The S&A Digest

Stansberry & Associates Top 10 Open Recommendations
(Top 10 highest-returning open positions across all S&A portfolios)

As of 07/02/2013

The real reason for Ford's financial troubles… Microsoft is No. 1… Check your cold medicine… A blanket "You're welcome"… Goldsmith again…

Editor's note: Porter is out of the office today, working on the upcoming issue of his Investment Advisory. Goldsmith is filling in again.

 In an annual poll by Harris Interactive and The Wall Street Journal, Extreme Value and PSIA pick Microsoft (MSFT) was voted the U.S. corporation with the best reputation. Microsoft took the position from Johnson & Johnson (JNJ), which sat at the top for 17 years. Respondents to the poll gave Microsoft high marks in leadership, financial results, and Bill Gates' personal philanthropic activities. Of the 60 companies mentioned, Halliburton (HAL) was at the bottom of the list, receiving low marks in ethical behavior.

 PSIA pick Anheuser-Busch (BUD) is expanding its presence in China, the world's largest beer market by volume, in hopes of better competing with rival SAB Miller (SBMRY.PK). BUD will enter into as many as 12 new markets, in addition to its 30 existing markets, with its Harbin 1900 and Harbin Ice brands. The company is hoping to establish Harbin as a national brand in a country that only accounts for 1% of earnings. Since Porter's recommendation, Anheuser-Busch has returned 25%.

 The U.S. Treasury is considering cutting its three-year note as the dwindling budget deficit reduces borrowing needs. The Treasury already has cut its borrowing needs $35 billion this quarter, to $141 billion. The final decision will be released in May.

 With cold season in full swing, you may find that your go-to cold medicine is not quite working the way it used to. That's because medicines with the decongestant pseudoephedrine are no longer allowed on drugstore shelves. In large quantities, pseudoephedrine can be used to make methamphetamine, so naturally the FDA ordered retailers to keep those cold medicines under lock and key… behind a counter… available only with ID. Some drugmakers, to keep their products on shelves, have swapped out pseudoephedrine for a different ingredient, phenylephrine, which isn't as effective in combating cold symptoms.

 We wrote it, did you buy it?

"Southern Copper is the world's largest publicly traded copper company by reserves… The combined production in 2005 was 357,613 tons of copper… Southern Copper also operates two world-class processing facilities… Even though its average mine life is very high, Southern Copper explores for more. The company has 42 active exploration sites in Mexico… In all, Southern Copper is a tremendous mining company whose royalty income will provide you with a continuous revenue stream for years to come." – Matt Badiali in the June 2006 S&A Retirement Protection Plan

Since its recommendation, Southern Copper (PCU) has returned more than 50% to our readers.

 New highs: Southern Copper (PCU) and Progenics (PGNX).

 An outpouring of thanks accompanies today's usual snide commentary… We love the good and the bad, so keep it coming. Send your e-mails here: feedback@stansberryresearch.com.

 "Sorry I did not thank you for the gifts when I joined Alliance, but I did not receive any at that time. However, the Alliance has turned out to be a gift that just keeps on giving and I appreciate it. So, thank you for that. When I crack open my e-mail, if I see an S&A Digest, I read it first. Lurking and living vicariously via the Digest!" – Alliance member John Anderson

 "You're absolutely right. I received two books as well when I became an Alliance member and never thought twice about it. Thank you, those books were great and became the beginning of my investment library. Please don't mind my ravings about value investors. I truly appreciate all that you and your team do. I consider my Alliance membership to be an 'extreme value' purchase; for a reasonable up-front initiation and a small yearly maintenance fee, you give me analysis that I couldn't do for myself." – Alliance member Ken Long

 "Thanks for the two books. While flipping through Market Wizards by Jack Schwager my eye was caught by one of the names – Ed Seykota. Sure enough it was the same Ed Seykota that lived next door when I was at MIT in the late '60s! I realize the book is over 15 years old, but it is the first time I've come across his name in nearly 40 years. What a pleasant surprise. Thanks again. By the way, I would recommend to other readers Seykota's comments on winning and losing in the markets. Check them out." – Alliance member Jarl McDonald

 "Dear Porter – You and most writers seem to worship Warren Buffett. You all wish to mimic him. Why don't you recommend to buy Buffett [Berkshire]?"

– Paid-up subscriber Peter Graham

Porter Comment: Who says we haven't?

 "Like any stock you buy, on any exchange, if you buy it before it goes ex-dividend, you get the dividend. Nobody that pays 20 dollars won't get the dividend. You don't have to be safe or any such nonsense. However, if you want it to be qualified [as a] dividend, you need to follow the tax code. And odds are you won't know if it is QDI or return-of-capital until far after you own it because it won't be categorized until after the company reports '07 earnings. Why would you want the dividend anyway? Wait until after it is paid rather than realize a gain for no reason." – Paid-up subscriber Phil Appel

 "Haven't been privy to a lot of your e-mails but I live in Louisville, KY and worked at a gas station which was located about 1 mile from the Ford plant just off I-265. I worked third shift.

Allow me to fill you in on what I saw:

You couldn't GIVE me a Ford, let alone get me to pay good money for one." – Paid-up subscriber HPT

Goldsmith Comment: HPT, do you by chance know if Ford is still hiring?

 "Tell Dr. John Deberry the mouth is about as unsanitary as the other end of the gastrointestinal tract. He must be in the pocket of the dentist lobby."

– Paid-up subscriber John Williams, M.D.

Regards,

Sean Goldsmith

Baltimore, Maryland

January 31, 2007

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