My experience in digging through these teaser ads over the past dozen years tells me that the super-expensive “premium” newsletters are no more likely to generate long-term returns than the “entry level” newsletters… but we’re conditioned to associate price with value, and $5,000 newsletters are simply out of reach for so many small investors, so our readers tend to assume that they must be better… that there must be some secret insight or stock tips reserved for these well-heeled subscribers.
And maybe there is sometimes, I don’t know, but it seems mostly to be chance — and publishers usually use the high-priced letters to recommend stuff that’s dramatically more risky and volatile… whether that means junior miners, or options and warrants, or hit or miss tech or biotech stocks, or even, in more recent years particularly, the “private placements” that small investors find so appealing (it’s Private! I’m an insider!)
There are a lot of small companies that you can easily write about to 500 friends without impacting the market too much, but can’t really recommend to 50,000 subscribers. So what you often get with the high-end newsletters, other than a jolt to your credit card statement, is a somewhat higher-touch experience (like staying at a Marriott instead of a Courtyard Marriott, perhaps), and a dramatically riskier set of investment ideas.
That’s a long intro to tell you that, yes, when a $5,000 newsletter has a widely-distributed ad touting the next big thing… readers tend to go a little bonkers with the notion that if it’s this much more expensive, the stock idea must be that much better! Woohoo!
And this week, the pricey letter banging on our e-door is from Frank Curzio, who’s pitching his Curzio Venture Opportunities service (currently “on sale” for $297/month, which would be about $3,500 a year… a pretty typical “sale” price for a $5,000 letter, no one ever advertises their letters at list price).
Most of Curzio’s previous ads for this newsletter have been in the junior mining space, which is not terribly appealing for investors at the moment unless they like that “let’s catch a falling knife” game — so it probably shouldn’t be surprising that he’s got a different idea to pitch this time: Land.
He starts out the ad by talking about his dad’s great success investing in Texas Pacific land Trust (TPL) 20 years ago, that’s the old railroad land owner in Texas that is now a beneficiary of lots of oil and gas royalties (and even after coming back down sharply in recent months, it’s still risen 100X in value since the late 90s).
The that leads into the new idea he’s teasing:
“Companies like Texas Pacific fly under the radar of most investors and brokerage firms. It’s an operator of land… sitting on property for years, looking to sell or lease it.
“And most land operators have strong balance sheets and rarely acquire companies. That means there’s no value for Wall Street to provide research on these companies, since they won’t generate investment fees….
“… there’s one under-the-radar land company right now that reminds me of Texas Pacific in the late 1990s….
“With humble roots in cattle ranching and fruit farming, this company now manages world-class properties… providing leases, utilities, and resort amenities.”
Hmm… leases, utilities and resort amenities sounds a little less sexy than oil royalties… but what else do we learn about this secret land stock?
“This company acquired tens of thousands of acres over 100 years ago. And right now its land is valued for pennies on the dollar. That’s incredible, considering the property is prime real estate—located in one of the most beautiful and prominent places in America.”
Frank says this might triple your investment, based on “super conservative estimates” when the value of the real estate is realized… and that the land is carried on the balance sheet at “a fraction of what it’s worth today.”
That’s been the case with a lot of the old ranch, timber or railroad companies who have massive land holdings — they carry that land on the balance sheet at their original cost, which means there’s “hidden value” that can be realized if they are ever able to upgrade or sell the land. I don’t know what the current state of accounting rules is when it comes to land, but presumably there’s still some stuff out there that’s worth more than its reported value.
Other clues? He says that he has already recommended the stock to Curzio Venture Opportunities subscribers, so it’s not a brand new idea — and that it’s up 11% since that recommendation “a few months ago.”
And, well, that’s about it… though he does also say he’s got a new “triple digit” opportunity to release in tomorrow’s issue (no clues on that one, sadly).
So let’s see what the Thinkolator says.
Ugh, the weather has been ugly up here — first I’ve got to find my other boot, which the dog keeps stealing, and slog through the puddles… then scrape a bit of ice off the Thinkolator’s hood, and dry the hopper so our clues don’t get stuck. But she’s a good old beastie and starts up on the first pull, so shoveling our clues in nice and slow works just fine and doesn’t disturb the neighbors too much. A little extra time to chew on this one, but eventually our answer does come out the other end: This is very likely Maui Land and Pineapple (MLP).
That’s not a 100% certain match, sad to say — but it’s the best one we’ve got so far. There are quite a few other old landholding companies who might feasibly match some of those limited clues, including Tejon Ranch (TRC) in Southern California, which has not had the opportunity to return 11% over the past six months (in fact, it’s down more than 25% since May, in what has been a pretty steady decline… and is just about at a two-year low right now)… or their near-neighbor, lemon orchard owner Limoneira (LMNR), which would have almost certainly been stopped out for Curzio in September when it dropped from $32 to now $24 but