“Buying PURE gold bullion for $421 an ounce while retail investors are paying $1,700 for the EXACT same gold?”
That’s the promise from a recent ad for GoldProfitFormula.com, and, though it turns out it’s not a pitch for a stock this time around, I thought I’d spend a few minutes on the ad — in part because I’m seeing it sent out on a lot of newsletter lists and my delightful readers are asking.
It’s one of the interminable video ads that doesn’t have a handy dandy transcript behind it, unfortunately, but I’ll share a few quotes with you — the narrator is an aw-shucks Texas guy (or voice actor, dunno), and he pitches his story thusly:
“A few weeks ago a young reporter brought me a story that made my B.S.-o-meter ping at 9.5….
“buying pure gold every day for between 30 and 60 cents on the dollar…. using an old loophole he had uncovered 25 years ago in the jewelry business.”
He then spins a tale of going out to visit this guy who “discovered” the jeweler’s loophole, a story that hinges on the lush description of how freakishly wealthy this dude is, including tales of the multi-million dollar home, the pristine golf course, and the uber-fancy cars in the garage.
Which reminds me of one of the old Gumshoe rules: If they put a picture of a yacht or a luxury car in the ad for their newsletter, RUN AWAY.
And yes, there was a picture of the guy’s vintage Lincoln convertible, so you would be wise to consider that whatever service they’re selling may well be propped up on greed without much of a basis in real life … but the narrator’s description of the wealth of our modern-dray Croesus did send the taste buds a watering, just a little bit, so we’re going to try to figure out what they’re talking about for you anyway … even if they did break one of the rules.
If they show a picture of the guy’s young third wife in a bikini, or if he’s at the helm of his yacht, we might just start gagging too hard to continue. So keep your fingers crossed that they’re able to maintain some decorum.
Close one, by the way — the ad mentions the gold guy’s 20-years-younger wife, and his swimming pool and man cave. No more photos or wealth porn yet.
Then, apparently, in this “man cave” of his, he started to tell his spiel about how he got so stinkin’ rich — after being a failing jeweler in Missouri, he “discovered” how to get people to sell their old jewels and valuables to him at 30-60% of market price when they needed fast cash (that’s the $421 he keeps mentioning — though that’s less than 30% of the current market price by quite a bit, so perhaps the copywriters got this story started when gold was at $1,400? Don’t know, this is the first I’ve seen of it).
And yes, I know, we’ve all seen the big “we buy gold” outfits and the local jewelry stores who advertise about buying gold on your local TV news — apparently this gold expert says that those ads are “just helping him grow his wealth” because they try to “steal” the gold for as little as ten cents on the dollar … “they just piss people off, then they find me.”
So this guy thinks that he’s getting rich buying old gold jewelry because he doesn’t have high overhead (no advertising) and can make just as much profit as the big advertisers without lowballing sellers, and because, unlike cheap employees of the mall kiosks he can “think” and pay more for valuable stuff.
After that, it’s a pretty straightforward story about how someone built a business in used gold — he says he “goes where the money is” by lurking at estate sales and bankruptcy sales, and by looking for divorce lawyer referrals (I’ll admit I didn’t think about the divorce lawyers).
And he said the secrets are “in the math” — partly because most people don’t know how much gold is in 14K gold, for example. And he makes lots of money buying scrap, junk from old computer circuit boards and other harder-to-refine stuff that includes gold and can be bought cheap. “Scrap gold is everywhere,” we’re told.
Which is a similar pitch to Frank Curzio’s spiel about “gold fracking” that I wrote about for the Irregulars last week — with commodity prices high, recycling is at more of a premium, and becomes more profitable.
He also spins a quick “Antiques Roadshow” story about a dozen different items that were bought at scrap prices but later sold to dealers or collectors for massive amounts of money (ie, a rare stone in a silver ring bought as scrap for $11 was worth $3,600). And of course, you can also get scammed by buying fakes.
So what, then, are they selling you?
Well, unlike the normal teasers we usually write about these folks are selling you a “get rich quick” set in a box — some DVDs and CDs that have the transcripts of the “man cave” interview with the gold guy and his “secrets” for building your own scrap gold business, like places to look to buy gold cheap and, one assumes, refiners to use to process your scrap, and presumably other stuff like instructions for how to buy a testing kit and do the little acid tests that jewelers do to authenticate gold.
For this, they’re charging $77.