Note: the first version of this article contained some errors in price and calculation in the examples given, now corrected. I wrote some about Michael Lewitt’s Zenith Trading Circle when it was launched last September, and there have been several discussion threads about it over the past six months as well. From what I hear, the first six months didn’t go that well — but, well, running a bearish trading service during a time when everything is going up is going to lead to a lot of unhappy campers… even bad stocks can go up in bull markets.
The ads now, under Gilani, are quite similar to Lewitt’s ads — they take a strident tone of revenge and anger, which helps you feel like you’re part of a fight against something corrupt or repugnant. The “I’m bold and I don’t care what you think about it” attitude they use is one adopted by a lot of newsletter pundits (well, probably more the copywriters than the actual newsletter writers) because it works — the best publishers, particularly those who are connected to the Agoraplex (as Money Map is) know that pushing the envelope is the way to get attention, and if you don’t get the reader’s attention you’re certainly not going to sell a newsletter.
So Shah Gilani’s “tough guy” speak is pretty much the same as Michael Lewitt’s, and it appears that his strategy is about the same as well — or, at least, the strategy he talks about in his ads. The basic goal is to profit from stocks that are in persistent decline, and the easy target for that kind of strategy right now is the retailing sector — so that’s how the ad opens:
“40 U.S. retailers are projected for TERMINATION
“And the all deserve it!
“They gouged Americans of their hard-earned money for too long. But their demise is music to my ears. Because every time one is blown to bits, you could deposit $1,000 into your bank account”
So, like Lewitt before him, Gilani is pitching this idea of profiting from dying companies, bankruptcies, and “businesses that DESERVE TO FAIL!” Lewitt said he was the best in the world at doing this, an assertion that reviewers of the service here might take some issue with (remember, bold assertions are what sell newsletters — not boring old facts and track records), and Gilani is slightly less self-congratulatory, but the basic idea is still to use what they call “Carbon Trades” to make these profits from dying businesses.
The horror stories are, of course, attention-getting: bankruptcies at a bunch of retailers, particularly the mall-based fashion shops… rue21 just filed for bankruptcy this week, so perhaps that will be in the next crop of ads, but there have been tons of examples over the past year… and everyone’s quite aware of the faltering sales at huge mall retailers like Macy’s and Sears (Sears persists against all odds, years after I would have issued last rites).
And Gilani lays it on pretty thick with photos of malls being demolished, and pricks the fear reflexes of his core readers (upper-middle-class folks in their 60s, the core demographic for any financial newsletter publisher) with scary pictures of malls riven with hooligans and gangsters, the very folks that malls were built to avoid as department stores followed the middle class out of American cities in the 1960s and 70s.
The eventual demise of the shopping mall has been well-covered, to be sure, as is the fact that the US has too much retail (we’re “over-stored”, the analysts will say), so how does one profit from that? Can small retail investors profit in an arena where all the best hedge fund short-sellers are already quite active?
Remember, this is not an area where there’s much optimism. Betting against retail is not at all a contrarian move, you’re really very much running with the herd if you’re predicting the demise of Best Buy or Kohl’s or whatever else. Online shopping continues to grow, dominated by Amazon as most traditional retailers have struggled to compete profitably online, and the cultural importance and appeal of shopping malls have been in decline for many years, and both of those trends seem to be pretty persistent even in an economy that continues to grow relatively well… and the smart money has been in agreement that “malls are dying” for years (though there are always some bucking the trend, like Stefan Kaluzny, who keeps trying to turn around faltering retailers, with some success, and there are still plenty of relative “winners” in retail, from Home Depot to TJ Maxx).
So what the heck is a “carbon trade?” How can you use this kind of trade to profit from “The Long-Awaited and Overdue Collapse of the Retail Sector?” Let’s see…
The strategy of “carbon trades” is introduced thusly in the ad:
“Overall, the number of defunct retailers in the U.S. is now longer than O.J. Simpson’s rap sheet…
“Alco, Caché, Delia’s, Furniture Brands, Hasbro, Sport Chalet, Zale, Bluefly, Hot Topic, Talbots.
“It’s like a pile of garbage that keeps on getting taller and taller.
“The problem is, only maybe one in a million people actually knows how to profit from their looming collapses.
“But by using carbon trades, I can show you how to repeatedly extract tens of thousands of dollars from these companies as they crawl into their own coffins.”
Gilani runs down the littany of failures… Best Buy sales down 12% since 2013, Staples down 16%, Office Depot down 30%, Target sales down 21% this year, Walmart sales down 15% in two years… none of that will be a surprise anyone who reads the business press, this is a very well-covered story (there’s speculation here about some of the distressed retailers who might follow Rue21 into bankruptcy, for example)… and then he gets a little colorful again to make sure you don’t get bored and stop reading:
“I look at this and cry happy tears, because…
“These companies had it coming with a vengeance (and then some).
“They don’t deserve your pity…Are you getting our free