Now this one sounds exciting, eh? I don’t want to say that the mighty, mighty Gumshoe is a lazy man, but I must admit that the idea of a work week that lasts only ten minutes has some appeal … what the heck are they talking about?

It’ll take me longer than ten minutes, but come along for the ride — we’ll figure it out.

The ad is for Extreme Value, the newsletter edited by Dan Ferris, part of the Stansberry & Associates family, and the letter comes from George Rayburn, the publisher thereof. They’d like $800 a year to share this newsletter with you (I haven’t actually seen the newsletter, but I have written about it several times — he finds some nice “deep value” companies, though some of them stay “cheap and undervalued” for a loooong time, or get cheaper — the curse most value investors must bear).

And I’m not sure that I can dig through the clues to reveal every single thing in this ad, since a few of the clues are too weak to confirm, but I can tell you what the “ten minute work week” is, and what hte “greatest business in America” is … just come along for the ride, won’t you?

Here’s what they say about the idea of investing in “ten minute work week” businesses:

“So what kind of business is this?

“Legally obligated to send you hundreds of dollars a month

“The greatest business in America is not a “home-based business” opportunity.

“You don’t need to buy any products. Make or manufacture anything. Or store anything in a warehouse.

“Even better, you don’t need any special skills… an advanced education… or a lot of money.

“Heck, you really don’t need a phone or computer.

“To get started, it will take you just 10 minutes a week.

“You can do it anywhere in the world… at home in your bathrobe and slippers… on vacation… even while you’re sleeping.

“And you will have plenty of free time to do whatever you want — sailing, fishing, painting, hiking, you name it.

“That’s the secret to the greatest business in America:

“As long as people come home from work… send their kids to school… and deliver things across the U.S…. you get paid.

“By law.

“In other words, thousands of people all over the United States will send you a check for a few hundred dollars, several times a year.”

“Greatest business in America” — sounds pretty good, no?

To help whet the appetite and build the argument, there are some testimonials that throw in real peoples’ names, and use the reputation of big publications to make it seem more legit:

“Take Barry Slagle, a retired clerk from Contra Costa, California…

“Barry told the New York Times, ‘[The 10-minute work week] has been the biggest single influence on my life, by far.’ He now flies to places like Hong Kong and Paris, and plays golf twice a week. The Times adds: ‘He has several million dollars, and savors his good fortune daily…'”

The copywriters are trying to outfox the Gumshoe, it appears, because they went so far as to change the name from the quote — he’s actually Bill Scargle. Close enough that they can claim it was a simple error, different enough to slow you down in your search for answers.

And the “Ten Minute Work Week” — well in this case, as in that redacted quote from the New York Times, that is just …

Berkshire Hathaway (Do you even need the ticker from me? It’s BRK.A or BRK.B, depending on whether you want to put up $116,000 or $3,800 for a single share).

(If you want to see that NY Times article, which is just about some of the Berkshire Hathaway-created millionaires, it’s here — from the NY Times, May, 2, 2004. Don’t worry if you don’t feel like reading it, they don’t mention anything like a “ten minute work week.”)

But it gets better — this isn’t necessarily a tease for Berkshire.

There’s another quote from someone who’s using this “ten minute work week” to rake in millions. Here it is:

“Or John Gaitherson, from Connecticut. He used to earn a living pumping gas and cleaning boats. Thanks to his 10-minute work week, according to BusinessWeek magazine, he now lives in a spacious apartment on New York City’s Park Avenue (average price, $3.5 million), “with little of the ostentation that often accompanies the $22 million lifestyle…”

This one is almost laughably misleading — “John Gaitherson” is actually Jeff Greenberg, son of “Hammerin’ Hank” Greenberg, the man who built AIG into an international insurance powerhouse.

Jeff Greenberg did work as a teenager pumping gas and cleaning boats, though it was probably because his dad wanted to toughen him up and get some humble roots so he wouldn’t become a spoiled rich brat, but he’s being mentioned in this teaser because he became a millionaire CEO in his own right as the head of Marsh and McLennan (MMC), the huge insurance broker.

And in case you don’t remember those MMC scandals from a few years ago — and I wouldn’t blame you, they seem so paltry compared to today’s financial fiascos — he was forced out as Chairman and CEO of Marsh and McLennan right around the time that article was published, in 2004.

(if you want to check out that Business Week article, even though it has nothing to do with this 10 minute work week idea, it’s here — from November 2004.)

So are you getting the picture?

It continues — they say that this business is “fat and thriving” according to a Forbes profile of one particular fast-growing company. That company was started by Charles Parker (they don’t mention that this was back in 1894) or that the article describes it as an “insurance racket” — this is First American, the title insurance company (the article, if you’d like to check it out, basically explains what a scam title insurance is, in general, because they pull in so much money for doing essentially nothing, and almost never have to pay a claim).

So I think that we can conclude that the “Greatest Business in America” is … insurance. And almost any kind of insurance-related company. No argument there. If you’re good at it, like Warren Buffett, you essentially get to borrow money from people, invest that money, and be paid by the lenders for the privilege of lending you money (that’s a simplification, of course, of the “float” that is the leverage which makes insurance companies profitable — the money they take in in premiums but don’t have to pay out anytime soon, or sometimes ever, in claims).

And all that stuff about “required by law?” I assume that’s just based on the fact that many types of insurance are required by law or by contract — like your homeowner’s insurance, or car insurance, or professional insurance for any number of different kinds of professionals, from hair dressers to doctors to lawyers to truck drivers. These aren’t optional business services.

But what does that have to do with a “ten minute work week?”

We’re going to have to keep working. This has been much more than ten minutes already, sorry! I hope you read faster than I write.

How do we make money from insurance? Well, Dan Ferris tells us that we could get our own insurance license — using a form like the P.L. 103 in Nevada. I can’t imagine you’re interested in doing that. Or you can buy into someone else’s insurance business.

But obviously, this is an investing newsletter, not a “start your own business” newsletter. So the key is investing somehow, right?

“The good news is, there’s an even better way I haven’t yet mentioned.

“The best way — the way I want to show you — gets you all of the upside… and you won’t be required to do even a single minute of work.

“Well… it may take 10 minutes total to get started, but that’s it. You’ll never have to worry about or think about this business ever again.

“You can do it anywhere in the world, no matter where you live… what time of day it is… or what you’re wearing…

“Best of all, the checks will keep rolling in, and a portion of this money will be deposited into your bank account several times a year.

“The money you can make is huge and absolutely unlimited.

“Let me show you what I mean…”

The ad goes on to provide several more examples, and sort of show what Dan Ferris means when he talks about these huge returns.

Of course, he just thinks that you should buy stock in a great, undervalued insurance company and hold it forever — and hey, if you’re lucky and that insurance company happens to be Berkshire Hathaway in the 1970s, Bob’s your uncle and you can enjoy a retirement of ridiculous wealth.

If it was AIG in 2000, well, maybe you’d have a bit of a problem. AIG has been above $70 a few times in the last couple years, and it was still called the greatest insurance company in the world, with exposure to emerging markets and a great business that could grow forever. Late in 2000, the shares almost hit $100 at their peak. The shares go for $16 now.

He mentions that there are 172 of these publicly traded companies — which is sort of true, there are 172 companies in the Best’s Global Insurance Composite Index. There are three different insurance sector ETFs — KIE, PIC, and IAC, just in case you’re interested. I don’t know which indexes they use.

But he also mentions that there are three companies he thinks are the best particular bets in the insurance industry. He gives almost no clues, but let me see if I can at least make some wild guesses for you.

“Three (3) of them have the potential to outperform all the others:

” * 10-MINUTE WORK WEEK BUSINESS #1 is based in Houston, Texas. Shareholders in this business have made 1,373% so far…

” * 10-MINUTE WORK WEEK BUSINESS #2 is based in Greenwich, Connecticut. Started by two college classmates — with just $2,500 — if you got into this business early, your share would be up 3,815% today…

” * 10-MINUTE WORK WEEK BUSINESS #3 has offices in Maryland Heights, Missouri, and Wayne, Pennsylvania. One shareholder in this business, Gibson Carl of California, got in for just $340 — a stake which has gone up 32,268% since then…”

So … those clues are not really enough for me to have any kind of certainty for you, even though it shames the mighty Gumshoe to type those words. But I will throw out some wild guesses, just for entertainment:

#1: How about Stewart Information Services (STC) — this is the parent of several title insurance companies, for the most part, and we know that this is a fat city business as long as no one looks behind the curtain or notices the naked emperor. The shares did go from about $5 in the early 1990s to about $50 in 2006, but they’re now going for about $22. On earnings they don’t look cheap, but if you look at the book value they look like a screaming bargain (.57X book value).

I have no idea if this is one of Dan’s picks or not, as I said, it’s just a guess. And I don’t know anything much about the company, either — for all I know, it may be covered with hair and algae and old gum from under the benches at the bus station. But it is an insurance company, based in Houston, in a cash-generating business, at what some would call a value price. Caveat emptor.

And #2? This one is tough, too, but I’m pretty sure it must be WR Berkley (WRB). This is headquartered in Greenwhich, CT., is is a cheap insurance company, and it was founded by two college classmates. William R. Berkley started the predecessor to this firm, Berkley Dean, with a fellow student while he was at Harvard Business School about 40 years ago. Not sure who the Dean was. This one is more clearly cheap from a valuation perspective — a PE of less than 7, like most property and casualty insurers it trades at a bit of a premium to book value (1.18 in this case, less than most similar companies typically trade for). I don’t know anything about their prospects, or whether they’re a great investment for you, but I’m fairly certain that this is the one Ferris is touting.

#3? Well, another toughie — those two towns are just suburbs, of Philadelphia and St. Louis. And lots of insurance companies have offices in one or the other, or both. At this point, I’m not even sure if I care what company this is — I expect you’re in a similar boat, eh? Companies loosely connected to insurance that are headquartered in those two towns could be Express Scripts (MO), which you can’t buy anymore, and SunGard (PA), which is private, though you can buy their bonds if you want. This is just about offices in those towns, not headquarters, so I’m just going to pitch out a wild guess: Allstate (ALL)

They’re in insurance, they’re cheap, and they have agents in both of those towns. That’s a wild, wild guess, but Allstate actually has some things going for it if you like this kind of business — it is way down on the year, but has held up better than many companies in insurance and related businesses. And it’s cheap on forward valuation, it’s got a good brand name, and a nice yield of 3.5%. They trade at about 1.26X book value, similar to WR Berkley and a bit lower than Markel, just to give a little perspective.

And just for grins, #3 could always be Berkshire Hathaway, too — they own companies in insurance that operate in both of those communities. Just to make clear that there’s no way I can know this one for sure without cheating.

So, those are some potential stocks for you to look into if you like, but I can’t really promise that I’m right this time — I’m pretty sure about WR Berkley, but the other two are wild guesses. And in case it matters to you, that’s probably the first one I’d look into if I were searching for another insurance stock (at least, out of these three — I actually would probably buy more Markel or look at Alleghany before I looked for another company, but that’s just an “off the top of my head” thought).

Now, investing in insurance companies is nothing new for Dan Ferris — he, like many other value investors, has touted insurance companies as a great, out of favor investment many times before. Back in 2004, he wrote for the Daily Reckoning about how the hurricane losses of that year were a great opportunity to buy insurance companies.

And for the most part, I agree with him — there are big cycles in the insurance business, particularly in the property and casualty insurance business, and when big losses hit and they pay out huge claims, as for hurricanes or other disasters like 9/11, the stocks not long after tend to become good investments. That’s because after they pay out those claims (assuming they’re well covered for risk, and the business doesn’t sink), the competition in their business fizzles out and everyone raises their rates.

Warren Buffett has said publicly several times that this current year will not be a good one for insurance — competition is up because it’s been a little while since the last big disasters (Katrina and Rita) that hit lots of insurers, and people are bidding for business that Berkshire Hathaway doesn’t necessarily think will be profitable. The folks at Markel have said much the same thing, that they’re not growing all that fast because they’re waiting for better rates to come. This is a change from last year, when post-Katrina insurance rates went way up and the claims were very low, so these companies were hugely profitable. (I cite those two companies just because I own their shares and am a bit more familiar with them. Berkshire is clearly a leader in property and casualty insurance, but Markel is quite small in comparison.)

If you’re looking into insurance companies, there are a couple things you need to consider that you might not have worried about five years ago. You have to figure out what investments they hold, at least in a general sense, and whether they have any of those good ‘ol collateralized debt obligation bonds or other structured investments that are tough to value right now. Markel, for example, which I own shares of, has said that they did not “reach” for the few points of extra income and buy these riskier bonds, and many other insurance companies didn’t either, I’m sure.

This is as opposed to AIG, which loaded the boat with them and has been sinking all year. So we need to be careful about what insurance companies hold, and how they invest. You should be able to learn about this by reading the annual report and listening to conference calls, which hopefully will include the head of their investment strategy.

Otherwise, there are a few good articles at the Motley Fool that explain insurance float and premiums, which should help you understand the kinds of things you’re going to read in insurance company releases and reports.

So there you go — your “ten minute work week” will be when you’ve got a big portfolio of insurance stocks in your account, and you just check in on them for a few minutes each week, or add a bit more cash to your account, and watch your account reach the stratosphere over the next decades.

As long as you pick the right ones.

full disclosure: As noted above, I do own shares of Berkshire Hathaway and Markel. I do not own stock in any other company mentioned above, and will not trade in any stock mentioned for at least three days.