The recipient of Porter's infamous "boo" has more to worry about than his bruised ego... Former fund manager and car czar Steve Rattner is the target of an investigation at the hands of New York attorney general Andrew Cuomo. And the New York Times picked the story up on its cover this week.
The case stems from initial claims that Rattner bribed a New York State pension fund manager to invest $150 million in his private equity fund, Quadrangle. Now, as Cuomo's above quote signals, he wants Rattner for perjury.
Cuomo believes the information Rattner provided him in during the initial investigation in 2007 was false. New e-mails from Rattner have come to light undercutting his previous story. Now, Cuomo's team is poring through more of Rattner's documents and e-mails to nail him. Cuomo's even considering using Rattner's former lawyers as witnesses against him.
While we support Rattner's indictment, we're sure he managed the pension fund's money better than the state would have. Consider the updated investment plan for Pennsylvania's state pension fund...
The Board also adopted an updated strategic investment plan that continues the planned gradual shift, introduced last year (and subject to annual review), toward a greater allocation to fixed income investments in order to meet the liquidity needs arising from a projected increase in benefit payouts as the fund matures.
In other words, the fund is going heavy into bonds at record-low yields (it's also increasing its allocation to stocks). If you believe inflation is nigh, as we do, it's a terrible move.
(Whenever we write something like this, we get flooded with e-mails wondering how in good conscience we can continue to publish our bond service, True Income. Once again: There's a huge difference between the low-yield corporate and government bonds the pension funds are buying and the high-yield bonds at huge discounts that Mike Williams recommends.)
Meanwhile, the pension fund is reducing its allocation to real estate and other inflation-protecting assets like commodities. As Dan Ferris said in an e-mail to me:
They want more stocks, more bonds, less alternative, less real estate, less commodities, less absolute return. It's like they're going out for a walk, trying to step in the biggest pile of dog crap, and they just found it. I bet you'll find this in a lot of other states, too.
"This is the most fantastic opportunity I've ever seen..."
We recently sent Phase 1 editor Frank Curzio to China to find the best companies operating in the fastest-growing economy in the world. While in Asia, Frank met with one of the country's best investors. In fact, he met with the No. 2 analyst in all of China, as ranked by Thomson Reuters. The "fantastic opportunity" he told Frank about is a tiny island nearby – an island few people know exists – that holds billions of dollars of resources. Because of its resource wealth, this island is one of the most valuable pieces of land in the world (on a per-acre basis).
The tiny island has one of the world's largest deposits of a metal Frank calls "Supernova Gold." Scientists believe this mineral is synthesized in the cores of large stars before they supernova. It's also believed meteorites containing it slammed into Earth millions of years ago.
Like gold, this metal has also been used as a currency. Unlike gold, it's a "transitional metal," meaning it combines easily with other elements. This quality makes it a key element for industrial uses, including steel and batteries.
A couple international mining giants already earn billions of dollars every year from mining Supernova Gold on this tiny island. It's near China, so miners can easily export the metal to the world's biggest consumer. These two companies have been the exclusive miners on this island for the past 40 years.
But in a move that went unnoticed by even the mining press, a tiny company was granted four exploration licenses on this island... all located immediately next to huge, producing mines.
Less than 24 hours after our company secured its licenses, the mining giants bought up thousands of miles surrounding it. But the heavyweights were too late. They had already let this tiny competitor enter their market.
The company is in the earliest stages of development. It's sitting on some of the world's richest "Supernova Gold" deposits. It has zero debt. And it's preparing to spend its cash to mine the metal. (Mining costs for Supernova Gold are cheap – only $50 a ton – because the deposits literally sit on the surface.)
Frank believes readers could make 20 times their money buying this stock... And that's based on super conservative estimates. The company's own estimates are much higher.
Once word gets out about this mining company, its shares will explode. You have to get in early if you want maximum profits. Shares are trading just a penny under their buy-up-to price as I write. They won't stay there for long. To read Frank's report on this tiny Supernova Gold company, click here...
New highs: Altius Minerals (ALS.TO), Atlantic Power (AT), First Trust Dow Jones Select (FDM), Northern Dynasty Minerals (NAK), ConocoPhillips (COP), ExxonMobil (XOM), AmeriGas Partners (APU), Alexander & Baldwin (ALEX).
In the mailbag: We own up to a mistake. But we're still right. Don't think so? Call us out here: feedback@stansberryresearch.com.
"Loved your story in yesterday's Digest about Porter's outstanding performance in the wine game, and it made me wonder if he had seen the movie Bottle Shock, which includes a similar ruse. Based on the true story about the coming-of-age of the California wine industry, I highly recommend it for anyone who loves wine or thinks the French are snobs." – Paid-up subscriber Steve Testardi
Goldsmith comment: We've both seen the movie. I thought it was fun... Porter hated it. Luckily, he didn't take my bet, so I saved $1,000. And the ruse is harder to spot when you're in the middle of it.
"Looks like you guys aren't going to own up to your gross misinterpretation of Obama's agreement with the Republicans. I can see why, but don't you think you should at least print one sentence saying you were wrong about 3 years of unemployment benefits so all of us super-lazy unemployed will start to look for jobs?" – Paid-up subscriber Jim T.
Goldsmith comment: We were incorrect... The current unemployment benefits will be extended by 13 months (the unemployed don't get an additional 13 months of payments). Either way, our point is the same.
"So you say the government printing money makes the people think they have extra money to spend? How do they think they have extra money to spend if they did not get any of it? I do not have any of that extra money NOR DO I FEEL I HAVE EXTRA MONEY to spend... I ALSO do not know anyone who did or thinks they have extra money to spend than they did a few months ago... DO YOU? If so, how did you get it... so I can get in on it." – Paid-up subscriber Lowell Meyer
Goldsmith comment: Do you own stocks? Then you have some extra money...
Regards,
Sean Goldsmith
New York, New York
December 10, 2010