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Author: ClientNine Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 21526  
Subject: Contrarian Indicator, age 44 Date: 5/5/2011 5:10 PM
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I just got back from lunch with BRGuy, who remains a very nice person despite the fact that he doesn't post on Liquid Lounge or Deranged Monkey anymore. We ate at a restaurant in Manhattan Beach with very closely-packed tables, and the woman next to us couldn't help but overhear what we were saying. Our conversation turned to Berkshire, since we were both in Omaha last weekend.

At that, the woman piped in. "Oh, you have Berkshires? I hear they're being used as currency in some parts of the country. Do you have any on you? I'd love to see it in person"

Me: "We were referring to a specific company."

BRGuy: "Yes, Warren Buffett's holding company and insurance company Berkshire Hathaway. Is that what you were referring to?"

Woman: "No, that's not it. It's some sort of alternative currency. I read about it on a web site called TheEndOfAmerica.com (or something). They've got a video from a guy whose name sounds like Salisbury Porterhouse."

BRGuy and I whip out our iPhones and quickly find out what's going on. The woman was referring to BerkShares, some sort of scrip that functions like an alternative currency in certain parts of Western Massachusetts. While the name is appropriate to the region, I'm sure it was chosen to elicit maximum confusion with Berkshire Hathaway shares:

http://en.wikipedia.org/wiki/BerkShares

The web site she was referring to is http://www.endofamerika.com/aff/wia/black-swansaff/, which shows this video (http://www.youtube.com/watch?v=nI-BIVWlc7A) for those who want to check it out without giving your email to someone who will helpfully warn you about a new, imminent apocalypse every other week. It's run by Porter Stansberry, a newsletter publisher who has a checkered past.

After we told her to avoid investing in BerkShares, she mentioned that she and her husband were also considering an investment in precious metals.

BRGuy: "How were you thinking about investing in metals?"

Woman: "Well, I've attended seminars from Goldline. Glenn Beck is involved somehow."

http://www.ritholtz.com/blog/2010/07/glenn-beck-goldline/

Me: "Do you understand how Goldline gets paid?"

Woman: "They take a small commission, don't they?"

Me: "They take a commission. It's not small."

BRGuy and I encouraged her to avoid investing in Goldline.

Woman: "I also have an investment in silver. This one is an exchange traded fund, SLV, that I bought with my IRA at Schwab."

BRGuy: "OK, that's better. An ETF has low fees, low spreads, and high liquidity."

Woman: "Good. I'm glad I got something right. I bought it last week."

http://finance.yahoo.com/q/bc?s=SLV+Basic+Chart&t=1y

Woman continues: "And I have a silver mine, too -- in Montana. My brother-in-law in Montana is excited about it."

Me: "You should really leave investing in mines to professionals. I'm a pro and I just got killed this week in a small holding in a gold mine."

Woman: "Actually, now that I remember, it's not a silver mine. It's an oil company, Northern Oil and Gas."

http://brontecapital.blogspot.com/2011/03/northern-oil-and-g...
http://brontecapital.blogspot.com/2011/03/northern-oil-and-g...
http://brontecapital.blogspot.com/2011/04/northern-oils-expa...
http://brontecapital.blogspot.com/2011/04/northern-oils-expa...
http://brontecapital.blogspot.com/2011/03/northern-oil-relat...

Me: "I know them! They're run by the Reger family, and they have a very dubious reputation. I would never want to invest in their company."

BRGuy agrees with this interpretation. The woman thanks us, then steps outside to call her husband and tell him about her amazing conversation. BRGuy and I decide to give her a little advice, so we recommend that she make a small investment in TILDX and research the fund manager and his investment philosophy. After she left, BRGuy looked at me and said, "I'd pay $10,000 a year just to see what she's buying and when."

Best,
C9
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