The Atlas 400 is heading back to Germany next week. You may recall, a dozen of us went to Germany last year for the club's inaugural event... So why would we return so soon? Because you can't beat perfection.
We had such a good time last year and the new members heard so many stories, they wanted to return. This year, we're beginning the itinerary in Leipzig, Germany. Again, Porsche was kind enough to host our group at its world-class test track outside of town. After a private tour of the factory, we'll race Panamera and 911 Turbos (I prefer the Panamera). The track re-creates some of the greatest racing corners from around the world... Check out this clip of Steve Sjuggerud ripping through the corners. I know the top speed of 150 kilometers an hour isn't too impressive. But believe me... when you're hitting those corners around 70 mph, your heart is pounding.
After the racing, we're taking a plane to Munich for Oktoberfest. In between dining at some of the finest restaurants in Germany, we'll share liters of German brew with 5,000 of our closest friends. It's hard to describe the energy at Oktoberfest. Every attendee last year said it was one of the "greatest experiences of my life." This picture (from our private corner of the tent) can't truly do it justice.
The big coup this year... I talked BMW into also hosting us at its private track. It never lets outside groups onto the track. Last year, we participated in a driver-training course between two airplane hangars (essentially a giant parking lot). We raced through cones, spun doughnuts, and drifted (watch a short clip here).
It was fun... But it wasn't racing on a track at close to 100 mph. I told our BMW host a training event would be a letdown after a day at the Porsche track. I also may or may not have promised a few of us would leave the country with new BMWs... My pleas, in addition to some help from our corporate contact at the company, got us in. We will race a fleet of BMW's different M-series vehicles for our last day in town. It will truly be a once-in-a-lifetime experience.
The club also has most of its events booked for 2011. In early spring, we're taking a luxury icebreaker ship from Argentina to Antarctica. It's an event straight out of National Geographic. Plus, we get to drink our scotch with million-year-old ice chipped from the glaciers.
Following our annual meeting in New York (held every June), we're heading back to Argentina. The world's foremost expert on bird hunting in Argentina has offered to host our group on a luxury bird hunt (thanks, Stuart). We're beginning the trip at a luxury duck-hunting lodge owned by a Paris-trained chef. Then, we're moving to hunt other species in the country. We'll also take advantage of the banks in Uruguay for our interested members.
Our final trip in 2011 is a luxury safari in southern Africa. The details are still in the works, but it will be fantastic. We're arranging face-to-face meetings with gorillas in the jungle... luxury camps built from scratch in the middle of wildlife migrations... and a finale in paradise on an African beach.
We're also getting together during the Alliance meeting in Zurich. We have several Swiss bankers and asset managers hosting the group for different events during our stay. Internationalization and asset protection is a major interest for most club members. If you're interested in the club, please find me in Zurich. In the meantime, you can learn more about Atlas here...
We received such a huge response from yesterday's mention of the New York conference, and it's such a great idea, we wanted to make sure everyone has a chance to send in his or her contact information. In short, we're working with a top New York-based firm to arrange a conference to tell our readers about a special way to protect their estate from massive taxes. Mind you, this strategy is not for everyone. It takes a minimum of a $250,000 retirement account. As I explained yesterday, the numbers work like this...
Starting next year, if you have $1 million or more in a retirement account, the government will take half when you pass that money to your heirs. With the strategy this firm created, that same $1 million increases to $2.5 million. You go from losing half your estate to more than doubling it. The firm we're working with has already closed several cases. The strategy works, and it's completely legal. If you'd like an invitation to the New York conference, please send us an e-mail to feedback@stansberryresearch.com with the subject line "RETIREMENT CONFERENCE" and your full name. If you already e-mailed us yesterday, DO NOT send another. We already have your information.
According to the U.S. Census Bureau, 14.3% of U.S. citizens – more than 43 million people – are living in poverty. Don't be confused here. This isn't Third-World, starvation-style poverty where you don't have clean running water or indoor plumbing and you might not live to the ripe old age of 10. In this kind of poverty, you might own a home. You definitely own a car, not to mention a few TVs and a couple computers. This is relative poverty. You know how relative numbers work... For example, remember when Cisco had a $580 billion market cap back at the peak in 2000? But it was "relatively" cheaper than Microsoft, which had a $590 billion market cap?
Poverty in the United States is mostly like Cisco, relatively cheap in 2000.
I'm sure we'll be flooded with e-mails about how callous I am. But you'll be wrong if you write one. I'm not half stupid enough to deny that too many people are suffering in genuine, dire poverty in the U.S. And I admit I don't have a good feel for how many true poverty cases are suffering due to poor attitudes about money, work, and telling the truth versus those suffering through no fault of their own.
If we weren't so overburdened with taxes that hinder us from making a living, we could do so much more to help those desperately in need and unable to help themselves. I figure Komrade Obama sees true indigents as sacrificial lambs in his quest to conquer the world. Crazy political leaders always think that way. They kiss or kill babies with equal zeal and purely for effect, as required by the ignoramuses who vote for them. Anyway, get used to these reports. The more new laws and taxes they pass inside the Beltway, the poorer people get out here in the real world.
The Wall Street Journal's bullish bias was on full display once again today. The Journal's website this morning hollered, "FedEx's Profit Doubles." I clicked on the link, and the article screamed, "FedEx's Profit More Than Doubles."
The market didn't buy it, as FedEx shares fell about 3.6% today. FedEx's international results showed strength, but domestically... FedEx will consolidate domestic trucking operations, close 100 facilities. and cut 1,700 full-time employees.
I've long held that investors should avoid FedEx and buy UPS whenever it's cheap. UPS earns consistently better profit margins and has higher returns on capital. Purely from an investor's perspective, UPS is a bigger, better business than FedEx.
India's central bank isn't nearly as afraid of hurting its economy as our own version of this most unnecessary of institutions. The Reserve Bank of India raised interest rates for the fifth time this year, increasing the key borrowing rate by 0.5%, double what was expected. Indian stock and bond prices fell, which is normal when interest rates rise. Then again, maybe raising interest rates is an easier decision than in the U.S. India's economy is unlikely to be crushed under an avalanche of bad real estate debt like the U.S. economy...
When I visited India several months ago, I was amazed to learn banks generally won't lend money to buy land... and the country has a strong tradition of individual land ownership. When you drive up and down the highways, you see little plots of land staked out with white stones. If you want to build an industrial park or a road or anything large, you have to deal with hundreds, sometimes thousands of small landholders. I've thought many times since then how, if your worst problem is a strong tradition of land ownership and a good legal system of land entitlement, you don't have a lot of problems.
But it's not India's worst problem. The worst problem is widespread government corruption. If you have a little accident and you're late for work, the cop comes over to your car... and you pay him and move along. Probably a lot of capital is diverted away from needed roads, bridges, factories, and homes and into the pockets of corrupt government officials.
New highs: Berkshire Hathaway (BRK-A), Esperanza Resources (EPZ.V), Silver Wheaton (SLW), Anheuser-Busch (BUD), DirecTV (DTV), CARBO Ceramics (CRR), iShares Silver (SLV), Philip Morris (PM).
In the mailbag... Readers write in with kudos for S&A, a broker recommendation, and tax questions. Send your e-mails to feedback@stansberryresearch.com.
"Thank God, and thank goodness for Porter Stansberry, Dan Ferris, all of you. I believe in looking for the pony under the pile, and this all feels so much better than a year ago. When hope was in hiding, you've been there with encouragement. I truly see you as helping us to take back our country." – Paid-up subscriber C. Howard
"I have had accounts at Fidelity for years. But I can tell you if you want to buy a stock at a better price by selling a put option, Fidelity will tell you in no uncertain terms you do not have enough sense to invest your own money. Thinkorswim is by far a better place to trade and has the very best trading platform going. To follow through with Jeff Clark's recommendation today to buy back a covered call and sell the underlying stock, you run into a brick wall at Fidelity. At thinkorswim it is a ten second trade. Thinkorswim also is of the opinion that you can invest your money the way you want to." – Paid-up subscriber JPW
"Komrade Obama's regime plans to increase the top federal income-tax rate on dividends from 15% to 39.6% by next year... What does this mean for the average small investor/holder of typical dividend paying stocks? By 'top federal rate,' do you mean everyone, or just the higher income brackets?" – Paid-up subscriber Buzz Annin
Ferris comment: "Top" generally refers to tax rates we believe are likely to be paid by the highest income earners. But we're not tax lawyers or tax accountants. So you should check with a professional for the real answer, as it pertains to your tax liability. The more the government taxes something, the less of it you get. Raising the tax on dividends means the average small investor will pay higher taxes on dividend income. He'll have no more incentive to seek dividends over capital gains, since they'll be taxed similarly. It'll also provide corporations with an incentive to avoid paying dividends. It seems Komrade Obama wants us to speculate more.
Regards,
Dan Ferris and Sean Goldsmith
Medford, Oregon and Baltimore, Maryland
September 16, 2010