Now this is a pitch:
“Everyone knows gold is a great investment. Since 2000, it’s gone from $275 to $1,250 an ounce.
“But what if I told you there’s a special type of investment out there that’s not only beaten gold over the past decade but has practically destroyed every asset class on the market as well. In terms of average, annualized returns:
“It’s performed 18-times better than the S&P 500
“It’s beaten mutual funds 17 to 1
“It’s beaten utilities 6 to 1
“It’s beaten bonds 3 to 1
“In fact, we couldn’t find a single type of investment that has even come close to this ‘gold-beater.’
“And the next 12-24 months could be the most profitable period to date for this investment.”
Not that gold is necessarily the one thing we should be comparing all other investments to (personally, I’ve always thought of gold as more of a “store of value” savings vehicle than an investment, but it sure has gone up in recent years) … but whatever you compare it to, those are some nice numbers.
So what is this? The folks at Stansberry Research tell us that they call it the “A.O.P.” — here’s how they put it:
“Spawned by a 31-year old snippet of U.S. corporate tax code, the A.O.P. has been generating capital gains AND progressively higher levels of income since the inception.
“But you won’t find this income opportunity through any government agency website… even though it owes its very existence to an act of Congress.
“Plus – and here’s the kicker – the A.O.P. has historically increased shareholder payouts every year no matter what’s going on in the markets.”
And then, as newsletters are wont to do, they brag about the fact that they’ve been behind this “AOP” investment for a long time, letting their shareholders enjoy a nice run:
“We first wrote about the A.O.P. four years ago.
“At the time the economy was booming, the financial markets were still strong, and people were spending money hand over fist.
“Everyone knows what happened next…
“Banks began to fail, the markets collapsed, the economy went into a tailspin…
“But for those who took advantage of the A.O.P., it’s been a much different story…”
So this made me check back in the Gumshoe files … and yes, the S&A Resource Report did teaser this “AOP” investment in their ad campaigns several years ago — I don’t know if it was really four years ago, since I wasn’t publishing then and the Gumshoe had yet to lay the foundation on our virtual edutainment storefront … but I did write about Matt Badiali’s teaser for his newsletter, which was then called the S&A Oil Report, and he was pushing the “AOP” quite hard then.
And from that point, the investments have mostly done quite well — but that’s because they’re roughly flat (not counting dividends) — which, compared to the S&P and other comparables, is pretty good. When I wrote about this sector for the first time back then, in May of 2007 when my inbox was overflowing with A.O.P. stuff, I thought these investments were pretty expensive and would have to come back in to make the yields more competitive and attractive… and they did, taking an outsize hit in late 2008 and early 2009 that made them, in retrospect, insanely cheap.
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But I should go ahead and slake your thirst for the “answer”, right? The A.O.P. is their acronym for “American Oil Pension,” and then as now it’s a teaser about investing in Master Limited Partnerships (MLPs), largely those MLPs that make up the majority of the sector, the companies that transport, process and store oil and natural gas.
I’d have to assume, however, that Badiali and his copywriters are teasing out different MLPs than they did three years ago — so let’s dig into the tease a bit, shall we?
If you’re not familiar with the MLP term (and don’t worry, no one else sues AOP — that’s just a copywriter invention to help make this seem mysterious, and bolster Badiali̵