I had never driven up a river before... It was May 1999. I was in an old Toyota truck with Steve Sjuggerud. The river was the closest thing to a road we could find. When the river got too deep, we crossed dozens of cow pastures, asking the cowboys to open their gates and let our mud-encrusted SUV through. The cows said nothing.
It took us about three hours to drive roughly 25 miles, north of San Juan del Sur, Nicaragua. We were searching for a kind of Holy Grail – a perfect, undiscovered wave. We'd dreamed of this nearly our entire lives, growing up together in central Florida. Finally, we drove up about a 150-foot cliff, the jungle gave way, and we saw this:
If you're not a surfer, that picture might not mean much to you. But finding big waves that break, uninterrupted, for such a long distance is extremely rare. Finding a wave like this, without anyone else surfing it, is a dream come true. Finding a wave like this that's consistently good, all day long, is almost unique in the entire world. You see, in nearly every other great surfing spot in the world (Hawaii, for example), the wind blows the wrong way at least half the time. But along the southwest coast of Nicaragua, the wind blows offshore more than 300 days a year – the absolute perfect wind conditions for surfing. The conditions exist thanks to the unique geography (Lake Nicaragua)... Nothing blocks the Caribbean trade winds. I've been surfing this wave for 10 years now. I've never seen anyone else surfing at this spot – not once.
Why does any of this matter to you? Well, actually, it probably doesn't. But this wave (and one other world-class left point break) sit inside Rancho Santana, a vast track of mountainous, oceanfront land my friend Bill Bonner and several partners are developing. What was once a raw jungle has been transformed into a thriving community. Dozens of luxury homes have been built on these hillsides. Several families now reside here fulltime – living the dream of escaping to a tropical paradise. The photo below is the view from my friend Marc Brown's house, which overlooks one of the greatest waves in the world, a left-hand point break called Rosada.
Lots of people have asked me over the years, "Porter, what in the hell are you doing in Nicaragua?" But they don't anymore. Now they ask me, "Porter, where should I stay when I go?" Nicaragua is my favorite place in the world to surf and one of my favorite places to vacation. That's why I bought an oceanfront lot there three years ago and why I'm building a house this year. Why did I buy, rather than just rent? I bought because Nicaragua is still very affordable. I'm building a large house, with luxury finishes. In the United States, a house like this on the beach would cost between $2.5 million and $10 million, depending on location. I'll spend roughly 70% less. Given what I'm paying to build my house (roughly $90 per square foot), it will be hard for me to lose money on the deal.
My bet is, more and more Americans will want to own property outside the United States. Why? First, it's affordable. A fulltime cook or gardener costs $130 per month. You can still buy small casitas in good beachfront communities for less than $150,000. For retirees who may no longer be able to afford their dream retirement in the United States, places like Nicaragua will be very competitive with other locations, like Arizona or Florida. But for me, another reason is just as important: personal freedom. I think more and more people will want to escape, at least part of the year, to a place where the government leaves them alone and their neighbors are open-minded...
Realizing most people won't want to go to all of the trouble of building their own house, the developers down here have finally gotten around to building large, luxury condominiums. These new projects will make it easy to have a place of your own – there's backup power, zero maintenance, and steady rental demand.
If you're interested in learning more about the new condos at Rancho Santana, get in touch with Marc Brown (marcb@ranchosantana.com). My friend is a former software executive from San Francisco who moved to Rancho Santana in 2004 with his wife and two children. He's been dabbling in real estate down here for several years, and now he's managing the sales office for the community. Out of the 24 units they're building, Marc has already sold 10.
Pricing starts around $300,000 – which I think is a great deal, considering the beachfront location and the quality of the construction. As you can see below, these units will be finished soon. And when they're complete, prices will go up. Also, a lot of the people who bought land down here a few years ago have made a lot of money. I know some of these folks have decided to sell the land and buy a condo rather than building – and I know these condos will sell out faster than most people expect. This isn't the Miami condo market. There isn't much supply.
One last thing... Marc Brown is also an experienced big wave surfer. While some of you undoubtedly think all surfers are bums, the truth is, you can find lots of wealthy and well-connected surfers, including hedge-fund managers, doctors, lawyers, etc. I'm considering putting a surf trip together in August with Marc for subscribers and a few of my friends. I'll make sure we get the best accommodations at the Ranch. Marc will organize boats to take us to the best breaks. (It's much easier to get to the various spots with a boat.) I'm looking for maybe 10 other guys to join me (and probably Steve Sjuggerud) on the trip. We want to keep the group small so we can actually get to know each other.
Please... if you're not an experienced surfer, this isn't the trip for you. August is the big wave season down there. If you're interested in learning more about the trip, please send me a note (feedback@stansberryresearch.com). Tell me a bit about yourself and your surfing experience. I'll do my best to put together a group that's interesting, laid-back, and fun. I'm sure we'll have a good time and make some new friends, too. Maybe we'll turn this into a yearly thing.
New high: Caribou Coffee (CBOU).
In the mailbag... readers defend their favorite politicians and try to warn us about ol' Danny boy. Send your comments here: feedback@stansberryresearch.com.
"I strongly object to libelous characterizations in Crux. To call Joe Biden and other mainstream Democrats 'commies' betrays either ignorance as to what a 'commie' actually is or willingness to lie about people in order to vent hatred. Neither belongs in S&A documents. It is about as accurate as describing Porter (seemingly a good, decent libertarian) as an anarchist. Likewise, to describe U.S. Rep. Corrine Brown as a congresswoman 'who can't read' is an outrageous mischaracterization.
Your evidence is that she stumbled over words while reading from a prepared statement that was essentially a light moment for her constituents (a matter of horsing around about local pride in sports teams). That is no evidence that this representative, who has bachelor's and master's degrees from respectable Florida universities, has been a business owner and professional college counselor, and has represented her district since 1993, can't read. To whoever wrote these things: Please lose the vicious streak. I certainly hope you look for better evidence to characterize securities than you did for these smears." – Paid-up subscriber Eric Klinger
Porter comment: If you'll take the time to read the Communist Manifesto, you'll find that nearly every single article has been adopted by the government of the United States, including state-owned schools, paper money, social security, progressive taxation, etc. Most people don't understand communism and democracy aren't mutually exclusive. In fact, history seems to prove when people are given the chance to vote, they tend to vote for communist ideas. Biden is clearly a communist. And a majority of people in the U.S. seem to like it that way. I'm not one of them, as you noted, which makes me a "libertarian." Funny, we used to just call those people "Americans."
"If I were you, I'd be more worried about Comrade Ortega in Nicaragua than Comrade Obama in the USA. We have a system for getting rid of elected officials who screw up in the USA. In Nicaragua, they're still experimenting with democracy, and Comrade Ortega appears to believe it's time for the experiment to end. Perhaps he'll take a page from Comrade Castro, or Comrade Mugabe in Zimbabwe, both of whom have seized real estate belonging to wealthy residents. So far your US assets probably haven't been seized, unless you were one of the unfortunate GM or Chrystler bond holders." – Paid-up subscriber Michael Stephens
Porter comment: If we have a system for getting rid of elected officials who "screw up," I've never seen it work. The idea that your vote counts is absurd... at least if your vote is for less government. More than 90% of Congress is re-elected, year after year. Given these facts, the government will never willingly give up the power it now enjoys in our society. I don't think Comrade Danny could do worse if he tried. I'll never understand why so many Americans ignore the obvious: We have the most confiscatory tax policy of any country, anywhere in the world. It doesn't get any worse. And it's not going to get any better.
Regards,
Porter Stansberry
Miami, Florida
June 8, 2009