A longtime subscriber is worried... Porter: 'My goal was very simple'... One mistake we won't ever make...
Today's Digest is a little different...
Last week, we received an e-mail from a concerned longtime subscriber.
In short, he was worried our business is changing. And if you've been with us for long, you may share his concern.
As you'll see below, it "struck a nerve" with Porter, too. You don't want to miss his response – and promise – in today's mailbag...
New 52-week highs (as of 9/4/15): National Beverage (FIZZ).
In today's mailbag, Porter responds to a big worry from a subscriber. Send your questions, comments, and concerns to feedback@stansberryresearch.com. Please note, we can't respond to every e-mail, but we read them all.
"Hello, I've been a happy Alliance member now for a few years and have greatly enjoyed your products. I have noticed quite a big advertising push recently with ads on Yahoo and Ron Paul videos, etc. Then at some point Porter wrote an apology to everyone based on poor customer service due to greatly increased volumes of new clients.
"I originally subscribed hoping that Stansberry would have some level of exclusivity. I understand you make money by signing new clients, but it can be a disadvantage to your current customers to have thousands of new investors following your recommendations and putting in orders for them at similar times. Especially with options, some of which are thinly traded.
"I'm not complaining as my service has been good and I really like the products. I just have a feeling in the back of my head that things may change and I don't want that to happen. At this point, it's a sunk cost for me, so I have everything to lose. I just want the product to be as good (or better) 10 years from now as it is today. Please don't disappoint all of us by being greedy at the cost of good service and excellent products. I've seen it happen many times before." – Paid-up subscriber Joe Hanna
Porter comment: Joe, your e-mail was passed around our office today. One particular comment struck a nerve with me:
"I just have a feeling in the back of my head that things may change and I don't want that to happen... I just want the product to be as good (or better) 10 years from now as it is today. Please don't disappoint all of us by being greedy at the cost of good service and excellent products. I've seen it happen many times before."
You will have to be the judge of the quality of our products in 10 years... and obviously, I cannot predict the future (as too many of my stock recommendations prove). But Joe... just look at our track record of investing in our products and people!
Is there another research firm in the world that has made the kind of investments we've made over the last 10 years in innovating new products and in hiring new, extremely experienced, brilliant people? For example, 10 years ago (2005), the entire Retirement Millionaire franchise didn't exist!
I know having Doc Eifrig on our team has added tremendous value to our subscribers. Doc is a world-class investor. Are there other research firms out there recruiting independently wealthy, former prop traders from Goldman... who are also MDs and have vast experience in medical research?
Likewise, we've made very valuable additions to our Stansberry Alliance product portfolio – including our most profitable and popular services, like Doc's Retirement Trader, Brian Hunt's DailyWealth Trader, and my own Stansberry Alpha options-trading service. But, true to our word, we've never asked you to pay a penny extra, no matter how many high-quality products we've added to our lineup.
That's just the obvious stuff, though. Look deeper. Look at the content itself...
For example, bring up an issue of my newsletter from 10 years ago. Read it. Now read an issue from this year. Notice anything?
Ten years ago, I wrote the letter essentially by myself, or with the help of a not-so-smart intern. Today, I have a research staff of seven people, including a PhD candidate (Dave Lashmet), two CPAs with experience in "Big Four" auditing and forensic accounting (Bryan Beach and Mike DiBiase), an international business consultant with 25 years of experience in foreign markets (Brett Aitken), a former top trader at Legg Mason (Jamison Miller), a timber specialist (Bill Shaw), and a top patent attorney (Bill McGilton).
This staff has allowed me to vastly expand the areas we can cover effectively in my newsletter – including areas of the market that most investors have no ability to analyze.
In particular, notice our coverage of the medical field (cancer vaccines and new antibiotics), insurance, and high-yield bonds over the last few years. All of this in addition to our long-standing coverage of the oil and gas industry, digital technology, capital-efficient companies, and what we call "victim" stocks.
I would happily put the content of my newsletter up against any research product from any firm, at any price, anywhere in the world – especially when you consider our work in specialty areas, like insurance, and oil and gas. There's just no other firm that comes close to the quality of our work. For example, I challenge you to find a better, more comprehensive overview of the insurance industry than our monthly Stansberry Data Insurance Value Monitor.
There's no research like this available anywhere else – not even from the big investment banks. By investing heavily in these tools, we can do a better job in our newsletters.
And speaking of tools... do you have any idea how much money we've invested in computer systems, computer programming, and data sets over the last decade? Look at what Steve Sjuggerud has built with his True Wealth Systems – it's an entirely automated, completely objective way to trade dozens of markets. And unlike a lot of "quant" funds built by Wall Street's hedge funds and banks, True Wealth Systems has a great track record.
All of these things cost a lot of money. More than you would believe if I told you, Joe. Tens of millions of dollars. And making these investments has reduced our operating profit margin substantially – I'd estimate by at least 50%. Please understand, though, I'm not complaining.
This is a deliberate strategy. We have always invested heavily in our business. But it wasn't until around 10 years ago that we had enough marketing success to afford really big investments in people and products. We will certainly continue to invest heavily. This year, in fact, we've invested more than $60 million into our business – a huge investment that speaks to the confidence we have in our future.
When I sat down at my kitchen table in 1999 and mapped out the strategy for the business I wanted to create, my goal was simple. I wanted to build a Morningstar for individual investors. I wanted to provide people with the tools to be successful running their own stock portfolios, and I wanted Stansberry Research to be the most trusted and valuable brand in the business.
That's still my goal today. And that's why you'll continue to see us make huge investments in our business and take losses when we believe doing so is in the best interest of our clients. For example, even when we have products that are profitable for us (like Real Estate Shareholder in 2006 or True Income in 2012), if we doubt we can lead our customers in the right direction, we immediately cancel those products. And that's why we – unlike any other group in our industry – constantly review the quality of our products and our people, assigning them an actual grade each year and letting go of the people who can't meet our standards.
These policies are difficult and expensive. But they're exactly what I would expect if our roles were reversed.
Joe, I know that we're not perfect. We've made plenty of mistakes along the way. But the one mistake we won't ever make is doing anything to lower the quality of our products. Our approach is the exact opposite of what you're suggesting we might do.
Please, don't fear our marketing success this year. These revenues will allow us to continue to make these big investments in quality and to develop new and even more useful tools to help you make better investment decisions. We are only getting started.
And one more thing... I think the quality of our free services – The Digest, DailyWealth, The Crux, and Growth Stock Wire – is very underappreciated by Alliance members, simply because we don't charge for them. I can't tell you how many times over the last decade I've seen my Friday Digests circulated among the world's best investors, including Warren Buffett. Look at this content and see if you agree that it continues to improve. And if you disagree, don't be afraid to let me know.
Regards,
Justin Brill and Porter Stansberry
Baltimore, Maryland
September 8, 2015
|