Think Like a Rich Guy and Buy “Intrinsic Art”

By Travis Johnson, Stock Gumshoe, April 25, 2011

The latest newsletter to head our way via a big and mysterious marketing pitch is called The Palm Beach Letter, signed by a guy named Mark Ford — who is apparently the same dude as Michael Masterson, who has for a long time been a big name in copywriting and self-help “work from home” marketing … I see his stuff most often because of his EarlyToRise website and email letter, but his name is well dispersed.

I don’t know which is his real name, actually, assuming it’s either one, but there’s a reason that the letter and the marketing pitch might sound familiar to many of you, he started out in the newsletter business a long time ago, helped start the Oxford Club and to build Agora into the gigantic publishing and marketing firm we now enjoy, and has been some sort of copywriting guru consultant to them for a long time. I’m told that he was the guy who taught Porter Stansberry how to write a marketing letter, and Stansberry’s ads certainly lead the pack in terms of getting attention from my readers.

Ford is pitching this Palm Beach Letter for a new publisher called Common Sense Investing that seems to be run by Tom Dyson, who himself edited the 12% Letter for Stansberry for many years. I assume that this Common Sense Investing group is also affiliated with Stansberry and/or Agora, but I don’t know if that’s true. The letter is being pitched at $99 a year (though right now it’s “half price” as they launch it) … which must mean that they have an idea for a $1,000 newsletter that they can sell you once they’ve started to build their mailing list.

But anyway, yes, the letter looks and sounds a lot like the pitches you hear from most of the offspring of the Agoraplex, though the spiel is a little bit different than the “here’s one hot stock” tease. Still a tease, but a bit less specific of one — I’ll share with you what I can figure out in a moment.

The hook of this letter is that Ford is placing a $10,000 bet with a friend named Robert that he (Ford, that is), can teach you how to become rich:

“You see, my rich friend Robert has had a lot of advantages in his life.

“And because of that, he believes there are basically two distinct classes in America… one group who is meant to be rich… and the other group who is not.

“But as you’ll see, I have very different beliefs about who gets rich in America, and why.

“I grew up in a hardworking family. We were very poor, so I know that acquiring wealth is a lot more complicated than that.

“That is why, a few weeks ago, my friend Robert and I made a $10,000 bet.

“And it involves you if you’d like to participate….

“In short, I believe that in one year, I can teach you to be rich. ”

So that’s the basic idea of this Palm Beach Letter, we’re told — that we’ll learn how the rich use different techniques, think differently, and become and stay wealthy while you’re, well, a sucker. And I don’t say “you” pejoratively, I’m sure I’m probably a sucker, too — after all, I’ve had lots of jobs and have some of my money invested in 401ks and mutual funds like regular folks. Shocking, I know.

Here’s some more of what we’re told to expect from this newsletter:

“…nearly all of the things most middle class Americans think are helping them build wealth, are actually conspiring against them.

“These things are designed and run by big institutions, and many are 100% supported by the government….

“If you are willing to look at the world from a slightly different perspective… and to cast aside your existing beliefs and biases, there’s actually a whole new world of investing, business, and finance, which quickly becomes available to you.

“What I want to show you in this presentation is how the truly rich in America play by a completely different set of rules.”

He then goes on to talk about some of his rules for investing — secrets along the lines of “Never, never lose money.” And he talks about having “Zero” risk tolerance when he describes a type of real estate investment that has never had a down year since 1987, when it was down by just 1.2%, and which has apparently clobbered the stock market, home prices, and gold over the last 40 years.

No, I have no idea what it is — he says it’s low risk and that it’s part of the fortunes of lots of famous people who he name-drops (Gates, Bezos, Turner, etc.), but he doesn’t provide much more in the way of clues … so I don’t know if it’s some special kind of limited partnership for apartment buildings, or timber land, or what have you. I’m not much of a real estate expert, so we’ll have to leave it at that — but if you’re talking about an asset that has never lost value in 23 years it seems awfully likely that it’s either going to be something with a big “if” involved, or a train of luck that shan’t roll again.

And then he does actually tease something specific that I can tell you a bit more about. He says that he doesn’t believe in diversification, that having assets spread across five “buckets” is his strategy … and that his buckets are cash, gold, private businesses, real estate, and art.

Here’s how he introduces his “art” investing idea:

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“I know what you are probably thinking… it’s unlikely you’ve ever invested in art before, and it probably scares the daylights out of you.

“Of course, that’s exactly how my rich friend Robert expects you to react. He says you probably won’t be interested in this investment, because it’s unfamiliar. In the world of behavioral finance, they call this phenomenon, aversion to ambiguity.

“In other words, most ordinary people prefer investment strategies they are familiar with… even if these familiar strategies are clearly inferior to something new.

“Well… I hope that together you and I can prove Robert wrong.

“You see, most Americans don’t know that art has outperformed the stock market by 332% over the past decade, according to Jianping Mei and Michael Moses, two New York University professors who have created the most closely followed art price indexes.

“I have personally bought nearly a million dollars worth of art over the past 30 years… and all told today it’s worth about twice what I paid for it.”

“And recently, I have come across an incredible opportunity in the art world… something I call ‘Intrinsic Art.'”

Of course, investing in art is a hobby of the rich for a good reason — you have to either be an expert or hire experts to dabble in the real masterpieces, or you have to get lucky and prescient and be a tastemaker who discovers the next great Master early on. I like art and buy plenty of it, but not the fancy stuff from high-end galleries — and I don’t expect to ever sell it, I buy it because I like to look at it. I expect that’s how a lot of people feel, but in this case Ford is pitching a kind of art that’s not the stuff you see on gallery walls:

“Now… I’ll be the first to admit that making money with art is very different from every other type of investment. It’s highly unlikely that you are going to stroll into a gallery and pick a painting off the wall that will hit it big.

“But that’s why I’m particularly excited about my recent discovery… a unique type of antique collectible ‘art,’ which has a legitimate shot at going up by more than 1,000% over the next five years.”

So what do you reckon this is? Well, we get a few more clues:

“It actually involves series of antique pieces that were designed roughly 150 years ago by a famous Pennsylvania-born American artist. And here’s what makes this unique investment so low risk…

“These pieces are made of nearly pure gold, and can be found in every state around the nation.

“The great opportunity in this investment is simple to understand:

“Despite the fact that gold has gone up in value by more than 400% over the past decade… many of these pieces now sell at lower premiums than they have in more than 50 years!

“I call these pieces ‘Intrinsic Art’ because they are made of gold, and have an intrinsic value that is easy to measure.”

So what is this “intrinsic art?” Well, it’s impossible to be 100% certain given those clues, but I’m pretty sure he’s talking about gold coins — and specifically, about the liberty head gold coins that came primarily out of the Philadelphia Mint and had a very long run, from before the Civil War until early in the 1900s. The original design is called the Liberty Head, with the most well-known being the Double Eagle, and it’s pop