Strong website, investors' "Inner Circle," and (not least) a skyrocketing portfolio propel Patrick McKeough to newsletter success.

Pat McKeough's feet were pointed at financial advisory publishing from an early age. When he was a 16-year-old high school student, he responded to an ad for a part-time job for a student interested in finance.

"I sent a postcard. It was cheaper than a letter, envelope and stamp, and I wrote that I was smart and interested in finance. Evidently the guy's wife said, 'Hire this kid. He's different.' I was just trying to save money," McKeough told NL/NL.

"The guy published investment newsletters and I worked there through high school and university until, with my degree, I struck off from Buffalo to the nearest financial capital, Toronto, to find fortune as a stockbroker.

"I worked as a broker for about a year until the brokerage firm went broke. It developed that no one else was hiring stockbrokers at the time so I responded to an ad for a financial writer. It turned out to be Marpep Publishing," McKeough said.

Toronto-based Marpep is now MPL Communications, headed by founders Barrie Martland and Steve Pepper.

"I worked for Barrie and Steve for the next 20 years," McKeough continued, "beginning on The Investment Reporter and eventually as director of research overseeing all the editorial product."

Marpep won several newsletter association financial journalism awards during those years.

Went out on his own 10 years ago

"Then, in 1994, let's just say I wanted to go in a different direction and I left to launch my own first newsletter, The Successful Investor. I also resumed my career as a stockbroker figuring that between the two activities I should certainly be able to make a living. As it turned out, the newsletter began doing well enough that in a year or so I packed it in again as a stock-broker," McKeough said.

"What I did then was apply for a license as a portfolio manager, to manage clients' funds. This process took from sometime in mid-1996 until January 1999. It's tough to qualify for that here in Canada and until the final result, I had no idea the license would be granted," he said.

What complicated the case is that in Canada financial publishers are still subject to registration requirements and, evidently, it was unusual that they wanted to be licensed both as a publisher and as a fund manager.

"So during the wait," Pat continued, "I launched a second newsletter, Stockpicker's Digest, and then two more, Canadian Wealth Advisor, which is aimed at mutual funds and tax management, and the Wall Street Forecaster, that is basically a clone of The Successful Investor aimed at the U.S. market."

Premium service

The most successful thing McKeough is doing now is offering subscribers (only) to any of the four newsletters access to the Inner Circle Service. Members of the Inner Circle can ask any question they want, which will be answered, and all members of the "circle" receive the answers.

Innocently, I asked, "And you charge additionally for this?"

"For sure," McKeough replied. "We don't promote it beyond the subscribers because if it got too large, we couldn't handle the workload.

The staff of The Successful Investor is now 12, including McKeough and his wife who serves a business manager and circulation director.

In 2002, they launched four "pool funds," which are similar to hedge funds in the U.S. in that with a $150,000 minimum entry requirement, it is assumed the participants will be more sophisticated and therefore the funds are subject to less stringent regulation.

"I'm beginning to look at the newsletters as another way to sell the research we do for fund management," McKeough said.

Marketing

He markets with direct mail and on the website, www.TheSuccessfulInvestor.com. They send #10 packages and a "Reportlog." "I think of the results as being 'good,' although in truth we lose money on the direct mail, but with renewals, cross-sales of our other products, and the opportunity to introduce new subs to the Inner Circle and portfolio management, the overall results have been profitable.

"We're about to become more focused on marketing with a new marketing director. We're beginning a second round of interviews. It's hard to find talented people here. Toronto is the financial capital of Canada, but it doesn't support a highly developed newsletter business," McKeough said.

Selling south of the border

We asked about the Successful Investor's U.S. operations. "We're very low-key," McKeough explained, "operating out of the basement of a friend's in Buffalo. Sort of a 'Poor Man's Guide to Publishing in a Foreign Country,'" he said.

"The Wall Street title is profitable on its Canadian operations alone, the U.S. subs are 'extra.' We probably won't market more heavily there because we don't have additional products to cross-sell in the States."

We asked if the present low state of U.S.-Canadian relations affected his operations. "Our subscribers are looking for stocks and opportunities they can't find in Canada. They couldn't care less about the state of Canadian-U.S. relations," McKeough said. 218 Sheppard Ave. East, #100, Toronto, ON M2N 3A9, 416-756-0888, fax [phone], www.thesuccessfulinvestor.com