Weekend Edition
The Best of The S&A Digest
April 12, 2008
After 13 months of testing, we've finally launched our newest research service – The S&A FDA Report.
Our medical specialist and veteran trader, Dr. George Huang, created a breakthrough trading technique for exploiting approvable letters – a government-triggered phenomenon in the stock market. Based on his proprietary technique, you can actually learn when the potentially biggest trades of the year will happen, months in advance.
We're going public with Dr. Huang's new strategy in less than two weeks. In the meantime, we're offering our readers first dibs. And you only pay half price. To learn more, click here...
At last week's Jekyll Island meeting, our friend and fellow publisher Doug Casey made a convincing case for buying real estate in... Burma. Sure, a military junta is in power, but it won't be there forever. Meanwhile, Burma's beachfront land is every bit as pretty as Thailand's but it costs about a tenth as much. All you'd have to do is ingratiate yourself with the generals in power, something that shouldn't cost more than a few million dollars.
Doug also likes cattle land in Argentina and, along with partners, has recently purchased more than 250,000 acres in Salta.
The real estate meltdown hypothesis holds the economy will radically slow and sink into a recession (or even the worst depression since the Great Depression) as subprime losses lead to prime real estate defaults and then a decline in commercial real estate, too. I see two glaring problems with this hypothesis...
First, "Dr. Copper" hasn't gone along with the global recession predictions. Copper, and base metals in general, have remained strong, even hitting new highs. Second, the commercial real estate collapse doesn't seem to be materializing. In fact, after suffering late last year, several commercial real estate investment trusts seem to be rebounding strongly.
Our best commodity recommendation? Get long heroin. According to sources in Afghanistan, farmers there have replaced their traditional poppy crop with wheat. Inflation is looming – even for junkies. While we suspect we're a long way from a top in commodities in general, it does give us pause when wheat is a better cash crop than poppies...
I believe the trade of the next decade will be shorting long-dated U.S. government bonds...
With the amount of inflation the Fed is producing and with the global economy showing signs of strength (oil and copper prices), it's a sure bet the yield on the long-dated government bond will, sooner or later, spike much higher. Right now, yields on the 30-year Treasury bond are bouncing off their lows, at just over 4%. Considering inflation, as officially measured, is higher, there's simply no way these low rates are sustainable.
ConocoPhillips and BP are spending $25 billion to $30 billion to build a pipeline to carry Alaska's gas to Canada and the U.S. The pipeline will move about 4 billion cubic feet of gas per day. The first destination is the Alberta oilsands in Canada – the biggest proven reserves outside Saudi Arabia.
Alberta needs enormous amounts of natural gas to get oil out of the ground. Companies are currently pumping 825,000 barrels per day. That number is expected to quadruple by 2025.
George Soros, the billionaire you love to hate, told reporters the U.S. administration "failed to perform their job... This is a man-made crisis and it's made by this false belief that markets correct their own excesses. It will take much longer for the full effect of the decline in the housing market to be felt."
Soros sounds like he wants to ride the "government-has-to-do-something" bandwagon. When times get tough, the "public" will clamor for the government to "do something." Whatever it does, it won't be good.
What's Buffett buying now? Well, his most recently disclosed new position has been built up over the past six months. Buffett has bought a million shares of reinsurer Munich Re Group, according to a German newspaper report. Buffett bought 3% of Swiss Re in January.
Editor Sean Goldsmith recently headed up a project to uncover every company in the world that pays a monthly dividend. Then, he spent the last six months with the help of Sjuggerud, Dyson, and myself, to figure out a system that shows you which Monthly Dividend Payers will deliver you the biggest monthly checks. For example, one stock has sent out a check for 453 consecutive months. Another has returned 388% over the past five years, including a paycheck for shareholders, every single month.
For more details on Goldsmith's complete list of the Best Monthly Dividend Stocks... and his recent research, click here.
Regards,
Porter Stansberry and Dan Ferris
