This is all going to sound at least somewhat familiar — the Stansberry folks are sending around a teaser ad that cites Hillary Clinton’s huge non-government earnings on her tax returns, and tells us that through the miracle of “Mainz Income” we can all make money using this same technique.
It’s familiar because it’s been used by these same copywriters several times over the years — the politician they use as an example differs as times change, so for a while it was George W. Bush, then Bill Clinton, then Barack Obama, and now Hillary Clinton.
Why use these individuals to headline your ad? Well, they are polarizing figures — and strong feelings get attention and get you to read, and the marketers don’t care whether you start reading out of hate or out of love.
And they’re also all bestselling authors — so although the comparison with the kinds of investments eventually being touted in these ads is a bit spurious, it does at least make some logical sense. More on that in a minute.
In case you missed the ad, it’s a pitch to get you to subscribe to Matt Badiali’s S&A Resource Report … here’s how the new version opens:
“It’s public record that Hillary Rodham Clinton made $186,600 per year as Secretary of State.
“But what most Americans don’t realize is that the former ‘First Lady’ is also tapping into a secret income stream – something I call the ‘Mainz’ income stream – which has enabled her to collect, on average, more than $57,390 PER MONTH since leaving The White House.
“That’s more per month than the average American makes in an entire year – and she’s been doing it NONSTOP for the past 14 years. That’s a total of more than $10 million….
“So, how come you’ve never heard about this before?
“Well, quite simply because the majority of people taking advantage of these income streams aren’t too eager to talk about them with the public.
“As Thomas M. Rees, former Democratic Representative from California said of his ‘Mainz’ income stream, ‘It’s one of my most closely guarded secrets.’
“But what’s perhaps most surprising is that just about anyone can use these secret income streams to generate huge amounts of income. In other words, they ARE NOT reserved solely for politicians, public officials, or government employees.”
He lays out a bunch of other examples along the way, with stories and quotes about people who’ve made huge gains from these “Mainz Income” secrets. So what’s he talking about?
Well, quite clearly the basic pitch is still the same: Royalties. Royalties are a great way to make enduring income from an idea or asset — in the case of an author, royalties are how you earn your share of the book sales once those royalties exceed your advance, if you’re a landowner you might earn windfall royalties on the oil or gas or gold found on your property, or if you build or create something you might earn royalties from the development or commercialization of it — whether that’s a trademark or a patent or whatever. The great thing about those kinds of royalties is that they might pay off for a long time without you ever having to make a financial investment.
As investors, however, it’s different — there are royalty investors out there in several different industries, and when you buy into a royalty stream what you’re effectively doing is investing to own a piece of that royalty. You still shouldn’t, in most cases, have any ongoing financial commitments — the royalty money comes in without you being obligated to invest further in the company or endeavor — but you have made the initial investment. So like buying an annuity or a CD, it’s a case of figuring out how much the royalty might pay out over time and what you’re willing to pay for that.
Which is a pain in the neck. So there are also royalty companies out there that own or are buying or creating royalties, and when you buy those you’re buying some estimate of what their portfolio of royalties might be worth … but you’re also buying into a management team and their ability to keep managing that portfolio of what are effectively passive assets.
Here’s how Badiali describes the basic concept of the royalty investment and the logical connection to the “Mainz” name:
“Get Paid Over and Over Again, For Life
“In every industry there’s usually a backdoor way to get paid OVER and OVER again for a single idea, property, or patent.
“In the drug business, for example, the big money is in patents.
“After all the work is done developing a new drug, for example, a scientist can partner up with a larger company to handle the expenses and risks of testing, marketing, and distribution.
“Then the patent holder gets paid for every prescription that gets filled. The guy who developed the popular pain medication Lyrica, for instance, shares in more than $2 million per month because he owns the patents. The ladies who owned the patents on the anti-fungal medicine Nystatin shared in more than $50,000 per month.Are you getting our free Daily Update
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“In the publishing business the big money is in royalties.
“Once you do all the work writing a book, you just sit back and collect your share of the profits. Hillary Clinton, for example, makes on average more than $57,000 PER MONTH from sales of her best sellers, Living History and It Takes a Village.
“In fact, this is why we call it the ‘Mainz’ income stream secret.
“You see, the Guttenberg Press, which was invented in Mainz, Germany, is generally considered the invention that first made collecting regular royalties possible, by allowing book publishers and authors to make a fortune after creating a valuable piece of work.
“And to this day, the ‘Mainz’ secret remains one of the great low-risk ways to get rich in America.
“You make just one investment… or control one valuable asset… and then get paid over and over again, while somebody else takes the risk of marketing, development, and distribution.
“Now… don’t get me wrong… I’m not saying you should go out and develop a new drug, or write a book, or record a record, or anything like that.
“You see, what I’ve found is that there are some incredible (and low risk) ways to use this secret as an investor. In short, you avoid all the normal risks of doing business… and simply collect incredible royalty streams for owning a very valuable asset.”
So that’s the general idea being teased — and they’ve teased it before, with very similar language.
But since the miners and mining royalty companies are getting so clobbered this year, I thought I’d check in and see WHO Badiali is teasing this time — is it the same group of gold mining royalty firms he pitched last Summer under the “Mainz Income” banner, or something different?
For some answers, let’s see what clues he offers in the ad.
“I believe that one of the easiest and safest ways to turn a small investment into an incredible income stream over the next few years is to own royalty interests in the world’s most profitable industry.
“In other words… your only investment is in the ownership of the valuable asset… the oil or gas field.”
Ah, so we’ve moved away from the gold and silver royalties as the “Mainz” idea and back toward oil and gas royalties — which is a much larger business. That’s not a brand new pitch either, of course — Badiali teased some “Mainz” oil and gas royalty stocks back in 2010, again using pretty similar language. But I suspect his choice of specific royalty owners must have changed since then, so let’s dig in and see if we can identify which ones he likes now.
Badiali throws in a couple charts and examples that illustrate how much stronger some of the oil and gas royalties owners have been than the big oil companies — like the BP Prudhoe Bay Trust, for one, and it’s dramatic outperformance versus BP (the operator from whom they earn their royalties) or big oil majors like Chevron and Exxon.
But the clues about which specific oil and gas royalties he likes are a bit elusive. Here’s what he says:
“For the past 6 months I’ve been l