About The Cheap Investor
Founded in 1981 by Bill Mathews, The Cheap Investor is a financial newsletter that helps individuals choose “quality stocks trading for less than $5 per share.” The company claims to be 100% independent, and to help you take “control of your own financial future.”
The Cheap Investor newsletter is produced in collaboration between Core Capital Media, LLC and Mathews and Associates, Inc, both of which are based out of Omaha, NE. Despite their length of time in business, and the fact that The Cheap Investor has been featured in the Wall Street Journal, Barron’s, BusinessWeek, and more, neither company is listed with the Better Business Bureau. However, online customer reviews appear to be mixed, with the most common complaints claiming that The Cheap Investor is part of a pump and dump scam, in addition to poor customer service.
How The Cheap Investor Works
According to the company’s website, at its most basic, The Cheap Investor is all about helping you pick solid companies with “cheap” stocks, and then selling at the high point of their cycle, thereby allowing you to make a “tidy profit.”
To back this up, the company claims to provide “actionable insights” that have a five-year track record of +183% average gains. In fact, according to the company’s website, “For the 5 years ending December 2013 (our last accounting), we have recommended 276 winning stocks out of 277 chosen, with average gains of 183%.” This information is published directly on their website through a series of charts and graphs, while they also claim to provide their entire 30-year record to paid members.
With this in mind, The Cheap Investor explicitly does not provide personalized investment advice, leading some to accuse the company of providing the “easy” information, while investors are left to their own devices on the “hard” ones (see more about this in the Bottom Line section).
The Cheap Investor Pricing & Refund Policy
The Cheap Investor annual subscription is currently priced at $697, which includes access to The Cheap Investor “premium website,” “the 5 ‘Deep Value’ Stocks for 2014 and Beyond” special report, and the 148-page e-book titled Making BIG Money in Small Stocks. In addition, you’ll also receive four free research reports:
- Get Rich in Small Stocks
- Top 5 Biotech Bull Report
- How to Make the Most of The Cheap Investor
- Top Bankrupt Stock
Your Cheap Investor subscription can be cancelled any time within the first 60 days, at which point you’ll be eligible to receive 100% of your money back. Also, keep in mind that your subscription will automatically renew on your yearly anniversary, and your credit card will be charged accordingly.
To request a refund or to cancel your automatic renewal, you’ll need to contact customer service at (877) 306-4256 or email@example.com.
- A monthly newsletter that claims to be 100% independent, and to help individuals choose “quality stocks trading for less than $5 per share.”
- In business since 1981.
- 60-day money back guarantee.
- Numerous complaints of a pump and dump scam.
- Difficulty receiving a refund.
Bottom Line: Is The Cheap Investor a Scam?
While we didn’t uncover anything during our research that lead us to believe that The Cheap Investor is a scam, it does appear to operate similarly to The Ultimate Wealth Report, which is also accused of being a pump and dump scheme. This article puts it fairly well: “It’s funny how these guys want to tell you when to buy the stock, but it’s up to you to figure out when to sell it. But it’s when you sell that you make or lose your money. Selling is the hard part. And they know it.” The author then goes on to say, “The Cheap Investor makes it look easy because they redefine what “winning” is. Again, they don’t tell you when to sell the stock – generally considered the point at which an investment can be considered a “winner” or “loser”.” In other words, The Cheap Investor isn’t picking winners, it’s manufacturing them.
With this in mind, however unethical pump and dumps schemes may (or may not) seem, they are not illegal by definition. So if you’re planning on subscribing to The Cheap Investor and basing your investment decisions on its advice, it’s highly recommend that you learn the market signals that indicate when it’s time to sell. Otherwise, you could be left holding a bag of stocks worth much less than what you originally paid for them.