How Underperforming Newsletters Try to Scam You

Written by Nick Hodge
Posted August 2, 2017 at 2:41PM

We spend much time in this letter covering the shady shenanigans of government, central banks, and Wall Street.

The world is crazier than ever. I’ve even said we’re living in “Bizarro World.”

I don’t need to tell you how crazy politics have gotten if you’ve paid even one ounce of attention to the news lately.

Wall Street is still content to feed you stocks that have brand recognition but that make no money. Snap, anyone?

Snap IPO

But lately I’ve seen the attributes of Bizarro World take root a bit closer to home: right here in the newsletter industry.

As I told you in a postscript two weeks ago:

Not only are there many underhanded happenings on Wall Street, but I’ve seen some very nefarious things happening lately in the newsletter world as well. It’s not easy to produce consistent profits. And I’ve seen some outfits lately turn to shady shenanigans and outright deceit to sell their letters. Things like claiming a track record of gains that were never recommended to actual people, or licensing trading software and calling it their own. This is wrong. And just like calling out the questionable practices of Wall Street and government has been the backbone of this letter, I will also be calling out questionable practices in the newsletter realm. More to come on this.

I know our industry often takes liberties with headlines and hyperbole. That’s par for the course, I guess.

But what I’ve seen lately crosses the line into outright lies. And it wreaks of desperation to sell letters when the editor’s actual performance isn’t up to snuff.

So here are three things I’m seeing that you should avoid at all costs or at least research more thoroughly…

1. Claiming a track record that could not possibly exist.

I’ve seen letters out there that tout track records that are fictional fantasies.

Sometimes the stocks weren’t recommended to actual paying members of a service. In the worst example I’ve seen, a portfolio was retroactively created. That means a model portfolio was created using stocks that had already gone up before the service was even open for membership!

It’s fiction. It’s bizarre. And it dupes unsuspecting investors like you who could instead be paying for actual research and results.

When you see claims of unbelievable track records you should do your best to verify. Call the company’s customer service number and ask for a full track record, including buy and sell dates. Ask if the recommendations were made to paying members of the same service that’s being advertised.

Here’s my promise to you: No advertisements for Outsider Club paid services will ever use made up or altered track records. If you call our customer service team they will gladly give you a copy of our newsletter track records. (We won’t give you the company names in open portfolios, of course, as that would be unfair to paying members. But we’ll certainly give you the dates they were recommended and the percentage returned.)

2. Licensing trading software and reselling it.

This is just plain lazy, and shows that the editor has no real market prowess.

Some promotions I’ve seen lately for trading services are simply software that has been purchased or licensed from a third party, and then rebranded as an editor’s trading system.

If you want trading software just go out and buy it. There’s no reason to pay an editor to feed you trades that he’s just getting from a secondary source!

You’ll recognize these promotions immediately as they’ll be chock full of examples saying “if you had bought this stock when our system indicated you’d be up XX% right now.” They’re simply using backtested trades from the software they licensed that may or may not have been recommended to actual paying members (see #1 above!).

When you see systems like this advertised, call the company’s customer service and ask if this is a proprietary system designed by the editor pushing it, or if it’s a licensed software program.

Here’s my promise to you: No advertisements for Outsider Club paid services will ever resell trading software to you. That’s for no-talent hacks who can’t research and find successful investments to recommend on their own.

3. Stringing together gains.

This one may be the worst. It’s definitely the worst if the editor doing it didn’t even make the recommendations.

In this crooked scheme, an editor will tout how much you could’ve made if you followed successive trades. Example: “If you bought stock X on this date then sold it and bought stock Y then sold that and bought stock Z… you’d have this much money.”

Problem is that’s not how newsletters operate. No letter I’ve ever come across has said put all your capital into a single trade, then sell that and put it into this one. Instead they are portfolio-based, having several recommendations at once.

So if this feat were even possible with the stocks the editor recommended… the onus would be entirely on you to pick the right one and know exactly when to sell it. And then again the onus would be on you to put all that capital into the next one.

Not only does this simply not happen, in many of the advertisements I’ve seen that use this tactic… the editor never even recommended the stocks in question (See #1 above). They are just cherry-picked examples from the open market strung together to produce the desired outcome for promotional purposes.

It’s pure fiction! And any chance of you having those results is fantasy as well.

When you see it, call the company’s customer service number and ask if the editor actually recommended the stocks in the promotion. Ask if he advised buying and selling on the exact dates mentioned in the promo. And ask if he told his readers to take the capital from one and put it in the next. He didn’t.

Here’s my promise to you: No advertisement for Outsider Club paid services will ever use this tactic. We will never add together gains. We will never compile a list of theoretical gains based on recommendations we didn’t actually make.

It’s hard work to produce real, winning results in the market. I know because I’ve done it for a decade now.

I haven’t done it alone. It takes great mentors and a great network to come up with consistently profitable ideas.

But the results speak for themselves in a two-fold manner. Our newsletters are successful for us because they’re successful for you. Plain and simple.

I know because people like you routinely write in about their great experience. See what they are saying about Outsider Club. About Early Advantage. And about Nick’s Notebook.

Folks don’t write in with heaps of praise when you’re duping them.

You would think not lying to people would be the best way to do business. But in Bizarro World, some folks just don’t get it.

Here is my latest investment idea based on actual research. It’s a real opportunity at ten-fold gains in the health science sector. It’s backed by millions in government money. And it will be featured on Fox Business this fall because of the technology it has. You’ll want to own it before then. (You won’t find any of the tactics mentioned above in this advertisement.)

Call it like you see it,

Nick Hodge Signature

Nick Hodge

follow basic@nickchodge on Twitter

Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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