'Lions have entered the camp!'... RIP Steve Jobs... Constellation firing on all cylinders... Is UniCredit out of cash?...
Editor's note: S&A Digest editor Sean Goldsmith has just returned from his trip to Africa. In the first few bullets today, he shares one of the "highlights" of the trip.
"Lions have entered the camp!"
The Atlas 400, the private wealth club Porter and I created a few years back, was in Botswana for a safari. It was our last excursion of the year. One night, our candlelight dinner beneath the African stars was interrupted with a message. A group of the most vicious predators in the bush was huddled outside the camp gates (which rise only four feet high). About 20 of us were seated at a large table, overlooking the Okavango delta. We were drinking Pinotage (South Africa's contribution to viniculture) and enjoying our lamb course. The conversation stopped...
I asked Vasco, the camp's general manager, if I could see the lions. We walked over to the gate, and he shined a light on nine lions lying feet from us. They looked peaceful. But these animals are killers.
The Atlas 400 is a group of super-successful world leaders. There's no lack of ego or ability. But being confronted with a pride of lions put everything in perspective... immediately.
The Mombo camp in Botswana is a game reserve. Elephants, hyenas, zebras, and giraffes roam freely... often wandering into the camp during the day to feast on greens just outside our rooms. At night, you can hear buffalo shuffling underneath the tents... and insects chirping all around.
As a game reserve, Mombo prohibits anyone from carrying a firearm. It's a romantic idea. But when a pride of hungry lions gathers 20 feet from your dinner table, the lack of defense is startling.
After dinner, three flashlight-wielding camp employees walked each guest back to his tent. Without weapons, our guides were little more than an appetizer for the lions. Still, we appreciated the effort. As one couple walked back to their tent, a lion ran beneath a walkway (only about four feet off the ground), then leapt at a water buffalo. It missed.
I was still at the dinner table when this happened... listening to what sounded like a waterfall. I later found out it was a herd of buffalo fleeing certain death.
The morning after our lion invasion, I asked Vasco how nervous he was... "Not nervous," he said. "That happens all the time." I prodded for a more honest answer. "On a scale of one to 10, how nervous were you?"
"10."
The lions weren't my only close encounter. As I said, animals roam freely in Mombo...
The safari was amazing. But we weren't there entirely for the animals. The idea behind The Atlas 400 was to get business and thought leaders out of their element... to give them new experiences... and to introduce them to like-minded people. Dropping nearly 20 Atlas members in the middle of Africa certainly accomplished those goals.
On the trip, I witnessed several multimillion-dollar business deals develop. And I saw complete strangers leave the excursion as friends. Three members just reunited in Hong Kong to scout a business. While on the trip, I constantly thought to myself how lucky I was to be associated with such accomplished and intelligent people. I'm excited for our next event... wherever in the world that may be...
I got the above text message on my Apple iPhone 4 just minutes after news of Jobs' death surfaced... a testament to the world Jobs left behind.
We didn't know Steve personally. But as financial analysts and Apple users, we can appreciate the empire he started more than 40 years ago. Apple, which he and Steve Wozniak launched from a California garage, now has a market cap of around $350 billion... one of the greatest creations of wealth in history.
You'll read plenty of tribute pieces to Steve Jobs today. The Wall Street Journal posted a bunch of Steve Jobs quotes here. It's interesting how often he mentions hard work and relentlessly pursuing a problem until you understand it better.
Extreme Value World Dominator pick Constellation Brands is up 9% this morning. Constellation is the world's largest maker of premium wines (between $5 and $20 per bottle). It's the second-largest winemaker in the world (next to privately held E&J Gallo).
Constellation announced today that its second-quarter profit soared 78%. It's been selling its less profitable businesses, focusing more on its core premium wine brands, cutting costs, and paying down debt for the last few years. This is a great business emerging from a few mistakes and a difficult couple of years. Management is making all the right moves. As a result, the company is gushing free cash flow like never before.
I'll never understand why folks buy risky stocks when they can buy stocks like Constellation, which are far less risky and have a much better chance of showing a profit than the overwhelming majority of tiny mining and biotech companies.
There's much more to the Constellation story. But only Extreme Value subscribers get to know the maximum buy price on our recommendations and precisely why I believe the stock will double in the next couple years. To get access to our full report on Constellation, click here for access to Extreme Value.
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New 52-week highs (as of 10/5/11): None.
We know Dexia's fate… But how about our bellwether of European banks? In today's mailbag, one reader relates his experience with the Italian financial institution. Send your e-mail to feedback@stansberryresearch.com.
"I went this morning at 7:45 local time in Napoli to take some more money out of Unicredit. Discovered I had the Unicredit Visa and not the ATM card. Still wanting some cash, I whipped out my USAA debit card. My American ATM card was refused by Unicredit as 'international use not allowed.' Since I have been using this bank's ATM internationally for some 20 plus years, I immediately performed a check. I went over to DB and routinely withdrew euro 500.
"Could it be that downgraded Unicredit is tight on cash and has cut off non-Italian withdrawals? I will be transferring more out of Unicredit in the next 5 minutes...." – Paid-up subscriber Terry Easler
Ferris comment: I don't know if it's out of cash, but I know at least one guy who wouldn't be surprised at all if it is...
Regards,
Sean Goldsmith and Dan Ferris
Baltimore, Maryland and Medford, Oregon
October 6, 2011