, brother… 🙂

EYOUNG
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EYOUNG
May 17, 2008 11:06 am

Good points, Travis,,,
Agora and Newsmax both note that some of their material is paid advertising, as does Small Cap Investing. While interesting, I have to wonder about some of these companies, i.e., ULBI, etc, and VOLC is on my watch list,,, Once in a while I check how it’s doing, but have not seen anything that would really grab my attention / money!

DAVID HATHAWAY
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DAVID HATHAWAY
May 17, 2008 11:19 am

S.G.

Two years ago when I was young and dumber, I spent
$500 for 1000 shares of a similarly advertised/hyped stock. It is now worth an astounding $9. Seems I bought at the zenith of this 1000% surefire investment.

Not so young and a little less dumb.

G IMBURG
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G IMBURG
May 17, 2008 11:42 am

I enjoy analyzing Tim Fields recommendations, but a word of caution is necessary when reading his picks. His use of adjectives and descriptions of future gain is a bit overblown and I am not aware of any time machines or crystal balls that he owns. This being said, he does isolate some interesting stocks for consideration. Dont lose common sense and always consider the risks of doing business.

TV Guy
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TV Guy
May 17, 2008 12:12 pm

When we all get those irritating “up-sell” offers from these newsleter guys it is truly annoying…especially when the meat of the letter is filled with hyperbole and bold (usually false) claims. That’s why folks…we all RUSH to open the Gumshoe notations from Travis…because it’s the “straight goods”…and indeed written in a refreshing straightforward manner. If you have invested money in silly letters….then how about coughing up some for this great service?
Disclaimer: I am not related to The Gumshoe not do I know him…I am just one of those orsinary honest investors trying not to get “snowed”.

Mowgli
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Mowgli
May 17, 2008 1:41 pm

Hey Gumshoe,

I was looking for a few Magazines to pick up & was just wondering which ones are on your shelf?

Gravity Switch
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May 17, 2008 2:02 pm

Hi Mowgli – I subscribe to Barron’s, the Economist, Portfolio, and Smart Money, though I end up reading many of the other biz mags, too.

Thanks for the kind comments and useful insights,all.

Ralph
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Ralph
May 17, 2008 2:07 pm

Thanks for you honest unbaised opinion. I was half tempted to try (AUSE). My problem is I trust and believe most people. I would like to thank-you for your great thoughts and opinions. I guess thats why I joined your group here.
Can you or anyone here recommend a program that does a good job of picking Options? And at a reasonable cost?

Steve Benedict
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Steve Benedict
May 17, 2008 2:29 pm
Actually, Aussie Soles is doing what the financial “newsletters” have been doing for years. They have a large position in the stock that they got for cheap, then they promote the hell out of it so they can dump it at a much higher price on us poor unsuspecting fools, I mean “readers”. I’ve gotten really burned on 4 stocks until I figured out what the game was. My returns on those 4 stocks? -77%, -75%, -47%, and my top performer: -34%. (Range Resources of Australia: “could be $8.00 by October!!” is now at 18 cents.) I think the best… Read more »
tony carmen
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May 17, 2008 3:02 pm
AS THE GREAT AMERICAN HANNITY SAY’s THANK YOU GUMSHOE, YOU INDEED ARE A “GREAT AMERICAN” I have lost faith in our gov’t .PERIOD I took the EAGLE off the flag pole and replaced it with a “VULTURE” now when I wake op in the morning and look up at the VULTURE I feel much more AWARE_ALERT LESS DEPRESSED a struggling,surving citizen ready to tackle the negatives . the stock market is a cesspool GET THE HELL OUT IF YOU ARE NOT edgucated or join a STOCK CLUB I COULD SEE IT NOW “THE GUMSHOE STOCK CLUB”KEEP UP THE GREAT WORK… Read more »
SageNot
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SageNot
May 17, 2008 3:04 pm

Hmmmmmmmmmmm http://finance.yahoo.com/q?s=AUSE.OB
had huge upside volume yesterday, closed on it’s high, NOW WHAT?

Is this their website, or a knock off? http://www.untappedwealth.com/newsletters.html

There is no mention of Tim Fields or Eric Dickson.
http://www.untappedwealth.com/about-the-authors.html

Suddenly I feel a bit foolish, has google mis-led me again?

SageNot

Gravity Switch
Admin
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May 17, 2008 3:12 pm

I haven’t looked at the stock at all, but would assume that the promotion is probably bearing fruit if it’s at its high.

I think the website is actually untappedwealthonline.com if memory serves, but I’m on my phone and can’t easily check just now.

Tim
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Tim
May 17, 2008 3:36 pm

Hey Gumshoe,

I subscribe to Bill Bonner’s rants and thoughts in the Daily Reckoning (free);
Been a subscriber for several years, but never bought any stock based upon their recommendations (at least not yet); They seem to offer some pretty solid leads, but oftentimes comes with teasers to their affiliated newsletters, some you’ve covered in your space. What’s your thoughts on them? Thanks.

SageNot
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SageNot
May 17, 2008 3:41 pm
Right you are Travis, I just knew I was in a “no win” site that just resembled this site. http://www.untappedwealthonline.com/ No sight of the $19.95 offer, that I would’ve liked to have seen for posterity sakes. BTW, speaking of advertizers, you have one that has tried ripping me off before I joined you here. I won’t name them for obvious reasons, but if you are unaware of what they are capable of, just ring me up or use the gmail.com addy for a private communication, OK travis? I know you rely on ads, & you might shed some light on… Read more »
Dividends4Life
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May 17, 2008 5:13 pm

I have received a few of these “newsletters” that are actually just ads for a company. However, I don’t think I ever received one from a company that puts out a real newsletter. The others were just made to look like newsletters. I agree this stinks, from an ethical standpoint.

Best Wishes,
D4L

flyfishingolfer
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flyfishingolfer
May 18, 2008 6:55 pm

Tim, I subscribe to Bonner by way of Outstanding Investments newsletter. I have been pleased with their recommendations and Hulbert ranks them as #1 for the most recent 5 yr. period as compared to all other newsletters ranked. Bonner is a very interesting writer and I enjoy reading his rants. Their documentary just released (I think) is one that I am looking forward to viewing (I.O.U.SA).

FFG

raj
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raj
May 18, 2008 9:59 pm

gumshoe u and your site r simply incredible! thanks !

GCH
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GCH
May 19, 2008 1:12 pm

Hi guys,
1st time drop by here, notice the title about the dailywealth searched by google…I did not subscribe any paid newsletter yet…but from what i observe these few months, the teaser did indirectly hook the subscribers up who is retired and encourage them to put their savings into their so called ‘secret investment strategy’ or huge dividends opps to gain the profits….it make me a bit sick to take further look because the hyperbolic and unreal statement…happy to know here got the discussion about that annoying newsletter…Good works, Gumshoe

Glenn
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Glenn
May 20, 2008 8:06 pm
I used to subscribe to Tobin Smiths “newsletter” and had so-so possitive results with his portfolio. I wondered if he actually held the possitions he touted, then I tuned to Fox and heard him mention some of his more successful picks on “Bulls and Bears” and figured maybe he was not on the take.. I don’t subscribe any more and now get all kinds of offers on ancillary publications promising returns that seem …..to good to be true; so I’ve learned to used that as my mantra-I temper my greed with an equal portion of realistic expectations and do some… Read more »
leacy
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leacy
June 19, 2008 2:01 pm

I have had great success with vector vest. I’m up 30% this year.

leacy
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leacy
June 19, 2008 2:03 pm

It seems to me that many of the AGORA publications are all related.

Computer Guy
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Computer Guy
October 28, 2008 8:50 pm

I have been reading the free Agora newletters for years, and aside from all the advertising of their paid newsletters, I enjoyed them. So I bit, and subscribed to Outstanding Investments,
Capital and Crisis, and Penny Stock Fortunes. I find that they come up with a new newsletter nearly every week, the ads promise to tell me about the lastest wonder stock in that category if I subscribe to the newsletter. I’m hoping the inexpensive ones I have will help me keep my IRA afloat.

Suckers
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Suckers
November 18, 2008 4:29 pm

Just wondering if any of you actually invested in Aussie Soles (AUSE) by way of the news letter that was mailed out? I just can’t see why people actually think they will make money from these advertisments??? Well, other than the people who create and mail the ads. It’s one big a$$ scam. Read the fine print. AUSE is now trading at $0.05 just curious…

Bigg Fredd
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Bigg Fredd
November 10, 2010 2:15 am

Just another datapoint: yahoo shows it last traded for .05 Nov 17. Today is Nov 10, so that was almost a year ago.

Ruben lerma
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Ruben lerma
February 4, 2013 1:39 pm

I was taken by Mr. Tim and bought 2,000 shares of XCELL at US$.80 and was too late to cancell realizing it was “pump & dump” scenario. The stock has dropped from $.80 to $.10 at times and have done for the past year. Folks like you are doing a good job of disclosing companies like Trinity. Too late for me.
Ruben

ruben LermA
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ruben LermA
February 4, 2013 1:39 pm

I was a victim of the “Buy & dump” through their advertising of XCELL which promised the company a really unrealistic return. You folks are doing a great job of exposing firms like Trinity.
I will never listen to their advise. They are bad news.

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