Goldsmith comment: Porter's in Miami and finishing his issue, so I'm on The Digest today.
The guys at Canadian holding company Brookfield Asset Management are some of the best real estate investors in the world… And they say it's time to buy…
"There are still a lot of opportunities out there, and we think there will be for 24 months minimum. I don't think we feel any rush to be doing anything," said CEO Bruce Flatt.
Flatt said the company has spent the last year buying out partners and buying distressed assets, "We still believe this is one of the greatest investment periods for these type of assets that we've seen in a long time," he said. He also said the Toronto-based company wants to put capital into "distressed opportunities as we find them, and where we have an operating base."
Brookfield launched a $4 billion "Real Estate Turnaround Consortium." It's also stepping up investment in its residential operations. Brookfield spent the past six months buying residential land, and invested $250 million in its U.S. residential business… "We believe we are past the worst of the down cycle in housing," he said. "While we don't expect a robust return, we believe we have or will soon see a bottom in many of the key U.S. housing markets."
It makes sense for Brookfield to buy real estate, because that's its business and it probably won't get prices like this ever again. Plus, they'll probably hold the real estate for a very long time.
For the average investor, however, there are easier and faster ways to make money, like Porter's latest recommendation…
Porter's latest issue of PSIA comes out tonight, and he's found the perfect way to play the decline of the dollar and coming inflation boom. No, it's not gold… This trade will likely return much, much more than gold. He's recommended a business that will make a killing with inflation, and whose massive debts will soon be valued in a worthless currency… a win/win. Porter thinks you can double your money on this trade and it would still be cheap. To sign up for PSIA, and access Porter's latest trade, click here…
Life is good in the bond markets… Bill Gross, manager of the Pimco Total Return Fund – the world's largest bond fund – just bought a $23 million home in Newport Beach, California – where Pimco's offices are located. The 11,000-square-foot, nine-bedroom, 12-bath home apparently didn't suit Gross' tastes, as he's leveling it and building a custom home on the property… You can view photos of the home – 1 through 4 are of Gross' house – an obvious tear down, here.
The most shorted stock in the Russell 1000 Index is fast food-chain Chipotle Mexican Grill (CMG), with 43.74% of the float sold short. I don't know why the market is so bearish on Chipotle – other than maybe its big rise this year. It's a great business, serving a quality product, and stores are always teeming with customers.
On the other end of the spectrum is Charlie Munger's insurance company Wesco Financial (WSC), with only 0.21% of shares sold short. You can view the full list of the most and least shorted stocks in the Russell 1000 here.
If you're betting on the market's continued rise, you might want to look into Chipotle – stocks with a heavy short interest get an extra boost in up markets from all of the short sellers covering their positions.
As we pointed out yesterday, it's 13F season, meaning all of the best institutional investors are reporting their quarterly holdings. We'll keep you up-to-date as the best and brightest continue filing. Yesterday, we covered John Paulson. Today, we'll briefly look at Ken Heebner's Capital Growth Management and True Wealth pick, Bruce Berkowitz's Fairholme Fund.
Heebner, whose CGM Fund was the best mutual fund of 2007, is 9.8% invested in financials. His largest position is $415 million in Goldman Sachs. This quarter, Heebner initiated new positions in Ford ($364 million), J.C. Penney ($247 million), and Bank of America ($244 million).
Financial stocks are also Berkowitz's largest holdings at 5.5% of the portfolio, although his single biggest position is Big Pharma company Pfizer at $1.3 billion. His financial holdings include American Express and AmeriCredit. Berkowitz also bought $150 million in Berkshire Hathaway during the quarter. Berkshire used to make up about 20% of the Fairholme Fund, but Berkowitz sold last year, figuring he could find higher returns elsewhere.
New high: Eldorado Gold (EGO).
We may have to continue on the Obama topic for a while longer if it continues to produce this high-quality of a mailbag (and today's is but a small sliver)… What are your thoughts on the commander and chief? Let us know: feedback@stansberryresearch.com.
"I SUPPOSE BERNIE MADOFF IS YOUR HERO, EXCEPT HE GOT CAUGHT!" – paid-up subscriber Ron Vara
Goldsmith comment: Bernie Madoff is far from our hero. He is a low-life thief – as are all thieves. It is humorous you're drawing the comparison between him and Obama – considering they both unapologetically steal from the rich.
"Obama! saith, Obama! protecteth, and oh yes, Obama! lieth.
"'Send me your tired, your poor, your unproductive masses and I will give you EVERYTHING! Because citizenship will no longer be an option', 'Be not afraid of the future, for it will change...yes, change you WILL believe in!', 'For lo, the Liberal Minions in Congress shall make it so, just as I have decreed unto them','They shall require from all of you who are able and productive to eventually forfeit all of your earnings and savings so that the undeserving shall also profit equally.'
"'And the Government shall Prosper and Multiply!' 'Debt is Wonderful! As long as there are future workers being born, all will be well','Do not worry about your health. Let the hard working prosperous worry about it, for they shall pay through the nose, as the Government has commanded. Remember, market competition is Evil. Socialism is Good','And Amerika, Mexico, and Canada shall become one nation, one monetary system, and under no one God, with restricted liberties and social justice for all.' So speaketh the high one, OBAMA!
"On a more serious note, if S&A Alliance offends any of you for speaking forth what they believe in, then please "request" a refund and take your investment dollar's elsewhere where their political views are more to your liking: say like ACORN." – Paid-up subscriber W. Gillette
"I find the comments by some unhappy subscribers a bit ironic... personally I don't want advice from a man who can't afford whatever house he wants in Miami or anywhere else... I want one to that is why I pay rich people to tell me what they know... Just my opinion.
"As far as being insulted about remarks in reference to Obama... well it just goes with the job... have we ever had a President that wasn't made fun of and been the center for endless jokes?? I doubt Obama gives ------ what is said about him... he has what he wanted. The Presidency and he has Oprah to thank for it... who cares what anyone says about him... he sure doesn't care about you or your tired back from working to pay taxes to keep him living the life of a king... there are many people on this planet that need our concern... The President of the USA is not one on them... Obama Osama the 2 main names in politics and one is President and one took down New York City... similar name... similar results just different methods..." – Paid-up subscriber L. Sanders
"I find it interesting that anyone would be offended by your "Komrade Obama" title. This is America! We can say what we wish! Your reader's reply of "Right-wing Neanderthal" is quite telling of the liberal mind-set-----That is--It is OK for them to "name-call" as they did for 8-years of spewed vitriol against Bush. Anyone who opposes or "name-calls" their "supreme being" is offending. Hmmm! I think Mr. Rell's reply speaks for itself. This fits with the current "group gasp" from the left and network television that Americans have decided to stand-up and speak-out against our ever increasing Big Brother. (Could this be democracy at work?) It is time that all Americans, regardless of political affiliation, stop and read the constitution.
"If they will do that, think for themselves, rather than party influence, they will undoubtedly conclude that government is overreaching, regardless of who is leading, Republican or Democrat or Independent. It is not the responsibility of the federal government to provide health care or anything else for that matter. The government is to protect us and maintain infrastructure, not provide entitlement. The constitution is really that simple in its brilliance. The constitution in its entirety is designed to keep government out of our lives, not place government into our lives. The federal government is the corrupt monster, not big business. Big business has its issues as all entities do, but I have never seen a single poor person create a single job..........HMMMM? We need to throw all of the crooks out and start over. I have a feeling that 2010 is going to be the beginning of that change. Komrade Obama and the Chicago Machine will not likely get a second term either. Keep up the pressure, keep America a democracy and keep America a free market system.
"One closing note... my business is a government contractor. My segment has received a huge piece of recovery funds ($250Mil). Guess what, not a single dime has been spent after 7 months. Why? The procurement process. That is the area that the media needs to investigate.........the bottleneck of spending because of the massive and inefficient procurement system that often takes years to spend allocated funds. Throughout the federal system there is literally billions of dollars that have been allocated and not spent because of procurement challenges. Komrade Obama thinks that they can quickly spend hundreds-of-billions in less than 24-months. This Will never happen unless they change the spending infrastructure and protocol." – Paid-up subscriber JC Martin
Regards,
Sean Goldsmith
Baltimore, Maryland
August 14, 2009