Sjuggerud during his world tour... Yields up, the dollar to follow?... The top of the credit cycle – Blackstone goes public... Nokia's up 100%, time for Wall Street's upgrade... Global warming to blame for snowstorms in June... More rants on Soros...

The yield on the 10-year Treasury hit a five-year high, reaching 5.27% yesterday. We recall fondly... and with admiration... what our friend James Grant said about America's unusually low interest rates back in 2004, when the 10-year was yielding less than 4%: Never before has a currency untethered to gold or any other real asset, ever seen interest rates so low. Alas, what's too good to be true doesn't typically last.

As our managing editor, Brian Hunt, is quick to remind me, it doesn't pay to be bearish. But... I can't help suspecting assets that have been inflated by super-cheap credit might deflate a bit as credit is given out more selectively... and at a much higher price. For example... lead prices have grown 351% since 2000. Meanwhile, as dollars were being printed and distributed at low prices, the world didn't want them. But now?

Just got off the phone with Steve Sjuggerud. The poor man. He has been living on airplanes for the last six weeks, traveling to Hong Kong, Macau, London, Long Beach, Iceland... and on Saturday he leaves (with me) to go to Ireland. I'd wager that Sjug has seen – up close – more good investment ideas in the last six weeks than just about anyone else in the world. I had to know... what's the best idea you found? He told me two things...

"First, the U.S. dollar is mega, super cheap. The $45 cab ride from JFK to Manhattan seems free compared to what $45 buys in the rest of the world... $45 will only get you a few blocks in London or Iceland. It feels like the bottom for the dollar..."

"Second, the best overlooked asset in the world has to be the Icelandic long bond. Look, I love so many of the things I've seen lately... stamps, coins, Seabridge... but if you're a pension fund in Europe, there are Icelandic bonds that mature in 2044 and that pay a real 4.32% [meaning you add inflation on top of this yield]. If you want to match maturities to your obligations, this is the safest, highest-yielding choice in the world... these bonds are going to soar..."

Private-equity powerhouse Blackstone Group is set to go public the week of June 25. The offering will raise as much as $4.75 billion. New shareholders will hold a 12.2% stake, while the Chinese government will hold a 9.7% stake. Why would a successful business like Blackstone look to sell? See what famed short-seller Jim Chanos says here...

Our thoughts: Chief Executive Stephen Schwarzman and his partner Peter Peterson started this company in 1985 with $400,000. They've worked hard for 22 years. And they're no dummies. They've seen a top in the credit markets before... and this time they're cashing out.

Extreme Value pick SonicWALL (SNWL), a maker of network security devices, will buy privately held Aventail for $25 million in cash. The acquisition of Aventail, known for its "secure sockets layer virtual private network," will give SonicWALL the ability to allow more secure remote access to clients. Shares gained more than 3% today.

We wrote it, did you buy it?...

It is my job to find the best investments in the tech sector for you, and this is one of the best opportunities I've ever seen. People are simply missing this one – but they won't for long.

– Porter Stansberry's Investment Advisory, July 2004

People are finally starting to notice. Today, JPMorgan upped the European technology sector to overweight from neutral. In particular, the bank raised its rating of PSIA pick Nokia (NOK) to overweight, stating "it has more room to run." Readers have made 100% since the recommendation.

Succumbing to pressure from billionaire activist Carl Icahn, Inside Strategist pick WCI Communities (WCI) delayed its annual meeting. Analysts believe this move points to WCI's willingness to sell. As reported in these pages, WCI previously rejected Icahn's $22-a-share bid. This is the kind of situation we like to see. While readers are currently down on the pick, you can continue to hold these shares risk-free. The new bid will almost definitely be $22 a share, and you'll make money. Our kind of situation. Shares are up more than 2% on the news.

"IT SOUNDS TOO GOOD TO BE TRUE," says a Barron's story posted online recently. "Pay a reasonable price for an asset that delivers juicy, tax-deferred yields, in a sexy sector, with the possibility of skyrocketing price appreciation." They're talking about MLPs - master limited partnerships - that transport oil and gas across North America. Many have paid out dividends of 6% in the past year and appreciated about 30%. Kinder Morgan Energy Partners (KMP) is one of Barron's favorites... Matt Badiali wrote about it recently in his "American Oil Pension" report.

In the mailbag: Lots of unhappy customers. Please understand, dear subscribers, we don't actually desire to upset you; we don't pine for angry missives... but we do find them vastly more entertaining than praise. Additionally... no one ever improved his business because he received a compliment. And... sometimes you know you're right simply by what your enemies say about you. Send your outbursts to us. We promise to read them: feedback@stansberryresearch.com.

"Nothing burns me more than to see something advertised as free, only to discover that it is only free IF you purchase something else. I believe that this is called 'entrapment.' Just how legal is this??? I believe 'suckers beware' would be more accurate." – Paid-up subscriber Jim Dixon

Porter comment: Oh, good gracious. You can't be serious. My father taught me when I was five years old that nothing in this life was free. Were you an orphan? We give "free" reports away to encourage your subscription – everyone knows that.

"With regard to your comments about global warming and the 'ironic' June 7 frost in Denver, if you'd ever bother to read about global warming you'd know that those out-of-season cold snaps are actually the RESULT of global warming... You say that the Earth's climate is too complex to understand so we should not bother trying to figure it out. Do you say the same about cancer? Alzheimer's? MS, or any other substantially complex problem vexing mankind?" – Paid-up subscriber Larry Poquette

Porter comment: Boy, do I wish I were in the business of selling "global warming." What could be easier? It's like a religion: It's all based on faith. And if you believe, then even an incredible snowstorm – in June – is simply more evidence that the world is getting warmer! The difference, by the way, between global climate studies and something like cancer is simple: the scientific method. Tell me, how would you establish a double-blind control group for an experiment on the world's climate?

"[Regarding Extreme Value] I've read that women make better investors since they tend to gravitate to value investments, which outperform the riskier investments men opt for. In recognition of this, perhaps you should market Dan's services to women. In order to do this perhaps he should take a female pseudonym." – Paid-up subscriber Mark Caines

Porter comment: So, you're saying Dan could be the newsletter world's version of Tootsie? I remember about 10 years ago, one of my peers thought it would be fun to write under the guise of a young woman's identity. He launched a newsletter featuring recommendations from an alluring young Chinese refugee – Miss Wong, I believe it was. Her picture was on the envelope. She'd run away from the communists, it said. She'd barely made it to Hong Kong alive. He went on and on. Strangely... Miss Wong never showed up at conferences. On my many trips to Hong Kong, I never met her. And a few months after the letter started, it was mysteriously folded.

"You may want to pass on the following info in case any of your readers don't realize our democracy is a sham. Ron Paul has been slaughtering the competition in the repub debates - yet most folks still don't know who he is. Here are 3 links to poll results of folks who watched the debates: ABC poll, MSNBC poll, CNN poll. And yet all the pundits are only talking about Giuliani, McCain and Romney! I guess this is our oh-so-thin democracy in action!"
– Paid-up subscriber Ed

Porter comment: We don't recommend you vote. It only encourages them. But... we enjoy watching Ron Paul throw a wrench into the giant marketing machine that is modern politics by asking simple questions and giving simple (honest) answers. It's much harder to sell a piece of crap used car when you've got an honest mechanic standing right next to the salesman.

"Frankly Porter, I think that you are going to have to eat your grilled chicken in a GM SUV. You will be proven wrong. Soon, I'll be selling lots in the West Lagoon in Belize, and I am willing to wait two years to prove you wrong about GM. I am willing to wager two lots to every lot you will "brave" at Rancho Santana that GM will be around two years from now without going bankrupt. Do you have the balls to play this game? Put your mouth on base!" – Paid-up subscriber Val Crick

Porter comment: Mmmn... I don't know if GM will be bankrupt in two years or four years. But I think investors will make a lot more money short the stock than long it. And that's all I have to know. Good luck with your project in Belize – It's a wonderful country.

"I enjoyed your interview of George Soros. Found it fascinating. Thank you for publishing it, regardless of what 'some' think or say. I dislike for politics and most politicians; I will not vote for Hillary; and I am very far from what is now considered 'left.' And I loved your mom writing in to defend you. YES!"
- Paid-up subscriber Gail Summer

"I rather like George Soros. I think he did great things for the world by promoting an 'Open Society' with free flowing information in countries that had penalized free communication for years. He used his money to open up the world with scholarships and things as simple (but revolutionary in the right place) as copy machines. Aside from that he is one of the greatest investors of our time." – Paid-up subscriber Severin Schurger

"George Soros is a Far-Left leaning political activist whose promotion of the homosexual agenda around the world is destroying traditional non threatening to family-based societies values which I consider to be under my influence and is my responsibility, and not, by some illogical transference, any person who may happen to have different ideas than I do. In fact, I am a subscriber specifically to read ideas that differ from my own. If you consider him a role model, I cannot trust your judgment. Please take me off your list." then I would be surprised. However, if you consider him to be broadly and deeply qualified to comment on things financial, then you and I would agree. Incidentally, does he barbecue? I applaud your choice of Mr. Soros as a source for our edification." - Paid-up subscriber Gary Davis

"I want to give a plug for your customer service. I read the feedback and don't hear much about those people behind the scenes and behind the phones. They deserve some praise!! I've called them more than a few times, and they have always been courteous and helpful. One in particular was Joanna, she was very nice. You offer a lot of letters and the offers to subscribe are always enticing, but you also include a guarantee if we are not happy, you'll refund our money. What more can people ask!! I called for a refund for one that I tried for a few months, that just wasn't for me.  I got Joanna, and she was great!! She asked me if there was a particular reason, and then said "sure, no problem"!! Keep up making us money and treat your customer service people well, for without happy customers, a business cannot stay in business"
– Paid-up subscriber Steve F.

Porter comment: We've warned Joanna about actually giving refunds... she doesn't seem to understand that it's really just a marketing ploy... I'm kidding, of course. Hiring excellent customer service people is one of the most difficult parts of our business. About 18 months ago we brought in a new customer service manager, Lance James. Ever since, things upstairs have gotten better and better. Thank you very much for the compliment. I'll pass it on to Lance and his team.

"I recently joined the S&A Alliance, as I always like to have it all. I started out with subscriptions to just the Dividend Grabber and the Oil Report, but I wanted access to all your research; hence, I took the plunge. I'm still in my money-back guarantee period, so the jury is still out as to whether I'll continue. However, when I read things like Jeff Clark's, "I don't have a new recommendation for you today," (6/11/07 Short Report), I have to be impressed by the honesty of your staff. The balance is tipping more and more towards keeping my membership." - Paid-up subscriber R. Sweeney

Porter comment: If there's one thing I can promise we'll always be, it's honest.

"Porter, I see I got your mom all stirred up. Believe me I don't want to tangle with that lady. Since she survived your youth, I wouldn't have a chance. While personally you aren't my cup of tea and I would probably have been rooting for the sharks you mentioned, happily there are other considerations. I abhor can't and con. You have no truck with that sort of garbage. Also for me your comments on Soros and Daly are right on. You have a nose for good sense and quality no matter what the source. While you are cross-grained and ornery, you have a keen intelligence and can't be bought. So Mom don't be too hard on me." – Paid-up subscriber Stan Ragle

Porter comment: Stan... you're not telling my mom anything she doesn't already know. She won't be mad.

"Uh oh... Mom coming to the defense of her (big) little boy who's under attack. If that doesn't bring some simple-minded, immature vitriol to the mailbag then nothing will. Well done, Mrs. S. Mine would do the same." - Paid-up subscriber Pat Thompson

"Why do you disclose most of your newsletters' picks through the Digest? Especially disclosing Dan's picks is just insane... If you have any respect for the paying customers of Extreme Value, you wouldn't do that. Everyone who reads any of your publications, including the Digest, knows that Dan is a long-term investor. And you keep mentioning all his picks with name and it is easy for someone to just get most of the names - like HD, MOT, MSFT, WMT. I got into all of those without subscribing to Extreme Value. Thanks to the openness of the forums, I now know exactly what Extreme value rec price was and I got in around the same price or lower than what Extreme Value subscribers got in at... It may be okay to mention names that are not in the Buy range, but most of that you mention in the Digest are well in the buy range. Are you trying to see if by disclosing that it is Dan's pick, many Digest readers would get onboard and drive up the prices??? I hope not." – Paid-up subscriber J

Porter comment: You think we're giving too much away... but that's only because you're not reading Dan's letter. Besides, as I often remind our advertising writers, knowing the name of the recommendation doesn't give much away. Anyone who could afford to subscribe to Extreme Value is going to want to know a whole lot more than just the stock symbol – especially if they're going to invest a large amount of money. Paying $1,000 for knowledge and for follow-up on a $100,000 investment is cheap.

"For what it is worth, you may have slightly better luck with doctors if you talk with one who had a life before they went to medical school. I think it has something to do with understanding the difference between who you are as a person and what you do for a living, career, avocation, etc." - Paid-up subscriber Steve

Porter comment: Yes, that's true. Take my friend (and our contributor) Dr. David Eifrig. He made his first fortune as a derivates trader working for Goldman Sachs, Chase, and Yamaichi. Then he went to med school. You'll never meet a more humble man. Winning at two of the most competitive fields in all of human endeavors makes it easy to be gracious to others.

"This has nothing to do with investments, just about charcoal grilling/cooking. A long time ago while living in England, we decided to invite some locals over for an American Thanksgiving dinner. Came time to pop the turkey in the oven when we realized the Brit ovens were too small to accommodate a 10-lb turkey. I vaguely remembered the Weber manual saying you could do the indirect method of cooking for a turkey, so under duress we gave it a go. Long story short, fire up the grill for indirect cooking, put a roaster pan of water between the pile of coals, slice some onions, mash up some herbs (e.g. rosemary or anything else you want) and toss in the pan. Get one or two oranges (whatever will fit in the cavity of the bird), roll oranges well on a hard surface, stab well all around with a fork, stuff the oranges in the cavity and then on to the grill, basting periodically and adding more coals for whatever time it takes to get the temperature to preferred range (butterball pop-up temp sensor makes it easy; the 10-pounder took about 3hr 30 min). The bird ends up well-crisped, smoky, and extremely flavorful and moist throughout. Worked so well we've been doing turkey that way even after coming back home to the land of normal-sized ovens." – Paid-up subscriber ARM

Porter comment: I'm a bit of a Weber kettle freak... there's pretty much nothing I don't think I can cook on a Weber. We have a brand new, beautiful gas grill that sits underneath a nice porch – out of the weather. But... even when it's raining... you'll find me out in the backyard, working on the Weber. I like the process... the rhythm of the cooking... and the romance of it. In fact, I just bought one of those big Weber ranch kettles... so I can cook on it even more often.

"I can't tell if y'all are fer or agin poke. The tender leaves from the pokeweed are tasty eating. I ate poke as a child and adult, too. London, Arkansas, which is the next town over from where I live, has a Poke Sallet Festival each Spring. It is held early when the new shoots full of tender leaves come up. Good stuff! You just have to remember to cook them once and pour off the water. Then cook them again. Of course, the London poke sallet (that is the correct way to spell and say it) glows in the dark because of the nuclear fueled electrical power generating plant situated there. (Just kidding. Or am I? Y'all come to the next poke sallet feast and see for yourself.)" – Paid-up subscriber Frank Foster

Good investing,

Porter Stansberry
Baltimore, Maryland
June 13, 2007

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