We're keeping The Digest short today. Porter, Brian Hunt, and I are in New Orleans attending the New Orleans Investment Conference. All of our friends are here... Van Simmons, Rick Rule, Matt Badiali, Steve Sjuggerud... Porter is preparing for his talk this afternoon, and I'm going to head back inside to hear a few more presentations. We'll pass on the pearls to you.

Overheard in New Orleans...

"Hollywood is moving to New Orleans... it's so cheap."

I was speaking with an honest-to-goodness movie star at the hotel bar yesterday, and he told me that Hollywood studios are filming more and more in New Orleans. He's down here working out the details for his latest film. The city is desperate for revenue, so it is happy letting these people invade the streets. Hollywood may not be as stupid as we thought... To give you an idea of the local situation, a healthy real estate market should take about five months to empty its home supply. New Orleans has a 10-month inventory of homes in the $300,000 range and a 23-month inventory for homes between $750,000 and $1 million.

Adrian Day, an English money manager and a mainstay at this conference for many years, made some interesting points in his speech this morning. For one, Adrian is bearish on the dollar. He said most foreign countries – including Kuwait, Russia, China, and Sweden – have 90% of their nondomestic holdings in the U.S. dollar and now they're dumping. It's simply imprudent to hold such nondiversified reserves. Adrian also believes U.S. markets are overvalued in terms of price to earnings and price to book. And the average dividend yield of the S&P is 1.85%, 47% lower than the historical average.

To combat the fall in the U.S., Adrian recommends looking to emerging markets, although many of those are overvalued as well. He likes Japan and Brazil, in particular. One stock he likes is Gafisa, a Brazilian real estate company in which Sam Zell is the largest shareholder.

Not much by way of the mailbag, but once again, someone has challenged our manhood. Give us your jabs here... feedback@stansberryresearch.com.

"On page 10, you show a list of securities and a column Total Return. It appears half of the figures are incorrect. Example, Vanguard Indexed Fund you show a total return of 42%. An increase of $1.14 should be 10.4%." – Paid-up subscriber Ellis Johnson

Goldsmith comment: Vanguard Indexed Fund pays large dividends, which are factored into the total return.

"Wow! I wonder what Street's letter said that brought on such a scathing response. I would hate to have Chapman as my boss. I wonder how many employees he cuts down or reduces to tears. On the flip side, I'm not one to espouse bathroom references, but this brought out a hearty guffaw. 'Dark orifice?' That's a different way of putting it." – Paid-up subscriber Great Grandma B

"You don't have the balls to do two choices per year. You're ego cannot let you. if you were that confident you would have only one choice to sell. Better that you spread your risk between letters so you can at least have one to brag about. Better to say 'we said it did you buy it' with numerous choices per month. It is about you looking good right? You don't have the balls, not even enough to publish this thought." – Paid-up subscriber Glenn

Goldsmith comment: Well, we've completed one part of your infantile challenge. The other will come soon. We hope to have you as a subscriber of Stansberry Focus.

Regards,

Sean Goldsmith
New Orleans, Louisiana
October 22, 2007

Stansberry & Associates Top 10 Open Recommendations

Stansberry & Associates Hall of Fame