There's no doubt about it: Porter Stansberry is an effective marketeer of ideas about how to invest. From the figures I've seen, his output of mailshots - either directly, or through one of the numerous affiliates of his bosses at Agora Inc in Baltimore - he must be reaching hundreds of thousands of internet mailboxes, and a good many potential customers.
But just how good an advisor - or "equity analyst" as he describes himself here - is Porter Stansberry? In recent years, we have seen him predict the "End of America" and that Barack Obama would refuse to leave office at the end of his second term in the White House. However, real afficianados such as myself look back to his good old days when he was just warming up: declaring, for example, that the global Aids pandemic was over due to the discovery of a vaccine against HIV called "AidsVax".
That hot tip was in 2003, and it cost small investors then in thrall to his hype a bundle of money on the Nasdaq. Using mailshots and web promotions, he persuaded countless easy optimists on the receiving end of his advice to put their savings into a company called VaxGen, of South San Francisco. He did so, moreover, even as insiders and institutions were firmly shorting, ahead of AidsVax's widely-predicted failure.
The annotated Porter Stansberry
Below are extracts from his promostion for AidsVax, gleaned is a page, which I've annotated, from his website in January 2003. At that site, he bluntly claimed "proof" that "AidsVax" worked, despite the fact that my sources - scientists of international repute - were on the record as saying that it couldn't. In fact, soon after his hype, VaxGen stock collapsed to an opening price of $3.31 (52-week high $23.25) when the Wall Street Journal announced the results.
Porter Stansberry claimed copyright privileges to prevent me publishing the complete document, but as you see he invoked the Wall Street Journal in his opening tease for the stock. This was the headline wth which he sought to grab attention: a statement which, in itself, was probably true:
Day Now, a Wall Street Journal Story
Will Make a Handful of Investors Rich
After opening on this assertion, Porter Stansberry's crusade to draw the unsophisticated to VaxGen (Nasdaq VXGN) began with a friendly "Dear investor" greeting, and went on:
I've uncovered a business currently worth $250 million that will soon be worth several billion.
Wrong. It would soon be worth almost nothing.
Today, you can buy it for less than $20 a share.
In a matter of weeks, this stock will skyrocket when a story about it appears in The Wall Street Journal.
When the article appears, this company could see its share price jump from less than $20 a share today to $50... $100... $150... or possibly much more.
As indicated, it opened on the day the story appeared at $3.31. But he persisted with his WSJ angle, claiming that the upcoming report, had "the potential to make a small group of investors very rich" before barking:
only realistic chance to make 50 times
your money in the short term
Porter Stansberry watchers will recogise such promises. He seems to produce similar pledges almost monthly. And also familiar is his formula prose style, introducing himself well below his hook:
My name is Porter Stansberry. I'm an independent equity analyst. It's my job to find breakthrough investments - a job I've done for tens of thousands of investors for more than five years.
But this opportunity is, without a doubt, the greatest investment opportunity I've ever seen.
I'm talking about the only company in the world with a vaccine for HIV (AIDS) in final, Phase III clinical trials.
Right now, this full-scale AIDS vaccine test is in its last few months. It involves 5,400 participants in North America, Puerto Rico, and the Netherlands. And another 2,500 participants in Bangkok, Thailand.
As I mentioned, this is a Phase III trial. The final step before government approval. The U.S. Food and Drug Administration (FDA) requires such a test for every new medical treatment, before it can be licensed and sold around the world.
The final results from North America will be published in the next few weeks, in early 2003. The final results from Thailand will follow.
As soon as these trial results are announced - if they're as good as we expect - this company could get immediate orders for billions of dollars worth of its product.