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As of 07/01/2013

S&A Dividend Grabber is official... Did Porter find the best real-estate in the world?... And the best hotel in the world?... Thanks for your help...

Today, we're launching our latest research service – S&A Dividend Grabber. But, before I get to that, I first want to describe for you one of the best real estate opportunities in the world...

It was 53 degrees yesterday morning in Cancun, Mexico (so much for global warming...). As we flew in, the tourists and the spring-breakers onboard oohed over the crystalline turquoise water and the brilliant white beaches below. But I was eyeing the massive, steel power girders. The power infrastructure spreads out over what must be hundreds of miles. It originates somewhere to the west – beyond my view even from 10,000 feet. Gently slung atop giant steel erector-sets spaced evenly about a half-mile apart, the lines nearly touch the eastern coast of the Yucatan, before turning sharply south and disappearing. As we drove away from the Cancun airport on highway 307, the power lines paralleled our southern course – standing silently above the jungle, bringing civilization to the Yucatan.

When I look at real estate deals in emerging markets, the first thing I judge is the power infrastructure. Nothing is more critical to the standard of living than electricity. Without power, there can be no construction, no safe food to eat, no safe water to drink, and no way to tame the outrageously hot midday sun. And so I look at the poles, the lines, and the outlets. How many wires? What voltage? How reliable? Does power in the hotel go out automatically when you leave the room? Is the air filled with the smell of diesel (from local generators)? In Nicaragua, where I've watched my friends and partners develop huge swatches of beachfront land, the biggest hurdle to higher land prices is the inconsistent power grid. It's no fun to sit by the pool breathing diesel fumes.

Judging solely from the power poles I saw from the air, I was expecting Cancun and the beaches to its south to be highly developed. There is a lot of development, but there is even more land. Also, as it's difficult (but not impossible) for foreigners to buy land on the coast, gringo speculators have only recently arrived on the scene. As a result, you still can find many bargains here. We haven't looked at lots yet, but a quick Internet scan found this – a nice $150,000 direct beachfront property.

Mexico's Caribbean coast has a lot going for it – a string of nice little towns, the most beautiful deserted beaches in the world, a great climate, wonderful golf courses and, best of all, a highly educated, highly motivated local employee base.

I've been to many of the nicest resort areas in the Caribbean – The Palms in Turks and Caicos; The Ritz in the Cayman Islands; The Ritz in Montego Bay, Jamaica; and a half-dozen other lesser-known places. The problem in all of these places is twofold. First, there's rarely enough infrastructure, leading most often to water shortages. And, second, the staff consists of either surly locals (in Jamaica, I always had the feeling the staff would rather stick a shiv in me than bring me a beer) or helpless imported workers (like the Filipinos in the Turks). I'm staying at the Fairmont, near Playa del Carmen, which opened less than a year ago. I've never seen better service or eaten better food at any hotel in the world, including the Four Seasons George V in Paris. The golf course is flawless. It looks like someone painted it. And you can play the course for $60. Everything here seems to cost about half what it would in the United States.

Seeing the quality of development here along this coast makes me even more bearish on Miami real estate. Most of you know, I've been looking to buy an apartment in Miami. I was waiting for prices to fall, as there's been a tremendous amount of overdevelopment. But why would you want to own a place in Miami when Cancun is less than two hours away? Miami is expensive and horribly overcrowded. I spent four days in Miami last week, and I've never seen worse traffic in my life. The roads are falling apart. Our hotel (Grove Isle in Coconut Grove) cost $500 per night and was nothing more than an aging Holiday Inn with a fancy TV (which we didn't use). We almost missed our flight out of Miami because the airport is a mess – it took an hour to get through security.

On the other hand, the airport in Cancun is privately owned and one of the nicest in the world. There was a ton of security, but it was polite and helpful. More people spoke English here than they did in Miami. The highway south is new, four lanes, and totally deserted. You can rent nicer, newer cars (including BMWs) for less from the Hertz in Cancun than you can in Miami. And everything was faster, easier to do, and cheaper.

My plan is to find the best small town along the coast, figure out where I'd want to live, and then wait for the next crisis to hit Mexico. Prices for land, condos and homes, here are undoubtedly volatile. The key to success in emerging economies is to buy when things look like they can't get any worse (Like right now in Thailand...).

There were no new highs throughout our recommended portfolios on Friday.

And now onto our new product... Thank you for your feedback and help in refining our dividend-grabbing strategy. In order to put everyone on the same page, I want to highlight some of the grabs that we have recommended in these pages.

So, keep an eye on your inbox... You will be receiving more information on S&A Dividend Grabber tonight.

Good investing,

Porter Stansberry

Playa del Carmen, Mexico

March 19, 2007

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