The Complete Investor’s “Escape Plan”… What’s their “perfect retirement stock?”

By Travis Johnson, Stock Gumshoe, December 20, 2018

Scott Chan is pretty new to the world of newsletter pitchmen, but he’s apparently been working for Investing Daily for a while as a technology analyst, and is now headlining his second ad for them (that I’ve seen, at least).

The last one was pitching a stem cell immunotherapy biotech stock (which hasn’t worked so well at this point ), but this latest one is teasing a more broadly appealing and probably easily understood idea — he calls it a “technology innovator” that operates a video streaming platform (“a little like Netflix and a little like YouTube”).

So let’s see what he’s pitching, shall we?

I do first have to get a little fuming off my chest — so prepare for a bit of a rant. The whole lead-in to the ad is irresponsible in its promotion of the notion that you can “Retire wealthy in two easy steps” that involve, essentially, finding the best stocks in the world and concentrating your whole portfolio in them, and selling near the peak.

Which almost makes my head explode.

Yes, duh, if we knew which stocks would be the big winners we would all bet our entire retirement savings on them.

Yes, Warren Buffett does say that diversification “makes very little sense for those who know what they’re doing” … but that’s just self-congratulatory twaddle (I’m a big fan of Warren’s general investing philosophy, and Berkshire Hathaway is my largest stock holding, but there’s a huge gulf between “knowing what you’re doing” and “being the most accomplished and revered investor of your generation, who has never had a moment when he had to worry that he’d be eating cat food in retirement”). Compared to Buffett, most of us do NOT know what we’re doing… and, perhaps more importantly, do not have the patience or the stomach to handle that kind of portfolio concentration.

How many people do you talk to who think they’re below average? Average, even? We are hard-wired to believe in our own exceptional brilliance and skills, but when it comes to investing the obvious evidence says that’s not true: We are dummies, and we do stupid things most of the time, and often we are pretty sure that we know what our “best ideas” are, with only the better angels of our nature (or the fact that we’re not married to someone as foolish as ourselves) protecting us from betting the farm on bitcoin when it seems destined to turn everyone into billionaires.

Here’s the opening of this ad, which is pitching The Complete Investor ($40/year)…

“Financial ‘Anti-Guru’ Issues URGENT WARNING…

“If You Own ETFs, Mutual Funds, Or More Than 5 Stocks,


“REVEALED: ‘Escape Plan’ for Adding $1,000,000 Or More To Your Retirement Account… Starting Today”

Can you imagine how damaging that is for people who are freaking out about recent dips in the market, and panicking about their retirement? That’s essentially telling someone exactly what they want to hear: That their fears are real and they should sell everything they’ve carefully built up over years, and that we’ve got a way for you to get rich right away and stop this boring savings and gradual wealth accumulation track — no worries!

It works partly because there are lots of cliches and lots of manipulative schmucks in the financial industry, of course, and it is human nature to be grouchy about the fact that you put 10% of your salary into index funds in your 401(k) for 20 years, just like you were told, and yet you are not a Rockefeller (or worse, that your obnoxious neighbor or brother-in-law is a day trader or a bitcoin enthusiast and claims to have made millions while you were being a “sucker.”)

And he just ladles kerosene on the fire of frustration you might be feeling about your portfolio just now:

“Wall Street brokers, fund managers, and gurus wear $5,000 suits, drive Porsches, and spend weekends at their multi-million dollar ‘second homes.’

“Clearly, they’re not practicing what they preach.

“In 2017, America’s top three Wall Street banks made a total of $46.7 billion .

“And I guarantee you, they didn’t make that kind of money by…

“Investing in ETFs, mutual funds, and blue chip stocks…

“Or buying and holding for the long term.

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“No… Insiders play by a completely different set of rules.

“And today, I’m going to share with you…

“The truth about getting rich in the stock market.”

And then the examples come in, which is what really gets my goat — he talks about some big trades from people who sound like “regular folks” and implies that they made their fortunes from not diversifying and by making a big concentrated bet on some hot stock tip (like, perhaps, the one Scott Chan wants to sell you today) … here are a couple examples:

“Denise Grant, a 63-year-old from Rochester, New York added $1,490,139 to her account when she sold 1,863 Google shares….

“Patty Donovan… a 62-year-old from Palo Alto, California. Patty sold 5,141 shares of NVIDIA stock and pocketed $1,134,776 in cash….

“When 57-year-old Joseph Cameron sold a portion of his Microsoft shares, he added and incredible $1,980,462 to his retirement account….

“Denise, Patty, and Joseph life in different parts of the country and have completely different life situations…..

“All three people share a secret…

“A secret that brokers, fund managers, and gurus have kept closely guarded for decades.

“A secret designed to make insiders wealthy…

“And toss you just enough small wins to keep you coming back for more, year after year.

“If you keep playing by the rules you’ve been taught, you will never have the retirement lifestyle you deserve.”

And then, of course, the sell…

“But it’s absolutely critical you pay close attention to what I’m going to share in the next few pages.

“Because… as Denise, Patty, and Joseph have shown… this information can put seven figures in your retirement account starting today.”

This is a family publication, so I can’t use the words I want to use right now. But Aaargh! Frickin Frackin Flibbidigibbet! That’s all malarkey.

“Denise Grant” is probably actually Diane Greene, who is on the Alphabet Board of Directors because she was one of the founders (and was President and CEO) of VMWare… and she’s a senior VP for Alphabet, and CEO of Google’s cloud business right now, per her Wikipedia page, though she’s apparently stepping down next year. Maybe she’s retiring, I don’t know, she is really also a 63-year-old woman from Rochester, she apparently has some hobbies, and she’s very rich so hopefully she has her health and she can do pretty much whatever she wants. She says she wants to mentor women in startups.

The million dollars or so that Diane Greene got from selling 1,863 of her Alphabet shares in August of 2017 (that was just one of her sales, she had several similar ones that year) was not likely a major event in her life… I don’t know how much money she has, but her “retirement secret” has been building several companies over a couple decades and being really smart and driven and active in a hot technology area, building VMWare to the point that it was bought out by EMC and then starting a company called Bebop that was bought by Alphabet (when she was already on the Alphabet board)… she’s not a middle-class worker bee who got lucky with a big bet on GOOGL shares.

Greene/”Grant” is also one of the “Top 50 Women in Tech”, according to Forbes… that’s a great goal for a professional striver, but it’s not a retirement strategy that you buy in a $40 newsletter.

How about the others? Are they equally ridiculous? Pretty much, that’s where copywriters tend to get these kinds of examples of “big winners” — the SEC filings where insiders, including board members like Diane Greene, have to report their sales. And they typically change the names a little to “protect their privacy” (or whatever their rationale is).

“Patty Donovan?” That’s almost certainly actually Persis Drell, who is, no surprise, on the Board of Directors for NVIDIA… here’s the summary of her Wikipedia page:

“Persis S. Drell is an American physicist best known for her expertise in the field of particle physics. She was the director of the SLAC National Accelerator Laboratory from 2007 to 2012. She was dean of the Stanford University School of Engineering from 2014 until 2017. Drell became the Provost of Stanford University on February 1, 2017.”

And yes, as teased, she has sold NVDA shares quite a few times over the last three years that she’s been on the board (she has been granted roughl