The S&A Digest: Dinner With Blondie

Dinner with Blondie... Buffett looks at China... Rogers leaps in... David Dreman's favorite S&A Oil Report pick...

 We're back from New Orleans and taking the rest of the week to let the food and wine settle. I'll be penning The Digest tomorrow and Friday... Porter's heading up to Pennsylvania to spend some quality time with his family. As promised, he's sharing the details on his dinner with Doug Casey and Ann Coulter. Don't miss it below.

 Let's check in with the best in the business...

 After exiting his PetroChina (PTR) position, Warren Buffett gave his reasons at a conference in China: "We never buy stocks when we see prices soaring. We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising." Buffett isn't pulling out of China entirely. He's reportedly looking to invest in a large Asian company with a business he understands.

 While China may be expensive, Jim Rogers, co-founder of the Quantum Fund, remains bullish. Rogers is shifting all of his assets out of the U.S. dollar and into the Chinese yuan. Rogers believes the Federal Reserve is destroying the dollar's value and that the dollar will no longer be the world's reserve currency. He expects the yuan to quadruple in the next decade. Maintaining his position as the commodities bull, Rogers is still holding gold, silver, palladium, and platinum.

 Value-investing legend David Dreman gave a few stock picks during an interview with Bloomberg. The manager of $22 billion Dreman Value Management thinks more subprime problems are coming over the horizon, but still sees value in companies like Freddie Mac and Fannie Mae. Dreman is also bullish on Washington Mutual, the sixth-largest bank in the country and a major mortgage underwriter. WaMu is less levered than most lenders and has the financing to survive this downturn. It also pays a 7.7% dividend right now. Finally, Dreman is bullish on oil... in particular S&A Oil Report pick ConocoPhillips (COP). Dreman, like many others, recognizes Conoco as a world-class company trading for just 12 times earnings.

 New high: Google (GOOG).

 The big guy himself returns next week. Until then, give him something to read up in the mountains... feedback@stansberryresearch.com.

 "I'm a subscriber to True Wealth and am confused between what Chris Weber says: 'One First World exchange I'm not in a hurry to buy is Ireland. The property boom is in the process of ending, which is putting a damper on the entire exchange. If euro interest rates rise, then Ireland will be hit hard. You could say that Ireland was artificially helped by the low euro a few years ago and would now be hurt by any rise. If Ireland still had its own currency, it would be able to slash interest rates. But being part of the euro, it cannot do this. We may be seeing somewhat of the same thing with Spain,' and the fact that Steve Sjuggerud keeps pushing Icelandic bonds. What is the truth?"

– Paid-up subscriber Jerry

Porter comment: I'm not sure I understand your question. What relationship do you suppose Ireland has with Iceland?

 "Steve, as an old truism says, every family has a black sheep. The family of your subscribers is not an exception. It obviously has one or more. The very next day after you recommended selling a half of the SA position, somebody dumped over 30k of shares in one shot, then another 17k a few minutes later. As result, the stock plunged more than 10% and could not recover until the end of the session. How could a person in his/her right mind do this with 10% of the average daily volume? Probably you have to teach your subscribers not only how to invest, but also how to trade." – Paid-up subscriber Alex K

Good investing,

Sean Goldsmith

Baltimore, Maryland

October 24, 2007

Dinner With Blondie

By Porter Stansberry

It gives me no pleasure to tell you about my dinner with Ann Coulter...

I was thrilled when a mutual friend invited me to join him, Doug Casey, and Ann for dinner in New Orleans. I thought, regardless of her rabid political views, surely Ann Coulter is an intelligent, curious, well-read person who has insight into the world...

Wrong. Dead wrong.

Ann Coulter is stunningly ignorant of the issues outside of constitutional law (she is a lawyer) and politics. Thus, in her view, politics is both the cause of all of our problems and the only possible solution.

Over dinner she reiterated her obnoxious opinion that the "experiment" with woman's suffrage is the root cause of big government. Like a child playing with an Etch-a-Sketch, she points to a straight line, leading back through history. There, she says... big government started right there, in 1920. That's when the 19th amendment was ratified, ergo that's the cause of the whole problem. After that, according to Ann, it was all downhill.

Doug and I looked at each other curiously... But Ann, that same line, if you move it just a bit further, actually seems to start in 1913, when the Federal Reserve was created, the prohibition of income taxes was repealed and the Republic was put to rest through the direct election of senators. Don't you think these changes to the Constitution and the policies they enabled – like FDR's gold seizure and our resulting experiment with paper money – were far more significant than woman's suffrage?

Ann Coulter had never heard of the gold standard. She didn't believe us when we told her that in 1933 FDR seized all of the privately held bullion in the country, then devalued the dollar – probably the greatest financial crime in history. She didn't even know it was illegal for citizens to own bullion up until 1974. Bretton Woods? Coulter thought we were talking about tennis rackets. She told me flatly "I don't know anything about finance or economics." Not even the basics, like how inflation affects prices or the key role paper money and progressive income taxes have played in building the welfare state. We might as well have been talking to a horse. Ann just looked at us, her long face turned sideways with incredulity.

Lacking anything intelligent to say, she decided to simply insult us. "I was a libertarian as a teenager, but I emerged from adolescence..."

Good one, Ann. What a zinger.

Regards,

Porter Stansberry

Stansberry & Associates Top 10 Open Recommendations

Stansberry & Associates Hall of Fame

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

As of 06/25/2013