WHERE IS THE SEC?
JAMES DALE DAVIDSON, B.A., M.A. M. Litt. (Oxon), is the Chief Financial
Officer/Secretary and a director of the Company and of GeneMax Pharmaceuticals.
------ from the desk of James Dale Davidson -------
agora-inc.com
from offshorebusiness.com
November 30, 1998
James Dale Davidson, Agora Inc, Lines Overseas Management and William Rees-Mogg
We have uncovered more evidence this month that casts a negative light over the claims of investment success of James Dale Davidson, whose business interests in Bermuda include Lines Overseas Management and Strategic Advisors Overseas.
In defending a comment from a reader of Davidson's newsletter 'Strategic Investment' called 'Fritz' that his investment advice was 'witless', Davidson claimed: "It would be tempting for me to take a small-minded view of Fritz's comment, given that our 'witless investment advice' in the Wealth Builder Portfolio had, at the time of his post, outperformed the S&P 500 and the Dow for the year by a broad margin. Indeed, as of September 10, the Wealth Builder Portfolio was up by 38.54 per cent for the year."
"That is not the whole story," continued Davidson. "David Tice's Strategic Shorts Portfolio is also turning in a more than 'witless' performance, with a gain of more than 20.3 per cent so far in 1998. While trillions in wealth are evaporating around the globe, we have told you how to make money. That said, I would simply be ducking behind a technicality if I simply dismissed Fritz's concerns by demonstrating that he could have outperformed every major market in the world by following our advice this year…"
The reality, however, would appear to be somewhat different to Davidson's hyperbole.
US-based Mark Hulbert, whose Hulbert Financial Digest (www.hulbertdigest.com) independently tracks the performance of investment newsletters, said that, far from increasing by 38.54 per cent, Strategic Investment's '$100,000 Wealth Builder Venture Capital Portfolio' had plummeted by 63.2 per cent for the year to August 30, the closest figures he had to the September 10 performance deadline mentioned by Davidson.
Meanwhile, David Tice's Strategic Shorts had, indeed, risen in value, by 7.4 per cent for the year to August 30, but that is still a long way short of the 20.3 per cent gain for the year to September 10, as claimed by Davidson.
Hulbert's method for calculating returns is very simple. He enters recommendations contained in investment newsletters into a computer and lets it calculate returns.
One of the difficulties with interpreting Strategic Investment's performance, apparently, is the vagueness of recommendations.
Davidson will often recommend stocks or positions without telling readers which of the newsletter's several portfolios they should go into, we were told.
In addition, portfolios are seldom published in the newsletter and, when they are, positions will sometimes appear that have not been recommended to readers, thereby making a nonsense of Davidson's claims SI readers could have "outperformed every major market in the world by following our advice this year".
We can also reveal this month that Agora Inc., the Baltimore publishing group of which Davidson is vice-president, founder and minority shareholder, is now the owner of UK-based Scope International, which publishes several dubious books for $100 or £60 a time that are written by so-called members of the right-wing, libertarian Perpetual Traveller movement.
In one of Scope's books, called 'The Tax Haven Report', author Adam Starchild claims that Bermuda has a Governor General, instead of a Governor; that this Governor General chairs the Cabinet, when the reality is that he is not entitled to sit in on Cabinet meetings; and that international companies on the island are exempt from payroll tax, when the reality is that they pay it.
Scope's best-known author is 'WG Hill', a pseudonym used by a person or persons whose books are promoted by several companies over the Internet which offer seemingly dubious products and services such as second passports, fake degrees and access to 'get rich quick' schemes.
One of Hill's books called 'Sex Havens: Or Whore & Piece' is a guide to world prostitution that, inter alia, shows where to find 'Thai Virgins' who, presumably, are underage girls.
Another is called 'The Lloyd's Report: How to earn a substantial second income underwriting insurance', in which he declares that, by becoming a Lloyd's Name: "You could expect an income of up to £200,000 per year for the rest of your life."
Another book, called 'The Albania Report', describes Albania as "a fairy tale land" and promises to show readers "how to double your capital at no risk ".
The quality of WG Hill's work is perhaps best summed up by an introduction to his book, 'Think like a tycoon: How to make a million or more in three years or less!', which is published by Scope.
"My name is WG Hill. I did not make my millions (like some authors) by writing books about things I have not done myself personally. Starting from scratch, without money, special skills, contacts or luck, I founded eight totally unrelated part-time FUN businesses. I saw each of them earn me over a million pounds each in three years or less.
"While I was making all this money, I managed to go to an average of five parties a week, plus two or three concerts, plays or movies. SEX! My love life didn't suffer either - as I had more 'companionship' in a year than most men have in a lifetime. What was the sex-appeal secret of a grumpy, overweight, middle-aged, bald guy with crooked teeth and thick glasses? I was doing all the things that appeared exciting and glamorous to women. I was the action and they came to me."
Agora also owns UK-based Fleet Street Publications Limited, one of whose directors is Lord William Rees-Mogg, the former editor of The Times newspaper.
Both Rees-Mogg and James Dale Davidson are shareholders in Bermuda-based LOM (Holdings) Limited, which owns Lines Overseas Management Limited, LOM Nominees Limited, LOM Asset Management Limited (formerly Strategic Lines Asset Management Limited), LOM Properties Limited and Strategic Advisors Overseas Limited.
We reported last month that Davidson's name did not appear on the share register of LOM (Holdings) but we can disclose that he does appear to be a shareholder. He was listed as the owner of 300,000 shares, which represents a 4.7 per cent stake, until October 16, 1998 when these shares were transferred to LOM Nominees Limited.
We do not know whether Davidson continues to be the beneficial owner. The reason we did not acknowledge Davidson as a shareholder last month was because of a typo in the share register of LOM (Holdings) Limited, which listed an incorrect middle initial for Davidson that led us to believe the shares might belong to a relative, rather than him.
Other prominent Bermudians who have an interest in the LOM group are former Premier Sir John Swan, retired accountant Charles Kempe, Arthur Morris, Warren Brown, Cyril Rance, Susan Wilson and Graham Collis, who is a partner of law firm Conyers, Dill & Pearman.
Rees-Mogg and Davidson have co-authored three books together and also are joint editors of Agora's Strategic Investment newsletter.
They promote LOM in their book 'The Sovereign Individual' without disclosing that they are shareholders in the LOM group. They also promote other entities without fully declaring their interest.
"For investment of sums in excess of $100,000 contact Lines Overseas Management" they write in the Sovereign Individual, which includes the telephone number, street address and web address for LOM, as well as a Bermuda telephone number and web address for Davidson's Bermuda investment firm Strategic Advisors Overseas, both of which are now defunct.
"From its inception as the oldest independent trust company in Bermuda, St. George's Trust Company has provided the highest quality of personal service to an exclusive clientele," state the authors without disclosing that they are both directors of the trust company.
In the same section, there is the heading 'A Global Fraternity of Knowledgeable Investors' in which Rees-Mogg and Davidson promote The Oxford Club, which is run by Agora and whose investment advice has lost readers of The Oxford Club's newsletter 10 per cent per annum over the last three years, according to independent analyst Mark Hulbert.
"The Oxford Club, with a global membership of over 60,000, brings together private investors who share one common goal: to enjoy financial independence and create a legacy of secure, private wealth," wrote Rees-Mogg and Davidson, again without declaring their interest.
"The club helps members achieve their financial goals through investment programs, financial and estate planning strategies, referral services, member exchanges, in-depth reports, seminars, and meetings."
There is no disclosure that Davidson is vice-president and founder of Agora. |
