From:
North of Jewfish Creek

Dear Friend & Subscriber,

You are now reading what can best be described as the first issue of the 2nd generation of The Gary Halbert Letter.

In what I now think of as the first generation of this newsletter, I wrote and published 118 issues. When I started, it was just me and a young lady named Paulette working out of a Dilbert-type cubicle on the penthouse floor of a large office building located at 9255 Sunset Boulevard near the boundary line of West Hollywood and Beverly Hills.

I'm somewhat proud of the 118 issues that make up the first generation of this newsletter. Taken as a whole, it is a rather astonishing body of work that has generated untold hundreds of millions of dollars for a surprising amount of people located not only here in the U.S. but also, all over the globe in more than 50 different countries. And, it will continue to do so, I believe, for many generations to come. True, much of what I have written was timely but, a significant portion of it is virtually... timeless!

Fundamentals don't change. After all, that's why they are called fundamentals. "Do unto others as you would have them do unto you," was good advice 2,000 years ago; it is good advice now... and...

It Will Be Good Advice
2,000 Years From Now!

However, even if fundamentals don't change, technology does. In fact, technology is changing so fast nowadays, it is having an enormous effect on us as a society. We can now communicate faster, sell faster, buy faster, lie faster, steal faster, sicken each other faster, get rich faster, go broke faster... and... most importantly... we can lose our way... faster than ever!

Never before has society been so well-informed... and... so bewildered. Everyone is going around saying "Information is King" and, "Access to information is what makes the difference between winners and losers." Not true. If it were true, everyone who owns a computer and has access to the web would be rich. Information is important but, it is just a tool. As far as success is concerned, there is only one element that is "king." It always has been "king," it is now, and, it always will be. What is this essential element that is at the core of all successful endeavors? Simply this:

Proactivity!

Proactivity is the real difference between winners and losers. Losers simply absorb information and, at best, they just react to it. Actually, these days, there's such an incredible glut of information, most of us are simply numbed by it. Winners, on the other hand, when they get good info... they act on it. And now, good info is easier and faster to get than ever before... and... therefore, a "proactive" person now has available to him, instant access to "information tools" that, if used properly, can help him succeed faster and on a larger scale than ever before.

Why am I going on and on so much about this? Well, guess what? Right now, as I write this, I have at my side a brand new GATEWAY 2000 PC. It's got an Intel 233 MHz Pentium processor with MMX Technology, an EV500 .28 Screen Pitch 15" monitor with a 13.9" viewing area, a super-fast TelePath modem with X2 Technology, a Canon BJC printer, a 16MB SDRAM and 512K Pipelined Burst Cache, two Esoniq Wavetable Audio (with Altec) speakers and a nifty, stand-up, desk-top microphone which lets me use my PC as a speakerphone.

This whole set-up costs only $1,499.00 and it's perfect for a person like me. As far as PC's go, it's truly a no-brainer. It's the electronic equivalent of going to McDonald's and ordering Value Meal #3. I connected all the parts together... all by myself... and I use this sucker every day. One guy, a true computer pro, said he'd never seen anyone start at ground zero and become computer literate as fast as me. (I guess he doesn't have any teenage kids.)

Sort of a surprise, isn't it? Actually, it's even more surprising to me. What has happened? Well, this has all come about because of a recent experience I want to tell you about: A few months ago, I get a call from an old friend who tells me he's working with some people on a really exciting new project and he's told everyone involved I would be the perfect person to create and oversee the marketing for this project. We arrange a conference call between myself, himself, and the other principals involved. In October, I had to fly to California because of my youngest son's wedding... and... that made it convenient for me to meet the CEO of this company in person at the Miramar Hotel in Santa Monica.

I was very impressed with this guy and, to make a long story short, I signed on board to do the marketing for his company.

What I did first was create a full-page ad that ran twice in the same month (December, 1997) in Investor's Business Daily. This turned out to be one of the most effective ads I've ever written. And, in order for you to better understand this story, I've enclosed a copy of that ad with this issue of my newsletter and, I need you to read it before I continue.

So, do it! Don't just sit there like a lump on a log staring at your navel. Unfold the ad and read it...

Right Now!

Zowie! Is that one bitch of an ad or what? Now listen: As you know, I'm not one to brag.... but... that ad produced an incredible response... and... I think it's fair to say it literally electrified the investment community all over the world.

OK, part of what I was hired to do for this company was to simply "hover" over everything  going on. Now, understand this: The first time this ad ran in Investor's Business Daily, it was strategically timed to appear as the company CEO was overseas with his "team" trying to impress bankers and other big time investors. In other words, part of the job of this ad (other than the obvious) was to be an effective tool in the "pitch kit" of this little team of vultures who were going after serious investment money. Anyway, as part of my job of "hovering," I decide to call the 800# mentioned in the ad a couple of days before the ad breaks. What I get is one of two things: Either a busy signal... or... some idiot on the phone who couldn't qualify for a job at McDonald's and can't even correctly pronounce the name of the company. Let alone talk intelligently to whomever was calling.

I call an old friend of mine, Laura Charles, and get her to drop everything else she's doing and fly to Nebraska where the 800# service is located, be a "Nazi Bitch" and whip them into shape. She did a magnificent job. She gets them to put on ten more operators, answer the phone live 24-hours per day and teaches them how to properly respond to the calls.

The ad breaks, the calls start flooding in and, thanks to Laura, the calls are all handled the way they need to be handled. Now, if you'll recall, near the end of the ad, the reader is asked to call the 800# and leave his name and address in order to receive a video featuring the inventor explaining what he has invented and the company CEO giving an overview of the company and its plans for expansion. That's not what I wrote in the first draft of this ad. In the first draft, it said something like, "There's an investment opportunity here but, it's not for the little guy. However, if you or your organization can invest $50,000 or more, this is a situation worth looking into."

That verbiage was eliminated because the company's attorney said it wasn't legal for this company to solicit for investors. His suggestion was to replace that part of the ad with a simple request for the reader to buy the product. I told him it would be idiotic to pay $14,000+ to buy a full page in IBD just to sell a consumer product that retails for $19.95 and, if that was the law, we ought to just cancel the ad. Well, the powers that be didn't want to just scratch that ad so, the ad ended up saying something about "being passionately committed to producing this amazing new invention... as fast as their financing will allow them to expand."

Alrighty, now we've got the ad copy approved by the company's wonderfully-astute attorney, we're getting the phones answered promptly and properly and, the day before the CEO and his team left for Europe, they shot the raw footage for the video that was going to be sent to all the callers who responded to the ad.

The video footage sucked.

It began with the "60 something" inventor trying to impress the young people assembled for the taping with a rap song about his product... and then... it went downhill from there.

Good God, what could possibly be in any adult person's mind that would make him think a video tape of him mouthing a rap song would impress a would-be investor? Whatever. It was obvious the video would have to be HEAVILY edited before it could be sent out so, I wrote a one-page letter to all the callers which said in part:

Now, of course, this dysfunctional company I was doing all this world-class work for didn't have anybody who could actually type this letter and get it mailed out... so... I had my trusty assistant, Theresa, get that job done.

Let's fast forward just a little bit in time. Now we are somewhere in the middle of January of 1998. The ad you just read has appeared twice in Investor's Business Daily. Thousands of calls have come in and been handled properly and all the names, address and phone numbers of the callers have been captured. Each caller has received a letter offering more info without having to wait to get the video. These people are hot to trot! They've read a full-page ad, responded to that ad... gotten a personal letter inviting them to call the company direct, responded to that letter... and...

They Can't Get Anyone In
The Company To Talk With Them!

These people don't care about the video. They want to invest in the company! They volunteer they are accredited investors (I'll explain the significance of that another time) and they have $50,000... or... $150,000... or more... they want to invest! They not only call... but... they are call back six, seven, eight times or more. We'll never know but, I believe that ad (which cost about $14,000) would have, if handled properly... generated around $150,000,000!

I flew to California to try to help these people. I stayed at the Oakwood Apartments in Newport Beach for an entire month. But, it was useless. The CEO was so screwed up, so dysfunctional and so obstructive to the growth of this company, it was impossible to help him. By ineptness and constant failure to keep his word, he was like a human tornado ripping through a trailer park of humanity leaving dozens of good people damaged, bewildered... and incensed. At first, I kept trying to clean up his messes. But... I couldn't keep up! I felt like a guy with a snow shovel running behind a team of Clydesdale horses with diarrhea trying to shovel up all the shit being left behind before more people started to drown in it.

It was hopeless. But, you know what? I now believe, from a financial point of view...

This Is The Best Thing
That Ever Happened To Me!

You see, what these people were trying to do was, take their company "public" so shares of stock in the company could be legally bought and sold on one of the major exchanges. Previous to this experience, I knew next to nothing about the process of "going public" and, I had almost no interest whatsoever in the stock market.

That's all changed now. What I've discovered is there is so much money to be made in the stock market... and... it can be made so easily, it is almost beyond belief. First, Americans have more money invested in the stock market right now than ever before. Currently, stock investments make up 28% of the total wealth of U.S. households. This has more than doubled just since 1990, when it was only 12%. Americans, now have, for the first time ever, more money invested in the stock market than they do... even in real estate!

Best of all, most people who invest in the stock market are "total financial idiots." They make most of their stock buying decisions based on the advice of their personal stock broker... or else... on the advice of high-priced stock market "experts." Stock brokers, in general, are not investment experts... they are salesmen. And, for the most part, they are stupid and/or unethical to an astonishing degree. Stock market "experts" are truly a joke.

Have you ever heard of the "Dartboard Index"? Here's the way it works: Every six months, staffers of the Wall Street Journal throw darts (literally) at a listing of all the stocks on the market. Then, they track those stocks to see how well an investor who bought those stocks (selected by the Dartboard) would have fared against the Dow Jones Index and versus a consensus of the expert's opinions. Here's the results for the last six months:

Think about it. These experts are among the most respected in the country. They include William P. Miller of IDS Equity Investors (his was the only stock pick that actually went up), Jeffrey Meyer of Brandes Investment Partners, and Christopher O'Keefe of Compu-Val Investments. These people don't come cheap! They, and others like them, are paid enormous amounts of money for advice, that seems to me... just plain silly. Ask any of these experts what makes a stock price go up or down and they'll give you what I consider to be totally "off-the-mark" answers. "The PE ratio was up," they'll say. Or, "The company has developed a new microchip or something else that solves a problem faster, easier and cheaper than ever before."

None of that is what makes a stock price go up or down. What does? It is the NEWS of some development. Get that straight in your head. It's not the development itself: It's the news of that development. Therefore, the way to win when you play the stock market is simply to know the news before anyone else! Imagine this: Imagine you know tomorrow there is going to be a "rave" story in the Wall Street Journal about how ABC Widget Company has (ready-to- market) a secret, new gizmo that turns ordinary tap water into champagne for less than five cents per gallon.

Guess what's going to happen to the price of ABC's stock when that story hits the front page of the Journal? It's not hard to figure out...

The Price Of The Stock Is
Going To Skyrocket!

Now, imagine this: You already know this article is going to appear in the Journal. In fact, you know the writer is going to be writing about it even before the writer knows it himself. In fact, you know about this development... even before... anyone in ABC Widget Company (including the CEO) knows about it. Let's say the stock is now selling for $10.00 per share and, you know it's going to jump up to at least $15.00 per share when the news breaks.

What do you do? Go out and buy shares in ABC and then cash in when the story hits? Not a bad idea. For $10,000 you could buy 1,000 shares... and then... the next day, you could sell at $15.00 per share and make $5,000 on your investment.

Sound good? But wait. What if you didn't buy those shares... but instead... you "optioned" them for about 5% of their value. Doing it like that would give you control of 20,000 shares. Then, the next day when you cashed in, your $5.00 per share profit (minus the 50 cents you paid for the option) would be $4.50 per share times 20,000 shares... which is...

$90,000!

How can this be possible? How can you know the news before anyone else, even the people who run the company... and how... can you know exactly when the news is going to break before anybody else?

I'm not going to tell you.

The most profitable money-making secret I ever came up with was the one that created the family crest company (Halbert's Inc.) which still exists today and has generated hundreds of millions of dollars. I came up with that idea back in 1968 and, it's taken me 30 years to come up with one that's even better... maybe even 100 times better.

However, even though I don't intend to tell you how this secret works, I will tell you how you can profit from it. I'm going to do it in almost every issue here on out in this 2nd generation of my newsletter. Why is this secret so much better? Because, with this one, you don't have to hire anyone, create anything, market anything or even talk to another human being. You know, the time has truly and finally arrived... when... it is actually possible to become a multi-millionaire while sitting in a canoe with nothing but a laptop PC, a modem and a cell phone!

However, I'm going to be more effective at teaching you about all this if you will do a little "homework." First, I want you to become aware of just how dishonest and unethical people who sell investments to the public really are. The best way you can do this (and it will leave no doubt in your mind) is to read a new book called F.I.A.S.C.O. subtitled "Blood In The Water On Wall Street" by Frank Partnoy and published by W.W. Norton & Company, Inc.  (ISBN 0-393-04622-2).

Just read it. You won't believe it. But, I believe it. After my recent experience with "Financial Sodomy Inc." in Irvine, California, I know this writer is not exaggerating. By the way, when you are trying to "go public" and/or raise investment money for what is to be a publicly-traded company, you need something called a "stock evaluation report" written by an expert. The one for "Financial Sodomy Inc." was written by a snot-nosed, 27-year-old kid in Aspen, Colorado who actually, for reasons unfathomable to me, is entitled to hold himself out to be an "Investment Banker."

You know what this guy's sophisticated, financial evaluation says the worth of this company will be in December of 1999? Just 24-months from when he created this truly "creative" official-looking report? How about more than...

One Billion And
700 Million Dollars!

That's pretty good, isn't it? After a careful and judicious analysis, this guy concludes this company... that cannot... at this time... answer its phones or even get a letter typed... is somehow going to "morph" into a debt-free company worth upwards of two billion in less than two years. That's like saying we're on the verge of having peace in the Middle East. (Lord, I've seen screwed-up companies before but, I've never seen anything like this where there was nothing but "chimps-in-the-cockpit.")

Anyway, I also want you to immediately read another book called WallStreet.com subtitled "Fat Cat Investing At The Click Of A Mouse!" This one's by Andrew D. Klein and published by Henry Holt & Company, Inc. (ISBN 0-8050-5758-7).

And, go get your silly ass a copy of the Jan/Feb issue of Internet Shopper which features a story on Online stock trading and compares 45 different Internet Brokers. By the way, one of the pioneers, and one of the best of the online brokers, is located at http://www.etrade.com.

Plus, there's one special web site I want you to log onto and surf around a little. Just have your search engine find "IPO CENTRAL." I know, I know. This is all starting to sound like "work"... but... trust me, there just might be a big payoff here. So, stop bitching and boot up. And, here's even more web addresses with which I want you to become familiar: http://www.firstcall.com; http://www.investools.com; http://cybersurfing.com and finally http://www.investor.com.

Now, I gotta tell you, the main reason my trusty GATEWAY 2000 sits at my side... is... because it is such a superb tool for the research I now do on the stock market. But, there is a second reason: You know, there's hundreds of web site experts out there now... that will... for a hefty fee, set up a web site for you so you can make huge profits on the Internet. The problem, of course, is none of these jerks actually know how to make a profit on the Internet; they only know how to make a big profit by lying to you about how they can teach you how to do it. People who say they can do this remind me of people who sell ad space in the yellow pages. Their pitch is, they can help you design your yellow age ad so you will make mucho fungolas.

The problem, of course, is they haven't a "clue" how to actually make a yellow page ad profitable; they only know how to sell space in the yellow pages. A web site can be a profit center... but only... if it is designed by a real salesman! And, the fees now being charged by "image" advertising idiots are getting so outrageous that someone (and I guess that's gonna have to be me) needs to step in and lay a little sobriety on everyone involved.

There's a company in Irvine, California called "Electronic Media Communications" or "EMC" for short. They offer to do all kinds of electronic publicity including preparing television press kits, arranging television news story placements, creating satellite media tours, video news releases, radio media tours, radio news releases, radio public service announcements, getting your story on the various wire services... plus... various other services including helping you set up a web site. Here, word-for-word is the part about web sites written in one of their recent multi-page proposals:

Well now, let's see: If my math is correct, all these good folk want is $222,000 to create, maintain and publicize a web site. Gosh, they must be pretty good at it, huh. Oh wait! I see on their letterhead, they have a web site themselves. I bet it's a doozy. It's http://www.emcnews.com. Hmn, maybe before I go any further, I should boot up my trusty GATEWAY and see whatever it is these electronic wizards have created for their own company.

So hang on a minute. Sir Gary of Halbert is going on-line. (I never thought I would ever write or say those words.)

Wow! What a web site! It's got color! It's got words! It's got... uh... let's see... well, it's got color and uh, it's got words. My guess is, the creation of this web site ought to have cost... oh say... maybe a dozen pizzas and a couple of 6-packs of Coke for some geeky high school student. And just look at the roster of big corporate clients listed on their web site who have retained these wizards for web site creation and their other services. You know, I'm in the wrong business. I work my ass off to create multi-page letters and long copy ads that actually sell stuff at a profit... as opposed... to those heavily credentialed (truly) pros who get paid zillions to create vapid, good-for-the-client's-ego, "image-building" ads that are about as far from a good sales pitch as Bill Clinton is from being "Husband Of The Year."

Stay with me. In my next issue of this 2nd generation of my newsletter, I'm going to start giving you the true scoop on how to make money with your PC, how to play the stock market with a truly unfair edge... and... the sober way to create a profitable web site.

Does this mean I'm switching over to making this a stock market and/or electronic marketing newsletter... instead of... the stuff I usually write about? No, it only means I'm going to add these topics to what I already write about. I'm still the same Gary Halbert you've learned to love and to hate, the guy who both inspires and frustrates you... but... I'm out of the bag now. I'm loose, running around and...

I'm On-Line & Dangerous!

You just wait.

	Sincerely,
	Gary C. Halbert

Copyright © 2003 Gary C. Halbert.  All Rights Reserved.