THE S&A DIGEST

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

As of 07/05/2013

A mailman with a gun… Fannon on biotech, on fire… Why chose the S&A Alliance… How to pronounce "Sjuggerud"… Galland’s new project in Argentina… A get-well message…

"Only one more day of deer season… I’ll be back over there on Saturday."

Tommy the mailman was pointing to the big field beyond my house, behind my barns. "Yeah, I’m going for that big ‘un. I know you’ve seen ‘im back up there. Ya, I know you’ve seen ‘im. He’s a monster, twice as big as tha rest of ‘em…"

Tommy, who always smells of beer, even at 10 in the morning will be in the fields behind my house with a loaded rifle on Saturday. Mmmnnn…

"Well, have a good time, Tommy. I don’t think me and Andrea will be home…"

"Where ya goin’?"

"I’m not sure…"

Crucell, Rob Fannon’s first recommendation to our subscribers, has been awarded an additional $20 million contract for its Quinvaxem pediatric vaccine. This is in addition to the $230 million worth of contracts awarded to Crucell on December 1 for its Quinvaxem and Hepavax-Gene pediatric vaccines. Thus, Crucell, a start-up medical technology company will have minimum revenues of $250 million though 2009. That explains the 250%-plus return Rob’s subscribers have made since early 2004 on Crucell.

Now I know what you’re thinking… "Sure, write about the pick that went up. But biotech is the hardest sector in the stock market to make money in because it’s so volatile and so hard to understand..." Yes, that’s right. But I’m not cherry-picking. Besides Crucell, here are the results of all of Rob’s other picks, since the inception of Phase 1 in January 2006:

Stock #1: 62.03%

Stock #2: 200.70%

Stock #3: 25.00%

Stock #4: 12.14%

Stock #5: 43.12%

Stock #6: -13.37%

Stock #7: 30.98%

Stock #8: 12.41%

Stock #9: 1.88%

Rob is certainly the best biotech analyst in the newsletter business.

David Galland was in town last night. Galland is something of a legend in our business. He’s one of those people who breezes through life and everything he touches turns to gold. He helped Jim Blanchard get his conference business going great guns. Today, that meeting is our industry’s biggest get-together (the New Orleans Investment Conference). Galland was also a founder of Everbank, one of the most successful "online" banks.

Today, he’s running Doug Casey’s newsletter business. More interestingly, he’s also developing a vineyard/golf community for global investors in Cafayate, Argentina, which is one of my favorite places in the world. He’s recently hired a very experienced developer who just completed the redevelopment of Stowe, Vermont, for the global insurer AIG. From the sound of things, the new Cafayate deal is going to be a first-class project. There are big, deep pockets behind it. And, thanks to our close ties to Casey and Galland… we should be able to get you involved on the ground floor, if you’re interested in having a beautiful second home in a very safe, very beautiful, and very undeveloped place. More about this later…

One more thing about dinner… We had a fantastic red blend from Portugal – Xisto. Portugal is, of course, renowned for its sweet dessert wine, port. But this was elegant, dry… more like a big, fruit-forward Italian or Spanish wine.

New Highs: Akamai (AKAM), Disney (DIS), Coca-Cola (KO), Ares Capital (ARCC), Tejon Ranch (TRC), Xcel Energy (XEL).

Lots of good mail today… including a timely question about the S&A Alliance... and a question about Steve Sjuggerud that’s probably on everyone’s mind. Please send your editorial inquiries, your comments, and your complaints here: feedback@stansberryresearch.com.

"I have received a very attractive offer from Mr. Wiggin, expiring Jan 2. (It includes legacy rights). I have read you say that he may be your hardest competitor. What do you think of it? Do you have an equivalent in an Alliance membership right now?" – Paid-up subscriber Francisco Lizana Ballve

Porter Comment: Yes, indeed we do. From time to time we open up membership into our most elite group of subscribers – the S&A Alliance. These people, who make up less than 5% of our entire subscriber base, get an infinity subscription to everything we publish – and everything we decide to publish in the future. (Only Phase 1, which is a conference-call service, is excluded). For about the cost of what you’d pay to subscribe to everything for one year, you can get all we publish for as long as we’re publishing.

There are two unique benefits of our offer…

First, only members of the S&A Alliance receive our quarterly S&A 16 Model Portfolio. This is a balanced portfolio (value, growth, income, macro) chosen from all of the stocks we have under coverage. This allows you to see how we would build a portfolio, choosing from all of the advisories we publish. I know several millionaires who manage their portfolios using the S&A 16. They don’t even bother reading the letters anymore. (The new S&A 16 Model Portfolio will be out in early January.)

Two, S&A Alliance members are invited to a special, private annual meeting. Last year, we hosted it at the St. Regis in Aspen. Mohnish Pabrai was the keynote speaker. He’s widely heralded as the next Warren Buffett. His private partnership has earned 28% a year compounded returns since inception, making Mohnish and his partners very rich. Pabrai invited our Alliance members to join his investment partnership, and I know several did so. We give the S&A Alliance members these kinds of connections… and other special deals as they come along.

I just bought your service and have been reading as fast as I can. First, I bought Steve’s report and then turned it in for yours, so to speak… I need to make about 10 or 12%, growth or dividends, at least, or sell the house. I paid for advice, at least I thought I did. Can you get me to something short and sweet to read and help me get on with it? I read all the stuff about you I could find and I’m asking you. Help." – Guy Asbury, "paid-up something"

Porter comment: Guy, I can’t give you any personal advice. There are laws against me doing so… and just as importantly, there’s no way I could advise you without knowing a lot more about you than I can learn in a short e-mail… or even a long e-mail. But, here’s what I tell any subscriber who asks me about how to "get on with it." First, start with our most conservative recommendations. Read Dan’s Extreme Value. Take my "no risk" recommendations (in PSIA). Read True Wealth and take Steve’s safe ideas. Get a few safe, successful investments under your belt before you start putting money into anything risky. Second, make sure you understand our position-sizing rules. We recommend you never put more than 4% of your portfolio into any single position (with very, very rare exceptions). And finally… don’t do anything with your savings that you’re not comfortable with or that you don’t understand.

"...been with you for three years now (PSIA, True Wealth, and Extreme Value) in each of three different accounts. My only question is: How do you pronounce Sjuggerud?" – Paid-up subscriber Warren Howard

Porter comment: Great question. Get that one a lot. If you pronounce it "sugar rude" you’ll be close enough.

"I live in Chile half the year and there are 3 levels of Santa Ema… Which was it you had?" – Paid-up subscriber Bill McKeen

Porter comment: The reserve. And I think I was drinking the 2002 vintage.

"I meant to write to Mr. Sjuggerud’s dad on his convalescence from hip surgery earlier, but somehow it didn’t happen… Please pass this along:

Dear Mr. Sjuggerud,

Since this note is coming at a later date than I originally planned, I and my family do hope that much of your healing is behind you.

If that is the case, then you are hopefully starting to walk, whereas probably if you didn’t have the surgery it would be more difficult for you.

We are rooting for a complete recovery for you, and hope that you will enjoy the holidays with your wonderful family. Best wishes for a very healthy 2007.

Sincerely,

Richard and Leonore Hansen"

Porter Comment: Consider it done. And Dave, you’ve been in our thoughts, too. Hope you’re feeling better.

Regards,

Porter

Cockeysville, Maryland

December 8, 2006

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