Avoiding Shale Scams

You know a bull market is really running when the scams start showing up…

When gold’s at record prices, every street corner has a gold-buying store with a temporary sign ready to give you a lowball offer on your grandmother’s ring.

When housing was booming, your C-student cousin Mel was about to make it big as a flipper.

Today, with oil and gas boomtowns being born from Billings to Baton Rouge, everyone is trying to cash in on the craze.

Craigslist

A coworker here in our Baltimore office was doing some Web research the other day, and came across links to oil and gas articles from Energy & Capital in a few Craigslist ads.

Here are the titles of the Craigslist ads:

• OIL FIELD 130 ACRE LOOKING FOR INVESTOR

• $2,500 PER MONTH ON SMALL INVESTMENT

• YOU CAN COUNTER THE HIGH PRICE OF GAS

• SICK OF HIGH GAS PRICES? INVEST IN OIL

• INVEST IN THE OIL FIELD CHECK THESE ARTICLES

• INVEST IN OIL AND REAL ESTATE – $40,000

The ads came from the San Antonio portion of the site, which is located in the heart of the Eagle Ford Shale.

Here is one of the ads in its entirety:

If you haven’t deduced it yourself, these guys say they have 130 acres (or the Craigslist colloquial “arces”) that has (or the non-noun/verb-agreeing “have”) two houses on it…

All they need is $40,000 from you to build some additional housing for the droves of oil workers!

Then they’ll pay you $2,500 a month for two years, provided the people you give that money to don’t mysteriously migrate to a Mexican beach.

So what are you waiting for? Send these Craigslist Cowboys your money!

Bass Ackward

Of course you’re not going to send them your money…

Hopefully no one does.

Not only is the spelling and grammar in this ad atrocious, but I’m not into establishing joint ventures with people I’ve never met who post on Craigslist in ALL CAPS.

I can only assume these guys see all the money flying around them in San Antonio, and this was a lazy attempt to get some of it.

At best, they’re Texans with dreams as big as their state — but no way to fund them.

At worst, they’re con artists.

Either way, they’re late to the game and are trying to jump on the bandwagon. 

Many other people are seeing the same thing, and want to know how they can capitalize on it for themselves… but they aren’t starting energy Ponzi schemes.

Instead, they’re doing what Kody J. did the other day: emailing experts to find viable ways to invest in this North American energy boom.

Energy Expertise

Even the Craigslist crooners above looked to editors of this letter for factual evidence of a shale boom. We’ve been covering it in detail longer than anyone else.

Here’s the note I received from Kody this week:

I’m amateur at investing, knowing very little at all. But I work in the oil fields of North Dakota and see and smell the money.

How does one take your knowledgeable info and capitalize on it?

I’ve never bought a stock in my life, but with the info your providing, I should start. Can you suggest how one gets started, and with your reports, how a person should be able to determine what to keep an eye out for?

Kody J.

Kody gets it.

He sees — even “smells” — the oil money around him in North Dakota.

And even though he’s a novice investor, he knows there’s money to be made in the market from the ongoing North American oil and gas drilling bonanza.

Perhaps, like you, he just needs a bit more information first.

So how does one take our knowledgeable info and capitalize on it?

Simple.

You’re reading the free e-Letter Energy & Capital, where Keith, Jeff, and I offer our perspective on anything that falls under those two categories. It is produced by Angel Publishing.

We each also run a premium stock advisory service. There’s Keith’s Energy Investor, Jeff’s Green Chip Stocks, and my Early Advantage.

In those advisories, we translate our market insights and interests into winning investments for our members, complete with buy/sell alerts, research reports, updates, and live Customer Service. We each carve out different niches of the market and cater to various investment styles and risk appetites.

You can learn more about each of our and other Angel publications in the About Section here.

For oil investments — and shale investments, in particular — you’ll want to learn more from Keith…

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Call it like you see it,

Nick Hodge

@nickchodge on Twitter

Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street’s Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor’s page.

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