“Collect a $6,500 Payday Every Three Months”

Richard Band sez: "Act Before December 20 & Grab Your First Check" -- what's the investment?

By Travis Johnson, Stock Gumshoe, December 15, 2011

This isn’t the first time we’ve seen a teaser ad that says you can “collect a $X,000 payday” — and it’s obviously appealing, there aren’t many among us who don’t find their eyes drifting toward a headline like “$6,500 payday,” even if, like your friendly neighborhood Gumshoe, you light your cigars with $100 bills.

OK, that’s not quite true. Mrs. Gumshoe wouldn’t take kindly to a cigar being lit with anything … and I’m afraid StockGumshoe.com will not soon be filing for an IPO that brings a guard shack and tennis courts to Gumshoe Mountain. Let’s just say that I’m willing to clean the dog poop out of my boots with a nickel, not just a penny like some of those less fortunate folks out there.

So yes, I admit, when I see a $6,500 payday I, too, find my attention drawn to the ad. So what’s being pitched?

The ad is from Richard Band for his Profitable Investing, and it’s all about …

“the one investment that could single-handedly help you beat inflation and provide you with a larger income stream than you ever thought possible.”

OK, so that sounds even better than $6,500. What is it?

Some clues:

“My favorite income fund pays a 65-cent dividend each quarter, or a whopping 18% annually. Putting that into perspective…

“… You pay less than $20 per share for 10,000 shares, and you will collect $6,500 every quarter.

“But here’s what’s really important: My income fund’s next ex-dividend date is on December 20, and if you act in the next 24 hours, you’ll capture your first $6,500 payday for owning the fund less than a month.”

OK, so it’s a fairly high yielder — though they clearly count on folks being drawn to the big numbers, since those of you with a good recollection of second grade math will know that “less than $20 per share for 10,000 shares” means your investment is somewhere in the neighborhood of $200,000. Which is way more than most folks, even those of us who can afford to scoff at a pile of discarded poop-covered nickels, are willing to invest in a single company. $6,500 doesn’t sound quite as sexy if you’re putting $200,000 at risk to get it — but still, for a quarterly dividend that ain’t bad, and it does probably rank up there in the top yielders in the market.

So who is it?

Well, we know it’s a mortgage REIT … and we know now a few of those details from Band … so we can tell you that he’s again teasing Invesco Mortgage Capital (IVR)

And yes, I probably should have noticed that before I even started reading through the tease — since much the same language was used to tease this stock idea for us just a few months ago.

Though — and here’s the kicker — at that time (mid-September), Band was saying that we should buy this stock for an $8,000 payday … and, in researching back through old email messages, I’ve also recently noticed that he was previously teasing this same stock for a $10,000 payday.

Why? Because the dividend was $1 a share earlier this year. Then they cut it to 80 cents pe