One of our most controversial topics...

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

As of 09/11/2013

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.

My thoughts on department-store chain J.C. Penney are well-known.

I would love to know what these guys see in J.C. Penney. I imagine they realize that if they liquidate the inventories and sell the real estate, they can double or triple their investment dollar.

Regarding my short position in J.C. Penney, which I recommended in the latest issue of my Investment Advisory... You should be aware I hedged that trade. I'm long the stock of a similarly positioned retailer where excellent management is making far better choices in the application of capital spending.

I (Porter) have been writing the S&A Digest since late 2006 – almost seven years. Aside from George Soros and religion (both of which we struggle to never mention), there's one topic that generates more negative feedback than any other...

It's the controversial club, called The Atlas 400, that I founded with a handful of old friends four years ago. Honestly, I have no idea why the topic gets some subscribers so heated. The idea seemed simple to me. I started this club because I know how important and valuable strong friendships can be.

Just about every good thing I have today in my life came about because of a friend. I got my first job in the investment world because of a friend (Steve Sjuggerud). I launched my own business with the help of a friend (Bill Bonner). And I even found the incredible Sean Goldsmith through the help of a friend (Dr. David Eifrig).

I'm sure if you think about the things you enjoy the most in your life today, nearly all of them were given to you by a friend or came about directly because of something a friend did to help. So who wouldn't want to have more good friends? And who wouldn't want to be friends with a handful of successful, like-minded people from around the world... with very diverse backgrounds and skills?

That's exactly what I had in mind back in 2009 when I asked about a dozen of my best friends and colleagues in the business world – people like Doug Casey, Bill Bonner, Rick Rule, Matt Smith, and Van Simmons – to become founding members of The Atlas 400. I wanted the core of our club to be representative of the membership we were seeking – intelligent, successful, and open-minded...

Since then, we've taken nearly 1,000 applications to join our club. And we've accepted about 10% of those who have applied. We could have had a much larger – and more financially successful – club. But that was never my intention. In fact, I didn't build this club to own it or profit from it. I've never taken a single penny in compensation from The Atlas 400. All of our board members (including myself) are volunteers. The club's members own The Atlas 400, not me. We're registered as a not-for-profit business... Our members are the shareholders. Once you understand that this isn't about money (or business) – at least not directly – you might finally get it.

What's it really about? Let me explain it this way. I spent a week with two of the greatest people I've ever known – Bill Bonner and Doug Casey – touring Argentina in 2005. We were looking for property – huge parcels.

Bill ended up buying a 400,000-acre ranch in Salta. Doug ended up making a deal to develop a large resort (Estancia de Cafayate) near a beautiful wine country town way up in the Andes mountains. We went to half a dozen different little towns, stayed in fine hotels, and ate at great places. There was a legendary poker game against a bankrupt landowner, for high stakes. There was a night I'll never forget at a gaucho bar on a working ranch, with freshly killed pigs spit-roasted over a bonfire.

And there was the best lunch I've ever had in my life... at a tiny restaurant way up in the Andes. We had Argentinian steaks, red wine, fresh vegetables – everything looked like it had been picked out of the garden that morning. The bill came to $2 per person, including tip. We used Doug's personal connections to make sure that everywhere we went, we would be among friends. It was the greatest "road trip" I ever took.

"Why don't we do this more often?" we all asked each other. At least once or twice a year... why don't we just call a bunch of friends together and see who wants to go on an incredible adventure, somewhere interesting in the world? With the right people, we could always be among friends. We could have a strict "no a**hole" rule... nobody wants to travel (or be friends) with folks who aren't flexible, who complain about every little thing that goes wrong. And that discussion is what began The Atlas 400.

Today, the Atlas 400 membership is comprised of about 100 folks – some of the most intelligent and interesting people I have ever come in contact with: a Los Angeles music executive, one of the world's bestselling authors, hedge-fund managers, and a managing director at one of the largest financial institutions in the world. There are people who have made fortunes in real estate and have developed lucrative small businesses. These people, who are all at the top of their game, share one major similarity: They've earned their success in life. They don't take it, or their friends, for granted. They're exactly the type of people you would want to have as friends, neighbors, and business partners.

I founded The Atlas 400 to meet, travel, and build friendships with the best and smartest people in the world. Unfortunately, there are still plenty of people who can't seem to figure out that this isn't a cult of personality, it's not some kind of multilevel thing. And it's not an attempt to organize inside information from public company executives. It's just simply about our mutual desire to share extraordinary experiences with other interesting people. And that's exactly what we've all agreed is the ONLY mission of the club: to bring intelligent, successful, like-minded people together to exchange ideas... enjoy new experiences... and make new friends among equals.

If there's any "conspiracy" angle to the group at all... it's that most of us don't trust the government. We know from our own experiences that the middle class is being destroyed as higher taxes and inflation drive real wages lower. We are aware (if not yet afraid) of what these trends mean going forward. We know democracies can collapse when there are more people on the dole than not... And that's the situation we're heading for right now.

We're also concerned that these trends might get worse. We know that applications from expatriates to renounce their U.S. citizenship are up around six times from last year and up from almost nothing five years ago. We know President Obama has said he will limit the amount of money we can save in our 401(k)s... and increase the amount of money we're taxed to fund the massive entitlement programs in the U.S., which have already promised benefits totaling $1 million per citizen in the U.S.

Where is that money going to come from? We don't think it's a good sign that the G20 – the gathering of finance ministers from 20 of the world's leading economies – just announced it will share tax records around the world to crack down on individuals and businesses who are "cheating" on taxes.

As I've discussed many times before, I think it's prudent to take some steps to protect yourself against a major financial collapse in the U.S. But there's more to becoming a truly international person that merely buying some real estate and opening a bank account. You'll need friends abroad and people to help guide you to the right lawyers, accountants, and communities. Luckily, our members are an international set. Many of our members have multiple passports and bank accounts and property around the world. They're taking real steps to protect themselves and their families from what is happening in our country.

But let me be abundantly clear... We are not a club for "preppers." We do not see doomsday approaching. We simply see opportunities and additional freedom by networking globally rather than locally. Just imagine what happens when I tell my golf foursome at the local country club in Baltimore that I'm buying up beachfront lots... in Nicaragua. They look at me like I have four eyes. They're nice guys, good people. And I wish them well. But they were interested in buying $2 million homes in Hatteras five years ago. I bought my lots in cash for less than they spent on a down payment. And of course, I still own all of my properties.

That's just a minor example. It surely could have worked out another way. The Atlas 400 isn't really about making money... or buying real estate. It's simply about building new relationships with very high-quality people... and experiencing the best the world has to offer.

In my experience, you're either the kind of person who is very interested in the world around you, interested in meeting new people, going to new places, learning new things, and finding new opportunities... or you're like most of the "sheeple." You're just going to keep doing what you've always done... and wondering why your results never change much. When that gets too depressing, you'll take a pill and blame other people for your problems.

What kind of person are you? This club is for people who have something to offer. We're looking for people who come into this group with the right attitude... And that attitude is "how do I add value to the group?" Relationships take work... And The Atlas 400 is no different. But if you're willing to try to add value to this relationship, then the club is a perfect fit for you. And that's how our current members view it as well.

In short, we want members who are positive... who see the potential in our club... and who are willing to help us make it one of the world's best and most exclusive groups.

Yes, this club is expensive (and we're on the verge of increasing the membership price by 50%). But if you have the means, you should consider applying. It's one of the most valuable affiliations I have in my life... I likely dedicate more time to Atlas than to any other pursuit outside of my family and S&A.

We have an application process to ensure you're a good fit for the club, and vice versa. If you'd like to apply to the club and learn more about this opportunity, simply click here...

After reviewing your application, one of our club representatives will contact you with the next steps.

Oh, and one more thing...

We've secured exclusive use of one of the country's greatest hunting lodges, Cabin Bluff in Georgia, from January 23 to 26, 2014.

We hosted our first event there last year, and it was a huge success... Our days were filled with quail hunts, boar shoots, golf, and leisurely walks beneath the giant, mossy oak trees.

It's a perfect setting to relax and enjoy the company of fellow Atlas members.

Your editor at Cabin Bluff

We've got several trips before Cabin Bluff (including our jaunt to Tuscany, which we leave for next month)... But we're already completely booked for those.

Cabin Bluff will be your first opportunity to meet Sean, me, and the other (and frankly more impressive) club members. We only have a few spots left.

I truly love Cabin Bluff. I can't wait to go back. I hope I'll see you there in January...

I hope you'll excuse my long discussion of Atlas... and our country's current state of affairs. As you know, I'm at no loss for words on topics I'm passionate about. And I'm passionate about this club.

But we'll move on to what's happening in the financial markets...

Gold is down $4 an ounce to $1,360... And yields on the 10-year Treasury are steady at 2.96%. Yesterday, President Obama said he'd hold off on bombing Syria, so we're not seeing any major market moves.

Yesterday, Apple held an event to announce the release of new iPhones... The consumer-electronics giant released the iPhone 5C – a phone that starts at $99 and has a colorful case. It also announced the higher-end iPhone 5S. This new phone will have a thumbprint scanner, longer battery life, and faster processing, just to name a few improvements to the iPhone 5.

The market, it seems, was disappointed... Perhaps investors were expecting a rumored deal with China Mobile, China's largest mobile provider... Or a "smart watch."

Apple fell as much as 6% today to less than $470 per share. I've said multiple times that Apple is a buy at $400 or less. I originally made the call in the February 5 Digest Premium.

In that piece, I argued Apple's true value didn't lie in its ability to continue making revolutionary products...

And after today's decline, Apple shares are trading at a lower price than when billionaire investor Carl Icahn initiated his position last month.

Our indicators of a slowly improving economy – shipping and commodity stocks – are still ripping higher today...

Shares of Eagle Bulk Shipping and Genco Shipping jumped nearly 5% today.

U.S. Steel is up around 1%. Steel Dynamics, Frank Curzio's favorite way to play the rebound in steel, hit a new high. Small Stock Specialist readers are up nearly 50% on the recommendation.

We'll return tomorrow with another market-focused Digest. And I'll take the helm again on Friday.

New 52-week highs (as of 9/10/13): ProShares Ultra Biotechnology Fund (BIB), Emerson Electric (EMR), EnerSys (ENS), Ericsson (ERIC), Expeditors International (EXPD), Fluidigm (FLDM), iShares Biotechnology Fund (IBB), Integrated Device Technology (IDTI), Laredo Petroleum (LPI), Steel Dynamics (STLD), Constellation Brands (STZ), Triangle Petroleum (TPLM), Targa Resources (TRGP), and Targacept (TRGT).

We look forward to tomorrow's ravenous mailbag... In the meantime, enjoy this kind letter. Send your notes to feedback@stansberryresearch.com.

"Very well done. Your essay [A private letter from Warren Buffett] certainly clears the air. This kind of knowledge should be taught in high school, at the least, in college. It would have saved me thousands." – Paid-up subscriber C. Brown

Porter comment: We're glad we were able to teach you something... As I say on Fridays, there is no such thing as teaching, only learning. And it looks like you've got the ability.

Regards,

Porter Stansberry
Baltimore, Maryland
September 11, 2013