Grant endorses one of Ferris' long-time picks... OPM=stupid decisions... Mr. Biggs buys the farm... Hooray for Dan... "Get over yourself"...

Jim Grant, the most eloquent commentator on finance in this generation, recently noted the charms of one of Dan Ferris' long-recommended stocks, Potlatch (PCH). Stripped of non-timber assets, Potlatch's stock price values its timberland at only $344 per acre. Compared to similar timber investments – $485 for Plum Creek and $783 for Rayonier – it's probably the most attractive pure play on timber in the U.S.

Swiss bank UBS today announced a record fourth-quarter net loss of $11.4 billion – almost double analyst estimates. UBS wrote down $14 billion in subprime-backed assets. The loss is not only a record for UBS, but it represents the worst loss ever reported by a U.S. bank. When the history of this period is finally written, no one will believe so many smart people made so many clearly dumb decisions. The explanation? For centuries, investment banks were partnerships. A bank's partners put their own capital at risk. Now banks are "playing" with the public's money. Nothing encourages stupidity like other people's money.

Famed investor Barton Biggs has some interesting advice for investors... buy a remote farm and stock it with "seed, fertilizer, canned food, wine, medicine, clothes, etc." And make sure you have guns handy... "A few rounds over the approaching brigands' heads would probably be a compelling persuader that there are easier farms to pillage." His new book, Wealth, War & Wisdom, urges investors to learn from history and prepare for the worst. You can buy a copy here.

We might be in a recession, but that's not stopping Super Bowl advertising. Fox just sold its last 30-second spot for the February 3 Super Bowl – the earliest it has ever sold the game out. Many of the ads were selling for $3 million, above the record $2.5 million average set in 2006.

Our resident resource expert, Matt Badiali, just finalized his long-awaited "L-2 Indicator." Matt has been using and perfecting this indicator to make huge returns in tiny gold exploration stocks. Matt applied his indicator to 13 companies over the past few months. All 13 companies gained. The smallest gain was 43%. The biggest was more than 8,800%.

Matt has been watching his favorite gold exploration stock for more than a year, and the indicator is currently screaming "buy." Matt has prepared a report on this stock and will release it after market close tomorrow to a select group of subscribers. Subscribers will also have the chance to talk with the company's management on a private conference call.

New highs: none.

In the mailbag... The readers prefer Dan Ferris. Overwhelmingly. And me? I'm just a "whiny prick." We promise to read what you send us: feedback@stansberryreserach.com.

"Let Dan Ferris write The Digest from now on. Nothing against you Porter, just that Dan made me laugh out loud several times while reading it today. I'm not sure if it was just so funny, or if I was laughing to keep from crying." – Paid-up subscriber David

"Porter, perhaps no one ever told you that being a whiny prick is not a redeeming human characteristic. I think we can all agree that the IRS is a group of first-class criminals of the highest order, but the amount of incessant bitching and moaning that you do would lead one to think you were the only person who ever had to pay taxes. I fall within the higher end of the 28% bracket, which I guess in your eyes makes me a deadbeat and means I'm getting a 'free lunch' as you call it, courtesy of you. Maybe you'd like it if everyone in a lower tax bracket than you were made to pay you a tribute tax or knelt down and kissed your feet or a better idea would be maybe you should just get over yourself." – Paid-up subscriber Brian Humphrey

Porter comment: There was once an idea that led to a great nation. At the core of the idea was that all men should be equal before the law and that their government should be strictly limited, in order to allow liberty to flourish. Our government has become a complete perversion of these ideals. This abuse is perhaps most clearly delineated by our progressive income taxes. The many are allowed to tax away the property of a select few. This is a recipe for tyranny. I was drawn to comment on these matters, yet again, because our government has moved yet another step further along this path with its "tax rebates." Here we see income being redistributed directly and property being given even to citizens who do not pay income taxes at all. I hope it's evident to most of our readers that my concerns about these matters aren't about my tax bill, but about the complete betrayal of our traditional American ethics. Welcome to Amerika, komrade.

"Who do I use to buy the gold coins?" – Paid-up subscriber Scott Runnels

Porter comment: Beats me. Who do you use? If you were buying plain bullion coins, I'd recommend using Bert Blumert at Camino Coin. He's a legendary gold bug, a fair dealer, and a big supporter of libertarian causes. If you were buying rare coins, I'd recommend Van Simmons of David Hall Rare Coins, who is both the most honest and knowledgeable dealer of rare coins in the world. For their contact information, click here.

"I've been in business for 25 years now (My business is aerospace, aircraft, and military-related parts and equipment: nuts, bolts, washers, screws, seals, gaskets etc.. holding the world together.) In October 2006, we were the slowest we've ever been in the 25 years. I have noticed over that time, my order book tends to lead the rest of the world by about 6 to 9 months... consequently, let's see if history shows a low in the August 2007 timeframe? This December, my order booked made a marked uptick... perhaps just an aberration but no... January 2008 is going gangbusters. If the indicator holds true look for a market rally come late summer/fall. I'm confident enough to be backing up the truck starting now." – Paid-up subscriber G. Mills

"Apparently my 1/19 e-mail to feedback did not merit a reply?" – Paid-up subscriber Michael Force

Porter comment: Well, we don't mean to be rude, but with thousands of subscribers, we can only promise to read all of the e-mails we receive. Even that takes a lot of time. Additionally, legal restrictions would prevent us from saying anything useful to you via a private e-mail. And frankly, we don't recall what you wrote about earlier... reminding us would have been a big help.

Regards,

Porter Stansberry
Baltimore, Maryland
January 30, 2008                                                                  

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