It goes with little saying that I think he's no limp flower, too shy to let us gaze upon his boat race. Nor is any anxiety reasonably due to his appearance. He looks like what he is: a tipster. Compared with, say, Stephen Smart, the beardy-weirdy editor of the Stansberry & Associates True Income newsletter, he's a veritable Adonis of financial punditry: a (slightly overweight) white guy in a suit.
By my calculation, he has just turned 40: younger than many who have grabbed such profile. "The fact is," he wrote recently in a letter to the financial magazine Barron's, "Stansberry Research is not merely noteworthy; it is the largest independent (ie, subscription driven, not ad-driven) financial publisher in the world. Today we have nearly 900,000 subscriber accounts in over 100 countries. That's more than most of our competitors, combined."
Then he imbibed of the copywriter's caffeine for a paragraph he should have hammered in bold:
What's the secret behind our success? Simple. We put our clients first (we don't buy the stocks we write about) and we hold our ourselves accountable. We continue to be the only independent financial publisher that, like Barron's, publishes a complete track record annually.
But, for me, such statements are where things get tricky. I'm not sure how much of them is true. After all, this is the man who, to my certain knowledge, said he had spent a quarter of a million bucks researching the VaxGen prospectus, only to get the whole thing spectacularly wrong. I hope he forgives me, but I don't believe his figure. I didn't believe it when he claimed it in 2003, and with the benefit of hindsight, I still don't.
I have similar difficulties with aspects of his promotions. Take this. It's boilerplate Stansberry:
Porter Stansberry founded Stansberry & Associates Investment Research LLC, a private publishing company based in Baltimore, Maryland, in 1999. His monthly newsletter, Porter Stansberry’s Investment Advisory, deals with safe value investments poised to give subscribers years of exceptional returns.
Porter oversees a staff of investment experts whose expertise range from value investing to insider trading to short selling. Together, Porter and his research team do exhaustive amounts of real-world, independent research. They’ve visited more than 200 companies over the past five years, in order to find the best low-risk investments in the world. Prior to launching Stansberry & Associates Research, Porter was the first American editor of the Fleet Street Letter, the oldest English-language financial newsletter.
It's all straight enough, until it gets to the end: to something that's not unverifiably subjective, like much else. Thus, your honor, I cite the words at the end:
... the world's oldest English-language financial newsletter...
But when I study that publication (until recently fronted-up by the now-deceased Brit Lord Rees-Mogg, and offering to help you "protect and expand your wealth, no matter what's happening in the stock market"), I see it claims to have been founded much later than I'd expect. Its masthead says:
Now call me picky. But I think this is revealing. The late Mogg's can't have been the first such publication. What's now Investor's Chronicle, for example, owned by the Financial Times (the "pink 'un"), started life as Money Market Review in the Victorian era. It was launched in June 1860. I'd say that anyone with a grip on economic history, much less a person actually employed by the Fleet Street Letter, would know that it couldn't have been the first.
It also doesn't help that, although the Fleet Street Letter sounds of classy - Olde English and all that - it's actually a subsidiary of the self-same publishing group that owns Mr Stansberry's soul. That's Agora Inc, of Baltimore, Maryland, started in 1978 by William Bonner. And, according to court documents, before elevation to the Letter's American editor's chair, our Porter had started at Agora - in 1996 - as a clerk in the company's mail room.
A younger Mr Stansberry
Other aspects of his story seem better researched. You'd almost think he was there. "My first job out of college," he explained in a 2002 interview, "was working as a writer for an economics/financial research and publishing house. I was putting in 12-14 hour days regularly, six days a week. I had daily deadlines, weekly deadlines, and monthly deadlines. It was the hardest work I'd ever done. And I was making less than $30,000 a year. It was a totally thankless job.
"I noticed that our firm's top copywriter worked one or two hours a day, made a base salary at least twice what I made, and frequently made more than $100,000 per year after royalties."
Now, I don't know about you, but the picture I'm getting is that Porter Stansberry is, well, a copywriter. Hold that thought, because it may be important in understanding how to assess his advice. This is how he started out, and my personal philosophy is that your first serious job can pretty much define your life. He's not telling us he was a broker, or an Ivy League economist. He's revealing a way with words.
"Last December," he said, around decade ago now, "my newsletter was hurting. The NASDAQ had crashed and our control was dead. So I wrote a brand-new package in two days and we went to the printer in under two weeks. I knew we had to have a big winner – and it worked. I won an award from my publisher – Best Package of the Year – in recognition."
Ah-ha times two. I'm sensing a pattern. Perhaps here's a handle on Mr Stansberry. He went on a course to learn the Masterson method, and turned it into cash, like he was promised. But can that ever be a foundation for analyzing markets? Could it be said to promote judgment over hype?
These are the kind of questions that I'm trying to answer. Whether I succeed is something else. You decide...