Trump’s “Mystery Holding” teased by Oxford Club

"The Shocking Surprise I Found in Trump's Personal Stock Portfolio" -- What's the "secretive, under-the rader company with a stranglehold on a super lucrative niche" hinted at by Chris Matthai?

By Travis Johnson, Stock Gumshoe, July 14, 2016

Newsletter copywriters are no different from other marketers: they will do whatever it takes to get attention by playing off of something or someone that has celebrity or notoriety.

In the past that’s meant implying that some big celebrity investor has a connection to a “secret” stock or technique, or that someone high up in government (usually the president or a presidential candidate) is earning money using some secret idea that you can also profit from.

Adding Obama or Bush or Clinton to your headline gets it more attention, and it almost doesn’t matter whether you love or loathe the name used — what matters is attention, since the first huge hurdle that any advertisement has to leap is your indifference. Getting you to read a pitch, watch a video or even open an email is hugely valuable to a marketer. Getting you to open their proverbial door is more than half the battle, once you’re in the door they think they can talk you into buying both the rust-proof undercoating and the premium floor mats.

And now, of course, the biggest spurt of easy attention comes when you invoke the name “Trump” — even if, as we’ll see in a moment, the connection is tenuous or irrelevant. So that’s what the Oxford Club is doing now, hinting at a “secret stock” that Donald Trump owns (or owned), and implying that it’s somehow a big personal bet from the candidate.

The ad letter comes from Chris Matthai, and this is how it gets your attention:

The Shocking Surprise I Found in Trump’s Personal Stock Portfolio….

“… when one of the world’s richest men releases confidential information to the public about making money – loads of it – we sit up and take notice.

“Inside these pages is a disclosure with some very unusual content submitted by Trump one month after he became Republican candidate for president of the United States.

“You see, in order to get his name in the ring, Mr. Trump had to reveal all of his personal investments to the Federal Election Commission.

“Everything! And through our extensive financial network, we got a hold of it.”

You don’t need an “extensive financial network” to read disclosures from presidential candidates… Trump’s filing, which is not terribly illuminating, is right here and has been published by lots of folks. It represents what he disclosed in his conflict of interest filings with the the Federal Election Commission early last year, when he was first running for the Republican nomination.

And though I’m sure Trump will tell you that his stock portfolio is “fabulous,” he’s not wealthy or famous because he’s a great stock investor, and I have no idea what his portfolio’s performance is like when it comes to the publicly traded investments he owns… or who makes the investing decisions. None of his equity positions are of a meaningful size compared to the businesses he controls, almost all of which are primarily real estate (or golf) investments. Much of the income he reported earning comes from golf operations and condominium sales.

But as with the pitch we saw many months ago that was about General Electric, implying that GE was a great buy because it was Trump’s “Make America Great Again” investment, we’ll try to look past the silly Trump connection and give you the chance to look into the actual stock and make your own decision about the investing merits thereof.

What else does the Oxford Club tell us about this stock? A bit more from the intro, then we’ll get into the clues…

“According to The New York Times, Trump holds at least $78 million in assets in a portfolio of hedge funds, mutual funds, traditional stocks and a small amount of gold.

“But it’s his personal stock portfolio you’ll find most interesting…

“The government document I just showed you with his signature exposes every single stock Trump owned as he started his campaign.

“It reveals how Trump sold shares in a range of Fortune 500 companies – including Amazon, Apple, General Motors, GE and Microsoft – yielding him a gargantuan profit of $27 million in a single month!”

Trump did report that he sold some stocks at a profit, as described in this article, though we should take the claims with a grain of salt since this is all FEC reporting, not SEC, so the disclosures are not very precise — they’re just meant to show holdings that might be a conflict of interest for seekers of political office (and frankly, even SEC filings are not terribly illuminating in terms of guessing at the profit someone might have made).

Then we get to this “secret” stock:

“However, poring through the entries, something unusual caught my eye – just below the top tier.

“Hidden on Page 39, one company didn’t seem to fit the mold. It appeared at first to be an ‘outlier’ of sorts. But the closer I looked – and the more familiar I became with its business model – the more I came to understand why Trump was loading up on shares.

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“This ‘Mystery Holding,’ as I like to call it, is in Trump’s portfolio for one reason only: to win – and win BIG!”

OK… what other clues do we get about this “Mystery Holding?” This is what the ad drops by way o hints:

“Found It – a ‘Near-Perfect Stock’ for a Late Bull Market

“I’ve never met Mr. Trump, and we certainly don’t work together… so I have no idea how he found this gem.

“Perhaps an advisor whispered in his ear…

“Maybe he knows the company’s top management…

“But there’s a 99% chance you’ve never heard of it.

“This is a secretive, under-the rader company with a stranglehold on a super lucrative niche. It lies deep within a non-descript business park in California.”

And we get the good ol’ “secret” photo of a nondescript business park building that these newsletter ad copywriters love to toss out, since it gives you the feeling that you’ve hired a PI to do his in-depth research.

But you know what, I have that huge research budget and the staff of PI’s on hand as well… so here’s the photo of that same nondescript building in a California office park that I’ve got for you:

gildhq

OK, I’ll admit, I just borrowed that image from Google Maps. Probably the same place the Oxford Club folks got their picture.

But yes, I do know what “mystery holding” it is they’re referring to — and after you see these clues, you’ll know too:

“Trump’s Mystery Holding is King of the Block

“According to Barron’s, this company blazed out of the gates to seize a commanding 94% share of its primary market today.

“That’s a virtual monopoly.Even the world’s biggest ‘category killers’ can’t make that claim…

“Apple, with its iPhone, owns just 40% of the U.S. smartphone industry.

“Google commands only 64% of the organic search market.

“Okay, so Trump’s Mystery Holding has tremendous penetration in its initial market….

“It is breaking one sales record after another. The Wall Street Journal reports its top two products posted remarkable sales of $4.8 billion in Q3 2015. That’s just one quarter. (By the way, it just raised its latest annual sales target by another $1 billion.)”

Time to see whether your guess was correct? Yes, this is Gilead (GILD), the large biotech company that’s currently riding largely on the phenomenal success of its Hepatitis C treatments Harvoni and Sovaldi.

And it’s one of the largest companies in the world, and certainly one of the more followed biotech companies out there. It has a market cap of over $100 billion, and, to give you some idea of the relative size, has roughly the same weighting in the S&P 500 index as giants like Wal-Mart, Bristol-Myers Squib, McDonald’s and Amgen. If you hold the S&P 500 as your core market position, as many folks do, then about six tenths of o