What is Lombardi’s “New Swiss Bank Account” teaser all about?

Sniffing out teaser solutions from Michael Lombardi's "Investing with Michael" letter

By Travis Johnson, Stock Gumshoe, December 4, 2014

Some people don’t realize that marketing for financial newsletters is at least as much about finding successful pitches that will catch your interest as it is about touting the latest and greatest stocks picked by a particular newsletter pundit. They often come up with a new ad to sell their newsletter when they’ve discovered an exciting new pick with a good story behind it …

… but at least as often, they simply continue re-sending the same marketing letter for years regardless of whether the stocks being teased are still the favorite pick of the newsletter editor (and in a few rare cases, we’ve even seen stocks teased in heavy promotional barrages that readers have told me aren’t even in the newsletter’s portfolio anymore). The goal is to get your attention and get you to sign up for a newsletter… so when they find a spiel that works, most of these publishers will milk it until it’s dry.

Today is a case in point — Michael Lombardi runs several newsletters, and for this Investing with Michael letter he’s been promoting his “New Swiss Bank Account” idea very consistently since he first ran the ads (or at least, since our network first detected them). That was in January, 2012, almost three years ago … and I continue to see them every few months.

Including today. And yes, the ad is virtually the same as it was in 2012. He’s still implying that this investment is on par with a “Swiss bank account,” with higher yields, and is backed by precious metals and other natural resources, and that’s still quite an exaggeration in my book. So for this teachable moment we’re just re-running that article.

And frankly, it’s still pretty accurate — the yields on these investments are similar to what they were then, mostly a bit lower now since they’ve gone up in price more than the dividend has been raised… and they’ve been pretty boring. It’s still remotely possible that he might have been teasing the preferred shares of these banks instead of the regular common equity, but I don’t think so — partly because there’s little chance for capital appreciation with preferreds and he teases potential for substantial gains beyond the yield they provide.

Over the last three years they’ve been relatively steady investments. Their dividends have not grown dramatically, and the stocks have not performed spectacularly well (they’re mostly up between 20-30%, ignoring the dividend, in the three years since this article first appeared, which is dramatically worse than the 60-80% returns you would have gotten from a basket of US bank stocks or from the S&P 500 during that time). And they still trade largely as a group, though not in complete lockstep.

But yes, the pitch is the same — want to see if you find it interesting?

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What follows has not been edited, updated or revised since it appeared on January 23, 2012. We’ve kept the original comments appended in case you find them interesting.
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The latest pitch from Michael Lombardi is for one of those “limited to our best customers” newsletters, something he calls Investing with Michael, which seems to mostly be a safety-focused large cap stock picking service. If that’s true then a thousand bucks a year is a bit steep, but certainly not unheard of — and that’s after they have, of course, “slashed” the price for you, their very most special-est customer.

Lombardi says that he’s an “investor, not a trader,” and that this service will supply at least six conservative investment picks per year… along with two special reports.

The report that’s catching the eye of my readers lately is called The New Swiss Bank Account: How Canadian Safe Haven Investments Pay 5.1% Every Year on Top of 44% Returns — so what’s he talking about?

Well, he starts off with a long diatribe about how Canada is the new Switzerland — with a stronger bankings system, better regulations, a pro-business government, great natural resources wealth to back their currency, no ties to the weak euro, etc. etc.

Here’s a taste from the ad:

“Yet, there’s a tiny group of investors who are not worried about the euro, dollar or any other crisis.

“That’s because they have their money safely tucked in the ‘New Swiss Bank Accounts.’ At this moment, they are enjoying safety, privacy, and security, along with Treasury-busting yields of 5% per annum and returns on capital exceeding 44%.

“That’s why …

“The Guardian Declares These Investments ‘The Envy of the World’

“‘This is the last safe country on Earth,’ I explained to a business associate on one of my recent trips to Europe. ‘Nobody is talking about this place, but you won’t find a safer place for your money—not even in Switzerland.'”

More? You asked for it!

“You also get privacy. This nation ranks nearly the same as Switzerland in banking privacy, according to the Heritage Foundation.

“And security. Though relatively tiny in population—with a smaller population than Spain and Poland—you won’t find a more stable and secure nation on the planet. It has a long history of pro-business regimes, from colonialism to independence.

“Not only are these ‘bank accounts’ backed by gold and silver resources, but they are also backed by oil and deposits, timberland, and mineral wealth. You can feel safe knowing your money is backed by precious metals and other valuable commodities.”

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He then goes on to “let the cat out of the bag” in case you hadn’t guessed, and clarify that yes, this “New Swiss Bank Account” is something to do with the Canadian fi