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I've seen two advertisements for so-called "well known" financial analysts and reporters purporting to have inside information on grave threats to the economy. I visited the websites advertised in the commercials just to see what all the hype was about. It turned out both websites were sales pitches for high priced newsletters containing investment advice. Both were products of the same company, Weiss Research, Inc.

The first sales pitch was given by Martin Weiss. He claimed to have correctly predicted several ups and downs in the economy months or years in advance of the actual event.

The second was by Larry Edelson, who appears to be the editor for one or more of the publications being advertised. He also claimed to have predicted many of the same events.

I know shameless self-promotion when I see it and I have no intention of buying a subscription to their publication but just because they toot their own horn doesn't mean they aren't telling the truth. So what I'm wondering is:

  1. Did they accurately predict the event's they claimed to?
  2. Do the free rating lists they publish accurately reflect those companies financial health?
  3. Do they appear to give sound financial advice?

I tried to search for background information on Weiss and Edelson but everything I found pointed straight back to one of the numerous websites they control. Even the Wikipedia article was under review for deletion because there was evidence it had been written by someone associated with the company and didn't meet Wikipedia’s guidelines for accuracy and verifiability.

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It is many times the case that investment newsletter publishers make more money from sales of their newsletters than they ever made by following their own advice. It is best to be wary, as you have already decided to be. –  Dilip Sarwate Apr 19 '12 at 18:59
    
possible duplicate of Are Investment Research websites worth their premiums? –  littleadv Apr 19 '12 at 20:29
    
@littleadv This is a little different than "Are investment research websites worth their premiums", as this pertains to Ratings, not general advisory services. (The answer, at least mine, was similar though). –  Ellie Kesselman Apr 23 '12 at 1:22
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I just received an unsolicited e-mail apparently from a Larry Edelson which claimed "I have uncovered compelling evidence that the Chinese government is conspiring with Washington, D.C. to impoverish you and sentence your children and your grandchildren to lives of financial servitude." and then offering a way of avoiding this problem. Doomsday sayers should be evaluated very carefully... –  Dilip Sarwate Apr 23 '12 at 13:17
    
OK I subscribed to Weiss and have been less than impressed with his picks. You might mention that there are levels of advice for a price. Have you looked at Lombardi, another so called pundit? Thanks for the "heads up" Stanley P –  user7285 Sep 30 '12 at 13:03

3 Answers 3

up vote 2 down vote accepted
  • Regarding Martin Weiss, and Weiss Research

This company was a reputable rating agency for many years. See Weiss Research website, ratings section for a very different perspective on Martin Weiss's work than the websites with which he is now associated.

I checked both links provided, and agree with the questioner in every way: These appear to be highly questionable investment research websites. I use such strong terms based on the fact that the website actually uses the distasteful pop-up ploy, "Are you SURE you want to leave this site?" Clearly, something changed between what Weiss Ratings was in the past (per company history since 1971) and what Martin Weiss is doing now.

  • Regarding Larry Edelson

Larry Edelson seems to have been associated exclusively with questionable websites and high pressure investment advice since 2007. From 1996 through the present, he worked as either an employee or contractor of Weiss Research.

Let's answer each of your questions.

  1. Did they accurately predict the events they claim? Weiss Ratings were accurate during the 1990's, and widely respected through at least 2003, see findings by the United States General Accounting Office in 1994 PDF, that confirm that Weiss Ratings reports on insurance companies, maybe banks too, were more consistently accurate than those produced by the major credit rating agencies e.g. S&P, Moody's, Fitch. There was similar acclaim for Weiss ratings in the late 1990's, until about 2001.
  2. Do the free ratings lists they publish reflect this high level of accuracy? I don't think so, certainly not at the present time. In the past, their ratings were of course fee-based, not free. In fact, the Weiss Ratings website primarily offers fee-based ratings reports now, just as it had been doing in the past. I am not familiar with these new, free investment reports, and they don't seem to be the same as the high-quality fee-based reports associated with Weiss in the past.
  3. Do they appear to give sound advice, now? Well, there were charges filed against Martin Weiss and Larry Edelson by the U.S. SEC, settled in June 2009 PDF, (settlement included return, formally known as "disgorgement" of $2.5 million in investor funds):

On June 22, 2006, the Commission instituted settled administrative proceedings against Weiss Research, Inc., Martin Weiss, and Lawrence Edelson (collectively, “Respondents”) for violations of the Investment Advisers Act of 1940 in connection with their operation of an unregistered investment adviser and the production and distribution of materially false and misleading marketing materials.

Full details about Weiss Ratings operations, including its history from 1996 through 2001, when it operated in compliance with securities laws, then from 2001 through 2005, which was when the SEC filed charges for regulatory violations, are available from the June 2006 U.S. SEC court documents PDF.

Finally, this quantitative assessment, "Safe With Martin Weiss? (December 2010) by CXO Advisory (providers of "objective research and reviews to aid investing decisions") for its readers concluded the following:

In summary, the performance of Martin Weiss’ premium services in aggregate over the past year is unimpressive.

The study methodology was good, but I recommend reading the article (I posted the URL) to fully understand what caveats and assumptions were done to reach that conclusion.

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I would say that only the first of the two quotes is what really answers the question. Everything else is quite irrelevant. Bottom line is that they've been found to be lying, were forced to return millions of investors' funds, and had to settle a suite brought up against them by SEC. If anyone trusts them after that they deserve anything they get (or lose, more likely). –  littleadv Apr 23 '12 at 2:07
    
I'm not going to edit your answer. Those who settle in case of a lawsuit are not innocent. They're proven guilty, they wouldn't have to settle otherwise. The settlement is to avoid certain additional legal implications, but it doesn't leave them "innocent". It merely means that they were not criminally prosecuted for something they've admitted to have done. Don't take it personally, but reading your answer it is not really clear whether you're saying they're good or not. Until that quote I was pretty sure that your point is that they're actually trustworthy. –  littleadv Apr 23 '12 at 2:36
    
@littleadv I was trying to say that the first quote was the allegation, not the settlement. I was wrong, and corrected that. Thank you for pointing it out, as I wouldn't have noticed otherwise! I also removed some of the extra stuff about credit ratings agencies as it was irrelevant. You were right in every way. I was wrong. Thank you again for your help. –  Ellie Kesselman Apr 23 '12 at 2:43
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@littleadv I would disagree with your assumption that defendents who settle must be guilty. There are plenty of leeches that use threat of law suites to squeeze money out of people that cannot afford the costs of a lengthy legal battle. That being said, Weiss & Co. are clearly more interested in selling a product than honesty. Dispite the slap on the wrist by the SEC they continue to market their successes without mentioning their failures. –  Kenneth Cochran Apr 23 '12 at 14:31
    
Ironically, a targeted search of several news websites (Marketwatch,CNN Money) shows that the new media views them as a credible source for their articles. –  Kenneth Cochran Apr 23 '12 at 14:41

Weiss Ratings is an independent company providing data and analysis for the bank and insurance industries. We’ve published the Weiss Financial Strength Ratings for banking institutions and insurance companies since 1989 and continue to use the methodology praised by the GAO back in 1994. Weiss Ratings has consistently graded failed institutions in the lowest Weiss Rating tier at the time of failure. We invite you to look at the Weiss Ratings' track record.

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Hi Weiss Ratings PR-dude. On behalf of the Internet, I would like to personally thank you for being up front with your identity and affiliation here instead of posting under some fake name pretending that you're someone else. –  fennec Apr 26 '12 at 1:55

It is a scam organization praying on fear of the simple minded. The facts Edelson presents are not accurate - http://www.sec.gov/litigation/admin/2006/ia-2525.pdf

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This answer doesn't really add anything new to the discussion. @FeralOink already provided a link to that publication. Besides they were charged with acting as an unregistered investment adviser, not fraud. –  Kenneth Cochran Jul 20 '12 at 22:00

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