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Home >> Stock Forums >> Secured Investment Contracts: Scam?

Secured Investment Contracts: Scam?

CburgTrader said: "Dear Forum, I received an e-mail offering "Secured Investment Contracts" from U.S. corporations. Supposedly, their financial analyst finds these contracts, and, for a fee, offers them to members of his news letter and website. It's called "True Income" and offers returns of 50 to 150% in a one to four year time period. Google: "True Income" for details. It will be the "stansberryresearch.com" site. Does anyone know if this is for real, or a scam? Thanks! Mike"

Heather said: "If the Email was unsolicited I'd definitely call it spam... and probably a scam. I don't trust many "offers" that arrive in my Email box.. That's just me."

lraver said: "[QUOTE=CburgTrader;70149]Dear Forum, I received an e-mail offering "Secured Investment Contracts" from U.S. corporations. Supposedly, their financial analyst finds these contracts, and, for a fee, offers them to members of his news letter and website. It's called "True Income" and offers returns of 50 to 150% in a one to four year time period. Google: "True Income" for details. It will be the "stansberryresearch.com" site. Does anyone know if this is for real, or a scam? Thanks! Mike[/QUOTE] I do not think it is a scam. However I have not heard of Secured Investment Contracts, but the internet via google has some info on them. I have delt with Stansberry research for a few years and they do attempt to make some good money making recomendations. They have several newsletters with good guarantees, if you do not like what you find out when subscribing. Hope this helps a little. lraver"

buyproperty said: "Really scam messages. Do not believe those messages."

Heather said: "[I]Caveat Emptor[/I] :)"

CburgTrader said: "Dear Board, Thanks everyone. Cleaver saying, Heather. Yes, I am getting the feeling that it is a scam. I e-mailed them, asking for validation of the program, and they haven't replied. Best regards, Mike :th_coolio:"

evansjpe said: "The bulk email, which I also got, is from Agora, a major publisher of online newsletters who also market for others, as Stansberry Research in this case. Agora has great copywriters, but the real service offered may not be as wonderful as they make it sound. The term "secured investment contract" is theirs, not commonly used in the industry. The type of security they describe would probably translate into English as a privately placed (possibly unregistered) junk bond (or "note", since these are short term). The mysterious identifying number is the CUSIP. I researched a few of the examples given in the promotional letter. Most cannot be found through ETrade's Bond Finder. Countrywide Financial shows up, with many maturity dates, but not the one they mentioned, and the typical yield is 8%, not the 50% or so they were talking about. Finova is almost completely out of business; I have no idea what recovery, if any, the noteholders would have gotten. Tembec's note issue was completely cancelled and withdrawn, possibly due to the SEC giving them a hard time about registration paperwork; looks like the investors would have gotten their money back on that one, but none of the promised miracle profits. On the whole, I think the product could not correspond to its glowing description, and I sure won't be spending $1200 for a year's subscription. Too bad; the marketing puff was aimed at a real investor desire."

CburgTrader said: "Thanks, evansjpe! I appreciate you sharing your research with us. Another example of the "if it sounds too good to be true" algorithm. C'burg :th_coolio:"

hasse_john@yahoo.com said: "Thanks folks, that is kind of what I thought. Those rates are what you would have to pay to local loan shark, and what company with a reasonable expectation of being in business for awhile would pay those rates, or have to?"

heinz57 said: "I also received a bulk mailing from Daily Wealth run by Stansberry & Associates Investment Research, detailing the wonder of secured investment contracts and referred this to my financial advisor asking if this was likely to be a SCAM. He replied by sending me an article by Brian Deer from the Sunday Times in 1999, concerning Frank Porter Stansberry and his conviction for securities fraud. As a new member to Superior Investor I'm unable to post a URL of the article at present but if you do a Google search for "Brian Deer, Vaxgen and Stansberry" you will see it. My feeling, based on this information, would personally be to be very sceptical of the claims about Secured Investment Contracts, although it's up to the individual to decide."

evansjpe said: "[QUOTE=hasse_john@yahoo.com;70353]Thanks folks, that is kind of what I thought. Those rates are what you would have to pay to local loan shark, and what company with a reasonable expectation of being in business for awhile would pay those rates, or have to?[/QUOTE] I think the gag is that you buy a junk bond of a company in trouble just a year or two before maturity, at a discount reflecting investor scepticism. If you buy a bond at 60, paying a 12% coupon, you get a 20% interest return on your investment, and if the bond gets rolled over at maturity, you can get out at 100 or close to it, giving you an additional 67% return. This does happen sometimes; for instance, people who bought Chrysler junk bonds or preferred stock at 25 or 30 when they were in deep trouble were able to sell at 90 5 years later, and all their back interest and dividends had been made up. The problem is: What happens if the sceptics are right? Then you sell the defaulted bond at 15, if there is any bid at all. Junk bonds actually paying interest can be an alternative to buying the stock of the same company; which is better depends on the price. The right way to analyze a junk bond in trouble is to commonize it. For example, if the company has $100 million of junk bonds at market value, and 20 million shares of stock trading for 10 or $200 million, just pretend the bonds are converted to stock. Then the equity is $300 million. If that's a screaming bargain for this business, decide whether the 20%-plus interest return on the bonds is worth giving away most of the upside. (If the company gets well, the bonds will return to 100, but the stock may also go to 100.)"

rgbaldwin said: "I get the 12% Stock Letter from Stansberry and it is well done.'' I am a retired money manager who went to Wharton so I have seen it all. Why would a firm that has a "good" newsletter debase itself with this junk? Dumb marketing"

sundulhyip said: "i think it is scammer"

Aligator said: "[QUOTE=rgbaldwin;70768]I get the 12% Stock Letter from Stansberry and it is well done.'' I am a retired money manager who went to Wharton so I have seen it all. Why would a firm that has a "good" newsletter debase itself with this junk? Dumb marketing[/QUOTE] I found that 12% letter you mentioned. How does it do under adverse conditions - like we're in now?"

steffim008 said: "It is a SCAM and I dont know how these people get our mails. Some times my gmail filters it to spam but many times they come to inbox. Now I made it a habit to delete them before opening itself."