The S&A Digest

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

As of 07/02/2013

Porter's broken keyboard... Big losses for Ford... Don't divorce in Britain... Icahn's apocalyptic prediction

Goldsmith Comment: My morning started like this... I got into work, brewed a cup of coffee, cracked open the Journal and opened my email, only to see this: "G|oldsmiy my key n/ boared is no WORK. U DO diguiewry]gt tODAY." I figured this was Porter's shaky attempt at typing after a few bottles of Brunello, but a phone call from the big guy cleared that up. His computer got wet in Miami, and his keyboard is busted. Well, since Porter is lost in the Keys on a fishing boat, I get to write the Digest today.

 Ford lost $5.6 billion in the fourth quarter, pushing the year's deficit to a record $12.7 billion. Falling sales and restructuring costs led to the largest annual loss in the carmaker's 103-year history. Ford's earnings have rivaled that number only once in the past 20 years, $22 billion in 1998.

 Good news for PSIA pick Nokia (NOK)... Today, the company announced forecast-beating earnings of $1.65 billion, up 19% year on year. The company also announced a $5.19 billion share-buyback program and an increase in the annual dividend from $0.48 a share to $0.56 a share. Nokia was up 7% in premarket trading and 44% since Porter's recommendation.

 Live in London? Think twice before getting married... As London bankers are rejoicing over their $17.4 billion bonus pool, it may be their spouses who truly reap the rewards. A recent, precedent-setting divorce case, Rossi v. Rossi, called for an antiques dealer to give his ex-wife a portion of his future earnings. Divorce settlements are incredibly skewed in London, and pre-nuptials offer little protection. The situation is so bad that a divorce lawyer, Jeremy Levinson, gives this advice, "Don't get married. If you must, make sure your other half is as rich as you are.''

Goldsmith Comment: As if I needed another reason.

 Billionaire investor Carl Icahn warns that the U.S. economy is extremely vulnerable to a drop in the dollar. He claims that the ever-increasing earnings of U.S. corporations are inflated because companies can buy cheap goods abroad. A drop in the value of the dollar could cause corporate earnings to "really blow up." Icahn is not a good man to bet against. His investment vehicle, American Real Estate Partners (ACP), is an Extreme Value pick and No. 1 on the S&A Top 10, returning 455%.

 It's a bull market... New highs: Consolidated Tomoka (CTO), American Capital (ACAS), Ares Capital (ARCC), Allegheny (ATI), Convergys (CVG), JP Morgan (JPM), Oakley (OO), Posco Steel (PKX), Silver Standard (SSRI), Van Kampen Muni Trust (VKQ), Plum Creek Timber (PCL), Southern Copper (PCU), PowerShares Pharma (PJP).

 China's 2006 growth beat estimates, with GDP expanding 10.7%. This is the fastest rise for China in 11 years.

 Now that Porter's computer is broken, you can really lay into him... he won't be able to respond for at least three days. Send your comments, as always, to feedback@stansberryresearch.com.

 "Just wanted you all to know that through your picks I was able to move on to live in the beautiful Galapagos island of Isla De Santa Cruz. Come on fishing with us! DF Adventure SA" – Anonymous

 "Years back, when I was holding a conference, my research director used this one: 'That's like barking up a dead horse.' We all got a laugh and I told him that the correct metaphor was 'Barking up a dead horse's ass.'" – Subscriber Floyd Wilson

 "Years ago when I was an engineer in Silicon Valley, the VP of Engineering had recently been fired by the CEO. The temporary replacement was a young man named Dave Bodenheimer. Shortly after stepping up to temporary VP, he had to lead a 'show-and-tell' for a major potential customer. Dave, shaky, nervous, way too inexperienced to be put in the position he was in, tried to lighten the mood: He quipped, 'That's like being caught between a hot rock and a snake oil salesman.' We didn't get the contract." – Subscriber Tim Richardson

Goldsmith Comment: We got a lot of submissions about mixed metaphors and damnations for Porter's use of them. My personal favorite was said by Lee Cooke, former mayor of Austin, on negotiating: "I wanted to have all my ducks in a row so if we did get into a posture we could pretty much slam dunk this thing and put it to bed."

 "Regarding 24 Jan. comments, is it true you answer only commonly asked questions? So, therefore, I should only invest as the masses do? I should be dumb like a liberal? Should I not ask questions about your interpretive uptake on the questions other fellow subscribers ask? Come on, you allowed Jeff's brother – Brian Clark – (maybe son?) to give a plug for him and not call him on it? Are you still drinking Miller [Lite] out on the golf course?" – Subscriber Steve Thomas

Goldsmith Comment: We answer questions that will help a number of subscribers, Brian Clark has no relation to Jeff, and Porter is drinking Miller Lite on a boat, not the golf course.

 "Well, Porter, now you've gone and done it. You should have kept your big mouth shut about your beliefs regarding global warming. So you don't believe global warming is a fact? Even a man of the stunning, incomprehensible ignorance of George W. Bush has finally figured out it is for real. I suppose you don't believe in evolution, either. I suppose you believe the entire universe was created 7,000 years ago. And we never went to the moon. How can we have any faith in your market analyses when you have opened your big fat mouth and proven how totally ignorant you are? And, by the way, there is plenty of money to be made in the fight against global warming. Wake up and smell the sulphur dioxide." – Subscriber Frederick Mitchell

 "Come on, Porter, I don't always agree with everything you say, but this one is out of line. There is absolutely NO debate in the scientific community regarding global warming and its causes. It is happening and at a very rapid rate. Why don't you stop the unfounded political banter and start recommending some good stock plays so we can profit from the so-called mania. I'm waiting..." – Subscriber Andrew Sexton

Goldsmith Comment: I can't defend Porter's rants on global warming; he'll have to do that when he gets home. I usually keep my opinion to myself when Porter brings up politics. You have all seen how futile it is to argue with him via e-mail; now imagine if he was sitting across the office from you. But in this case, I have to say I completely agree with our readers.

When I moved up to Baltimore from balmy Augusta, Georgia, my fellow Southerners warned me of the "horrible winters" to come. I packed my closet full of winter coats, mostly new, to face the cold winter head-on.

So I was somewhat disappointed when I arrived to see sunshine and t-shirts. Until probably last week, you could still wear shorts outside. I have no scientific evidence to back my views, but I am publishing a theorem that I have been working on for the past few months: shorts+flip-flops+January+Baltimore = Global Warming.

Good investing,

Sean Goldsmith

Baltimore, Maryland

January 25, 2007

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