Back to the dot-com-era highs...

Surrounded by zombies...

 The Nasdaq broke 4,000 yesterday.

The index – which includes blue-chip companies like Apple, Facebook, and Amazon – is trading at its highest level in 13 years. It's yet another sign of the froth we're currently seeing in the market.

If that isn't enough of a sign of a market top, consider this news from last week...

 Social-networking service Snapchat turned down a nearly $3 billion offer from social-networking behemoth Facebook. Snapchat allows its users to text message each other photos that disappear after 10 seconds. It's a popular smartphone application – the company says its users send 400 million messages per day. But it has no revenue.

 The financial media says Snapchat was smart to turn down Facebook's offer. It's a fast-growing company. And at 400 million uploads a day, Snapchat users are uploading more photos than Facebook users are.

Snapchat's 23-year-old founder, Evan Spiegel, said he likely won't consider an acquisition until early next year... He's hoping the company grows its user base to justify an even larger valuation by then – though the company will still likely have zero revenue. Snapchat's users are predominantly between the ages of 13 and 25. (Facebook is admittedly losing popularity among youths, one of the reasons for the offers.)

 The market forces you to look like a fool either before or after the top. We're betting Snapchat will be in the latter group. Last year, based on venture-capital funding, Snapchat was valued at around $100 million. Today, it's worth $3 billion... and it still wants more. It's crazy.

 In yesterday's DailyWealth Trader, co-editors Amber Lee Mason and Brian Hunt noted one sector showing particular strength today...

 Meanwhile, the uptrend has officially broken for one of our favorite whipping boys, electric-car manufacturer Tesla.

In the November 7 Digest, we outlined Tesla's many problems. In short, its cars catch on fire... it's losing money... and it's facing heat from car dealerships across the country.

At the time, the company had also reported disappointing quarterly earnings. Tesla shares fell from $151 to $140. And the downtrend continues... Tesla shares are trading for around $120 today.

 We're "beta" testing our newest newsletter, Stansberry International. As the name implies, Stansberry International looks for the cheapest stock markets in the world... and recommends the best opportunities in those markets. Co-editor Brett Aitken recently sent us a note from his home in Spain...

 Property investors have Spain in their crosshairs right now. And it's creating the most activity in the property sector we've seen in four or five years.

Over the past few months, U.S. firms have been buying up bank-owned properties, apartment buildings, and other properties around Spain.

Among them are the biggest names in the business, including private-equity giant (and True Wealth holding) Blackstone Group. In July, Blackstone bought $170 million worth of apartment blocks. That's chicken feed for a firm like Blackstone. But it's just getting started...

Reports say Blackstone is bidding against Goldman Sachs for another 1,458 housing units and another 1,500 garages, which Madrid's local government has put up for sale. Hedge fund Elliot Management has spent nearly $1.8 billion on various Spanish investments, according to Spanish financial newspaper Expansion.

Last Friday, Expansion reported that Spanish banking giant Banco Santander is about to close a deal with another private-equity firm, Apollo, to take over its real estate division for nearly $950 million. The deal includes bad debts but not its properties, which will stay on Santander's balance sheet. Apollo will manage the bank's property portfolio, which has a gross value of around $10.8 billion... worth about $5 billion after provisions. The deal brings Apollo's Spanish investments to about $2 billion.

Several other well-known funds have already invested in Spain (or plan to).

 Spain is also flooded in problematic property.

In June, Spanish real-estate firm RR de Acuña reported that Spain had about 1.7 million new and previously owned properties for sale. About 350,000 were bank-owned. The remaining 1.4 million were privately owned or in developers' hands (some of which are bank-owned).

Another 400,000 properties were under construction, and the courts owned 150,000 more. In total, the actual and potential number is more like 2.2 million properties. And there are an additional 4 million potential unit sites for sale that are ready to build on.

 I (Brett) spoke with Spanish real-estate expert Ian Cassidy. He said there has been a recent flurry of portfolio sales. And according to Ian, most of the headline deals so far have been around the $135 million mark. But larger deals are expected. Deutsche Bank just closed on a reported $473 million commercial property acquisition from Spain's SAREB, a government-formed bank designed to absorb bad debts.

 In addition to Banco Santander, other Spanish banks are offloading their real-estate divisions. Ian said the deals to date account for a very small percentage of the problem, with around $153 billion in bad debt still sitting on the books across five banks... and another $67 billion at SAREB.

 From talking with some in the banking sector here, the bleeding hasn't entirely stopped in the property market. The year-to-year percentage in the number of transactions was down almost across the board last quarter. Some say prices could fall another 10% or so. But with all the foreign cash pouring in, the decline might be slowing.

In some parts of the country, properties are selling at 40%-50% discounts from their highs. In other parts, the discounts are higher. Along the Mediterranean's Costa del Sol, some properties are selling at 80% discounts from their 2008 highs. British newspaper Telegraph reported a luxury property near Gibraltar going for $230,000 – down from $1.3 million in 2008.

If the bottom isn't in yet, we're getting close. And we'll continue to monitor the situation in future issues of Stansberry International.

 Alliance members can access Brett's latest Stansberry International "beta" issue on the Stansberry & Associates website.

 New 52-week highs (as of 11/25/13): Automatic Data Processing (ADP), American Financial Group (AFG), Becton-Dickinson (BDX), ProShares Ultra Biotechnology Fund (BIB), Chubb (CB), CVS Caremark (CVS), EnerSys (ENS), Energy Transfer Partners (ETP), iShares Germany Fund (EWG), iShares Nasdaq Biotechnology Fund (IBB), Johnson & Johnson (JNJ), ProShares Ultra KBW Regional Banking Fund (KRU), 3M (MMM), Navigators (NAVG), ONEOK (OKE), Procter & Gamble (PG), ProShares Ultra Health Care Fund (RXL), Sears Holdings (SHLD), Targa Resources (TRGP), Travelers (TRV), and Wal-Mart (WMT).

 A reader comes to our defense in today's mailbag. It's always appreciated. Send your feedback to feedback@stansberryresearch.com.

 [Paid-up subscriber Don Best], with all due respect, you should know better, Stansberry Research is not a fortune cookie, nor a magic 8 ball. They simply provide their research, data and recommendations based on the information at hand and they give their honest assessment, albeit with more effort and due diligence than most publications. They work towards teaching their readers along the way, including how to make and determine their own assessments even with the facts presented. Seems as if you should be accountable to yourself rather than hold others accountable. I'll guess you're not as quick to tell them when they are right and made you a lot of money... Also guessing that you were accountable for that decision." – Paid-up subscriber C.B.

Regards,

Sean Goldsmith
Miami Beach, Florida
November 26, 2013

Editor's note: For the rest of the week, we'll be running some of our favorite essays from Agora founder Bill Bonner. For decades, Bill has given readers witty and terrific economic commentary.

 Saturday, we went to a Halloween party. There... we were surrounded by... ZOMBIES!

About an hour west of Washington, the location was beautiful Rappahannock County, Virginia. Stone walls... trees wearing their autumn dresses of red and gold... brisk weather...

There was a bonfire to chase away evil spirits. Music. Dancing.

And a witch warned that we were entering a "dangerous period, astrologically."

"The last time Pluto lined up with Saturn like this was in 1933. You know what happened after that."

But the festivities didn't chase away the zombies; they drew them near, like hyenas to roadkill. Yes, dear reader, a party so close to the nation's capital is bound to attract zombies.

And they are cunning. They thought they could put one over on us. They thought we'd fall for the old trick...

Yes, it was a big Halloween costume party. One person came disguised as a monk. A woman was dressed as the Mad Hatter. Robin Hood was there, too... and Albert Einstein. But the zombies tried to fool us... with their blood-stained, ripped clothes... carrying axes and meat cleavers... shuffling along. They thought they could pass themselves off as FAKE zombies. Underneath the ripped clothes and phony blood was the real thing... REAL ZOMBIES...

Their clever get-ups didn't fool us. We saw their license plates – Washington, Virginia, Maryland... and we saw that look in their eyes... predatory... craving something-for-nothing... lusting for power... eager to boss others around.

There were also a number of torturers from the Bureau of Labor Statistics... the Fed... and who knows where else...

And plenty of congressional aides, whose job it is to make their bosses sound as if they had a clue about what was going on...

And lobbyists, lawyers, chiselers, spinners, contractors... all hip to how Washington works... all wise about how to make it work for them!

We have lived among them. We have learned their zombie ways... and we can speak their zombie language fluently. Often, they are surprisingly sharp.

"So, you work in the House?"

"Yes, I have been on the Ways and Means staff for about 15 years."

"What do you think will happen in January... when they take another swipe at budget control?"

"Oh, you know... it has nothing to do with budget control. This is pure politics. Posturing. Posing. For many of them, it was just an opportunity to get their names in the paper. I don't think it turned out the way they planned.

"But there are some real believers in the group, too. And I don't think they necessarily lost as badly as the press reported. They'll be back. And we'll have another show.

"The real issue, or the real problem for all these guys, is that they are elected by the average voter. And the average voter hasn't gotten much out of this administration or this Congress. The average voter has gotten poorer. His family has less disposable income. His children have a harder time finding jobs. His cost of living is rising faster than his income. He looks around and he sees Iraq reverting to a bloody mess. He tries to sign up for Obamacare, and the website won't work. He reads the paper, and he discovers that U.S. students rank last among developed nations in math and sciences – despite spending a lot more on education. And he sees, too, that he spends twice as much as other people on health care – and dies earlier.

"And now, the economy has become arthritic, too. The rate of new business start-ups has fallen... people are afraid to switch jobs... and indicators of social mobility show us less dynamic than Europe. That is, if you're born poor in America, you're more likely to stay poor than you are even in Europe... where nothing ever changes.

"He looks at all this... and the voter gets fed up. And I think that's what's really behind this Tea Party vote. They're not really for freedom... or in favor of less government spending. They just think something is wrong with the whole system. They don't know what to do about it... except to try to stop government."

– Bill Bonner

Editor's note: Bill Bonner is an entrepreneur, investor, and bestselling author. And in his latest project he's showing readers a way to create and pass tens of millions of dollars to your children and grandchildren tax-free. To learn more, click here.

Stansberry & Associates Hall of Fame
(Top 10 all-time, highest-returning closed positions across all S&A portfolios)

Surrounded by zombies...

We're taking a temporary break from thinking about stocks in today's Digest Premium.

Instead, we're featuring an excerpt from Agora founder (and Porter's mentor) Bill Bonner, who recently came across some real-life zombies...

To continue reading, scroll down or click here.

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

As of 11/25/2013

Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any S&A publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio.

Surrounded by zombies...

We're taking a temporary break from thinking about stocks in today's Digest Premium.

Instead, we're featuring an excerpt from Agora founder (and Porter's mentor) Bill Bonner, who recently came across some real-life zombies...

To subscribe to Digest Premium and receive a free hardback copy of Jim Rogers' latest book, click here.

Back to the dot-com-era highs... A ridiculous offer spurned... Tesla shares are falling... Tons of money flows into Spain... A reader defends us...

 The Nasdaq broke 4,000 yesterday.

The index – which includes blue-chip companies like Apple, Facebook, and Amazon – is trading at its highest level in 13 years. It's yet another sign of the froth we're currently seeing in the market.

If that isn't enough of a sign of a market top, consider this news from last week...

 Social-networking service Snapchat turned down a nearly $3 billion offer from social-networking behemoth Facebook. Snapchat allows its users to text message each other photos that disappear after 10 seconds. It's a popular smartphone application – the company says its users send 400 million messages per day. But it has no revenue.

 The financial media says Snapchat was smart to turn down Facebook's offer. It's a fast-growing company. And at 400 million uploads a day, Snapchat users are uploading more photos than Facebook users are.

Snapchat's 23-year-old founder, Evan Spiegel, said he likely won't consider an acquisition until early next year... He's hoping the company grows its user base to justify an even larger valuation by then – though the company will still likely have zero revenue. Snapchat's users are predominantly between the ages of 13 and 25. (Facebook is admittedly losing popularity among youths, one of the reasons for the offers.)

 The market forces you to look like a fool either before or after the top. We're betting Snapchat will be in the latter group. Last year, based on venture-capital funding, Snapchat was valued at around $100 million. Today, it's worth $3 billion... and it still wants more. It's crazy.

 In yesterday's DailyWealth Trader, co-editors Amber Lee Mason and Brian Hunt noted one sector showing particular strength today...

 Meanwhile, the uptrend has officially broken for one of our favorite whipping boys, electric-car manufacturer Tesla.

In the November 7 Digest, we outlined Tesla's many problems. In short, its cars catch on fire... it's losing money... and it's facing heat from car dealerships across the country.

At the time, the company had also reported disappointing quarterly earnings. Tesla shares fell from $151 to $140. And the downtrend continues... Tesla shares are trading for around $120 today.

 We're "beta" testing our newest newsletter, Stansberry International. As the name implies, Stansberry International looks for the cheapest stock markets in the world... and recommends the best opportunities in those markets. Co-editor Brett Aitken recently sent us a note from his home in Spain...

 Property investors have Spain in their crosshairs right now. And it's creating the most activity in the property sector we've seen in four or five years.

Over the past few months, U.S. firms have been buying up bank-owned properties, apartment buildings, and other properties around Spain.

Among them are the biggest names in the business, including private-equity giant (and True Wealth holding) Blackstone Group. In July, Blackstone bought $170 million worth of apartment blocks. That's chicken feed for a firm like Blackstone. But it's just getting started...

Reports say Blackstone is bidding against Goldman Sachs for another 1,458 housing units and another 1,500 garages, which Madrid's local government has put up for sale. Hedge fund Elliot Management has spent nearly $1.8 billion on various Spanish investments, according to Spanish financial newspaper Expansion.

Last Friday, Expansion reported that Spanish banking giant Banco Santander is about to close a deal with another private-equity firm, Apollo, to take over its real estate division for nearly $950 million. The deal includes bad debts but not its properties, which will stay on Santander's balance sheet. Apollo will manage the bank's property portfolio, which has a gross value of around $10.8 billion... worth about $5 billion after provisions. The deal brings Apollo's Spanish investments to about $2 billion.

Several other well-known funds have already invested in Spain (or plan to).

 Spain is also flooded in problematic property.

In June, Spanish real-estate firm RR de Acuña reported that Spain had about 1.7 million new and previously owned properties for sale. About 350,000 were bank-owned. The remaining 1.4 million were privately owned or in developers' hands (some of which are bank-owned).

Another 400,000 properties were under construction, and the courts owned 150,000 more. In total, the actual and potential number is more like 2.2 million properties. And there are an additional 4 million potential unit sites for sale that are ready to build on.

 I (Brett) spoke with Spanish real-estate expert Ian Cassidy. He said there has been a recent flurry of portfolio sales. And according to Ian, most of the headline deals so far have been around the $135 million mark. But larger deals are expected. Deutsche Bank just closed on a reported $473 million commercial property acquisition from Spain's SAREB, a government-formed bank designed to absorb bad debts.

 In addition to Banco Santander, other Spanish banks are offloading their real-estate divisions. Ian said the deals to date account for a very small percentage of the problem, with around $153 billion in bad debt still sitting on the books across five banks... and another $67 billion at SAREB.

 From talking with some in the banking sector here, the bleeding hasn't entirely stopped in the property market. The year-to-year percentage in the number of transactions was down almost across the board last quarter. Some say prices could fall another 10% or so. But with all the foreign cash pouring in, the decline might be slowing.

In some parts of the country, properties are selling at 40%-50% discounts from their highs. In other parts, the discounts are higher. Along the Mediterranean's Costa del Sol, some properties are selling at 80% discounts from their 2008 highs. British newspaper Telegraph reported a luxury property near Gibraltar going for $230,000 – down from $1.3 million in 2008.

If the bottom isn't in yet, we're getting close. And we'll continue to monitor the situation in future issues of Stansberry International.

 Alliance members can access Brett's latest Stansberry International "beta" issue on the Stansberry & Associates website.

 New 52-week highs (as of 11/25/13): Automatic Data Processing (ADP), American Financial Group (AFG), Becton-Dickinson (BDX), ProShares Ultra Biotechnology Fund (BIB), Chubb (CB), CVS Caremark (CVS), EnerSys (ENS), Energy Transfer Partners (ETP), iShares Germany Fund (EWG), iShares Nasdaq Biotechnology Fund (IBB), Johnson & Johnson (JNJ), ProShares Ultra KBW Regional Banking Fund (KRU), 3M (MMM), Navigators (NAVG), ONEOK (OKE), Procter & Gamble (PG), ProShares Ultra Health Care Fund (RXL), Sears Holdings (SHLD), Targa Resources (TRGP), Travelers (TRV), and Wal-Mart (WMT).

 A reader comes to our defense in today's mailbag. It's always appreciated. Send your feedback to feedback@stansberryresearch.com.

 [Paid-up subscriber Don Best], with all due respect, you should know better, Stansberry Research is not a fortune cookie, nor a magic 8 ball. They simply provide their research, data and recommendations based on the information at hand and they give their honest assessment, albeit with more effort and due diligence than most publications. They work towards teaching their readers along the way, including how to make and determine their own assessments even with the facts presented. Seems as if you should be accountable to yourself rather than hold others accountable. I'll guess you're not as quick to tell them when they are right and made you a lot of money... Also guessing that you were accountable for that decision." – Paid-up subscriber C.B.

Regards,

Sean Goldsmith
Miami Beach, Florida
November 26, 2013