The S&A Digest: Goldsmith on The Digest

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

As of 06/24/2013

Goldsmith on The Digest... The king of obnoxious... Chocolate in China... How to get rich... MBIA in trouble... 6,000% isn't extraordinary?

Editor's Note: Porter is taking the day off to complete the annual review, though he did find time for one "Porter comment." He'll be back on Friday... with a report card.

 We wrote it, did you buy it?

I've got no doubt, sooner or later, Chinese kids will discover the wonderful allure of a Hershey bar. – December 2007, PSIA

Swiss chocolate maker Barry Callebaut opened a $20 million factory in the Chinese city of Suzhou today. The company produces 25% of the world's raw chocolate and supplies manufacturers Nestle, Cadbury Schweppes, and PSIA pick Hershey (HSY). The factory will produce 10,000 tons of chocolate its first year and eventually grow to 75,000 tons.

 One of our favorite things about Hershey is its long history of rewarding shareholders. The company has paid a dividend for 309 consecutive quarters – more than 77 years – and has raised its dividend every year since 1974. Hershey also buys back tons of stock. Here's another company that rewards shareholders...

 S&A Oil Report pick ConocoPhillips (COP) bought back $7 billion (5.3%) in stock during 2007 and paid $2.6 billion (1.9%) in dividends. We've said it before... The two ways to get rich investing are compounding your savings over a long period of time and buying early into a bull market. You will get rich holding companies like Hershey and ConocoPhillips for the rest of your life.

 We've wondered in these pages: If a company's business is dependent on a AAA rating and one downgrade will destroy it, does the company really deserve that rating?

No business is more dependent on its credit rating than MBIA (MBI), the world's largest bond insurer. Its vulnerability to the credit markets sent shares spiraling down 75% last year, and the bad news keeps coming. Today, MBIA had to sell $1 billion worth of notes to raise capital and preserve its AAA rating. The company also cut its dividend 62% from $0.34 to $0.13. Shares fell close to 4% on the news... It's shaping up to be a good new year for Bill Ackman.

 Sure, MBIA was a stinker last year, but what was the worst-performing S&P 500 stock of 2007? E*TRADE Financial (ETFC) takes the title, losing 84%.

 New highs: UltraShort Real Estate (SRS), streetTRACKS Gold (GLD).

 After witnessing the wrath of the mailbag today, I'm keeping my comments short and sweet. Be mean, preferably to Dan or Porter, at feedback@stansberryresearch.com.

 "I enjoy what he has to say but I always get a kick out of how newsletter writers generally try to make things they write about sound so fantastic. Case in point is Ferris' comment on the 6,118% return on Weber's Max Yield strategy, taking $10K to $621K in 37 years. Wow, an 'astounding' 6,118% return. By my calculation, that's an annualized return of a little over 12%. Good, yes. Better than my results, yes.  'Astounding,' probably not." – Paid-up subscriber Don Olson

Porter comment: Considering those profits were earned in cash bank deposits, where the principal wasn't at risk? That's not extraordinary?

 "I read everything [Dan Ferris] wrote in S&A for over a year now. I sense your style of writing already. Why are you purposely trying so hard to sound rude and obnoxious in The Digest? It reads forced and not natural; you come off sounding like a jerk. Obviously, you are trying to copy Porter's style which worked so well for him in the Digest all this time. There is no doubt about it, when it comes to being obnoxious; Porter is the king. He manages insulting people and sounding like he knows it all with such a natural flair that it is a pleasure to read. He has an uncanny knack of being able to speak his mind in the most insulting way and yet come off loveable. You don't. Don't try anymore please. It's painful to read. If it was so easy to write like Porter, everyone would do it (and heaven help us then). In the meantime, stick with your usual mannerism; unapologetic and conceited, it's not perfect but at least it's the real you." – Paid-up subscriber DS

 "I did not subscribe to your rta and penny stock fortune and a few others to

 give you a new patsy to pester with more piffle and long winded

 solicitations. It seems that every news letter is not to inform but to

 solicit another money grabbing service!" – Paid-up subscriber Chas LeClair

Goldsmith comment: You're right. You didn't subscribe to "our" RTA and Penny Stock Fortune because we don't publish either of them.

 "You are right on as when you say eating fresh fruits, vegetables and supplementing with vit. C. I also feel that if you do things that may harm you (alcolol, smoking etc.) at least do them in moderation. I have an occasional cigar but do not inhale. I would also recommend to excercise appropriately according to your age and physical condition. You should not be jogging with bad knees. Many boomers are taking multiple prescriptions as they age. They should check with their MD and pharmacist to see if these meds are depleting essential neutrients. Prime example is that millions of people are on statins for cholesterol yet these products deplete CoEnzyme Q10 produced by the liver. This is essential to proper muscle contraction especially in the heart muscle. Everyone on a statin should supplement this nutrient. The list is long and most general practioners are not aware. Do not forget to excercise your brain! Stay active or you gradually will decline. Love yourself and life." – Paid-up subscriber Peter Hill

Regards,

Sean Goldsmith

Baltimore, Maryland

January 9, 2008

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