Goldsmith comment: Porter is otherwise occupied in Nicaragua today, so I'm handling The Digest. We'll be back in the office on Monday.
This weekend, we're going to play every golf course in Nicaragua... all two of them. More accurately, Porter and a bunch of guys will be playing, as I'm the one male from Augusta, Georgia, who doesn't golf. One of Porter's business partners arranged a golf tournament for 16 friends down here. We're in Managua today, and we're heading to a course near Rancho Santana tomorrow. Luckily, Corona is sponsoring the tournament, and it hired local models to hand out beer... so I'll have something to keep me entertained.
We're not the only ones who think Obama is leaning a little to the left with his massive tax hikes and sweeping nationalization of American business... A tried-and-true socialist, Venezuelan President Hugo Chavez, acknowledged his new competition in a recent anticapitalism speech...
"Hey, Obama has just nationalized nothing more and nothing less than General Motors. Comrade Obama! Fidel, careful or we are going to end up to his right."
Comrade Obama is a major reason why we're in Nicaragua right now. Sure, the country is beautiful and the surf is great. But America is in trouble, and if things keep getting worse, it will be nice to have somewhere to escape. Plus, where else can you build a super-premium beachfront home for $90 a square foot? Similar construction in the U.S. would cost 10 times as much. Not to mention, you can have a maid, driver, and cook working full time for less than $10,000 a year.
If you've been considering a pied a terre outside the U.S., you might want to consider Belize... I ate breakfast with Mike Cobb this morning. He's the CEO of ECI Development, which owns Gran Pacifica – the development where Porter is building his home. Over a plate of gallo pinto (the local rice-and-beans dish, which is served with nearly every meal in Nicaragua) and eggs, he told me about his latest project, Grand Baymen – 3,400 acres of beach property in Belize. I haven't seen the property, but the website looks great. Mike told me he's preparing a special offer for Stansberry readers. I don't want to give specific pricing because nothing is finalized, but I assure you it's cheap. Porter will have more details later.
Yesterday, the SEC charged Angelo Mozilo, the snappy-dressing and overly tanned ex-CEO of Countrywide Financial, and two of his former chief financial officers with civil fraud and insider trading.
"The Moz" is as crooked as they come. His company churned out billions of dollars worth of subprime mortgages to under-qualified borrowers, who often showed no proof of income or even a job. Then, he blatantly lied about his company's risk to investors. Meanwhile, he sent e-mails around the company describing the mortgages as "toxic" and "the most dangerous product in existence." He said Countrywide was "flying blind" in regards to how its loan portfolio would perform in a downturn. The Moz soon found out...
At its peak, Countrywide was a $45 billion company. But it crumbled as its portfolio of garbage loans deteriorated. Bank of America bought the company with a $4.1 billion bid – still grossly overpaying – in January 2008.
Kudos to our editor in chief, Brian Hunt, who wrote the best headline I've seen for the Mozilo debacle. I don't want to ruin the surprise, but you can check it out here – complete with a picture of the leathery beast.
Since Dan banned you from sending in e-mails on basically any topic other than George Soros, there's not much to work with today. Give us something interesting over the weekend... feedback@stansberryresearch.com.
"I just ordered Penny Trends and you recommend using trailing stops on these penny stocks. I use Zecco and their requirements for trailing tops are $5 or greater stocks and minimum 100 shares. This means I can't use trailing stops on any penny stocks. Can you suggest our discount brokers that do not have this issue with tailing stops?" – Paid-up subscriber Tony
Goldsmith comment: I don't know how Zecoo handles its trailing stops, but we recommend you never enter your trailing stops into the market. Too many market makers are happy to move a stock just to pick off your position. Instead, you should simply keep a mental note of your trailing stops and follow them or use a separate service that tracks them for you and alerts you when it's time to sell. TradeStops is a good example.
Sean Goldsmith
Managua, Nicaragua
June 5, 2009