This article was originally posted on July 8 as part of the Friday File for the Irregulars. It has NOT been updated or revised, but we’re re-sharing it here and opening it up to all readers because we’re seeing the same ad again in heavy circulation from Dr. Kent Moors (still with a June 2016 signature line, so presumably the ad is also unchanged). Enjoy!
Dr. Kent Moors has a new ad rolling for his Energy Inner Circle ($1,950), so we’re getting questions… and since it’s Friday, our answers go to our friends in the Irregulars. No big news on my portfolio this week, or updated thoughts on our other stocks to speak of (except for REIT equity offerings… pretty much every REIT is reaching almost absurd pricing levels now thanks to low interest rate expectations, so much so that they’re almost all raising capital, but REITs and gold continue to provide pretty solid ballast for diversified portfolios so I’m not selling these high valuations just yet)… so we’ll dive right into the teaser solution…
Moors comes in with some checkered history in the annals of Gumshoedom — both because of the picks he has shared in the past year or so, and, to be fair, because his publisher has been hyping those picks up and advertising them more heavily than just about any other publisher out there, and trying to make it appear that he’s the king of the energy world and can do no wrong. Which, when the stock you’re hyping as the next huge winner goes bankrupt (like SunEdison), likely leaves your subscribers with a nasty taste in their mouths.
But part of our goal here at Stock Gumshoe is to give readers the chance to focus on the investment, not on the pitchmen behind it — overpromising and ridiculous hype by newsletter ad copywriters doesn’t make a stock bad unless you believe the crazy promises, and sometimes the investments have some real potential if you can keep your expectations more realistic. So you can apply whatever skepticism you like (skepticism is one of the few really valuable superpowers in an individual investor’s arsenal), but let’s see what he’s touting these days and give ourselves the opportunity to think on those ideas.
And speaking of overpromising, here’s the headline from Dr. Moors:
“The Great Saudi Oil Jihad just handed you the biggest energy play of the last decade…
“Now you can turn your next two paychecks into $109,845 or more… in one simple move.”
I guess the level of hyperbole depends on just how big your next two paychecks will be, but, as we learn later in the ad, Moors is clearly talking about some pretty high-leverage investments and he’s using $2,500 as his “initial investment” to get to that $100,000+ profit… which usually means highly levered and speculative bets on options.
And he’s got bets on both the bullish and bearish side, which very likely means that he’s recommending buying put options on some stocks and call options on some others. Here’s a little taste of the ad so you can get an idea of his big picture pitch:
“… for as long as I’ve been in this business, I’ve seen the situation we’re in now exactly TWICE…
“The first time was back in the 80s when oil plunged 67%… and turned 54% of U.S. oil companies into dust… and handed the companies that were left the entire oil market on a silver platter.
“The second time is unfolding right now.
“And no, it’s not ‘different this time.’ It never is.
“Of course, no two markets are exactly alike… but it’s my firm belief that the underlying boom/bust cycle is always the same.
“Now we’re looking at the single greatest set of investment opportunities I’ve ever seen…
“Much bigger than the ones I witnessed over 40 years ago… the last time the Saudis destroyed oil prices like this.
“And with the research I have in my hands right now, I believe I can tell you with confidence who the winners and the losers are going to be in the next 12 months.”
I will withhold my belief on that, but let’s hear him out…
“You see, the money in the oil patch works the same as it does everywhere else in the world.
“You either have enough cash flow to execute your business…
“Or you go bankrupt.
“And after all your competitors are wiped out, you feast like a king, quadrupling – and sometimes sextupling – your market share and profits….Are you getting our free Daily Update
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“Let’s face it, there’s big money to be made right now…
“But only if you understand with absolute conviction which oil producers are strong enough to weather this epic crisis – and who is heading for the ash heap of bankruptcy.
“That’s why for the past nine months my research team and I have been tracking the real-time numbers from over 45,000 data points covering 132 publicly traded oil and gas producers….”
“You could make money two ways:
- First, on the downside, actually banking immense, repeating gains with one simple technique…
- And then on a different type of trade as the shares of the survivors rebound and go berserk, which I believe they most definitely will.
“In fact, you have an opportunity right now to snatch up some of the best oil companies on the planet at rock-bottom rates… grabbing shares at up to 90% off where they SHOULD be trading at.
“So if you’re one of a small group of readers willing to take advantage of what I’m going to show you today…
“Get ready for your shot at what could easily be the biggest payday of your life time.
“It’s so big, it could transform every $2,500 you invest into $109,845 with just a handful of moves I’ll explain in a moment.”
Moors says that of the 132 companies he’s following, 53 are so “starved for cash” that they’re likely to go belly up, adding to the 21 bankruptcies last year.
And that he has identified how to trade some of these to profit from the falling price… more from the ad:
“These Trades go UP when Oil Companies go DOWN.
“Now to be clear, we’re NOT suggesting you invest in failing companies.
“In fact, the move I’m going to show you is not an investment. It’s a trade. Plain and simple.
“What I love is that, the gains potential is almost always EXPONENTIAL, especially in situations just like this.”
So we’re starting with his bearish bets… what do