Volume IV, Issue 1/ January 2010

Welcome Letter

Sometimes it is hard to juggle the travel in search of unique and profitable lifestyle, investment and speculating opportunities with the ever looming end of the month deadline. The fact that I am rather unorganized and subscribe to the theory ¨If you wait to the last minute, it only takes a minute¨ only further exacerbates the problem. As a result, we often find ourselves in the oddest spots when trying to add some semblance of order to our consistently scattered thoughts.  So at this moment I am typing at a road side general store in a rural part of South America after bouncing around in my 1955 Landrover for the better part of two days looking at cattle operations.  This combined with a last minute trip to Peru has me typing while perched on a tree stump drinking a not cold enough cerveza. This is not a complaint…ok the beer temperature is a complaint but not the lack of time or the locale.  This is our kind of place.  We are now regulars here and even have a tab.

It is not that we don´t like luxury.  We do.  We like it a lot. That is why when we travel to certain places we seek out the most elegant and even decadent accommodations.  The Hotel Albergo, in Beirut, the Raid Fes in Fes Morocco, the Pausada Sao Tiago in Macau and the Connaught in Mayfair are all well worth the premium for the elegance and sophistication of the environs and the people that inhabit them.  The important part is indeed the people.  That´s why you rarely find us in the hotel with the best business center or gym and you never find us in a corporate hotel designed for business travelers.  Those are for the average salesman, consultant or loyalty point collector.  That is not us.  We would prefer to sleep under a tree or in a hammock than hang out with the average blackberry wielding, black nylon laptop bag crowd.  Are we snobs?  Yep. 

But we are snobs for authenticity and valuable experience. That is why this sump on which I am perched, as you can see from the pictures, is anything but luxurious yet is as comfortable as can be.  Julio, the proprietor, is as perplexed as can be by our appearance and several of the locals have stopped by on the pretense of buying sundries. We think they wanted to see the paleface Martians. Some locals pulled up a chair and chatted, shared the libation and brought this month´s deadline three hours closer. That´s ok.  Since plopping down here several hours ago we have learned that the largest landowner in the area is selling out to go back to Italy, the local school just won a national award and the new policeman fell asleep on duty last night and missed an opportunity to nab some contrabandos hauling car parts in from Brazil.  Perhaps more importantly, we got a better read on how the locals view the new government. Suspiciously.

So call us snobs if you choose but do so with the understanding that what we have sheer and utter distain for is not a lack of wealth or opulence, it is a lack of style, class and authenticity.  At the most visceral level we recoil at the superficial, glitzy and ostentatious.  Just as we would never wear square toed shoes with a suit (ok, we would never wear square toed shoes) or French cuffs without cufflinks, we eschew the hip and trendy for the time tested, classic and solid.  This philosophy extends to capital allocation.  Subscribers sometimes ask why we don´t recommend hot tech stocks or even the go go alternative energy shares.  Mostly it is because they are too popular and more than likely an ¨it stock¨ ; the capital market´s answer to Linsey Lohan.  It´s just not our style to buy into something already recognized as ¨it¨.  While we marvel at Apple´s new ipad and expect it to revolutionize written forms of communication and possibly the rest of the media industry we can´t buy Apple´s shares at today´s prices.  Nor do we recommend most commodities (except precious metals and agriculture) or the companies that produce them at today´s prices.  Prices are just too high and the masses are too sure that the trend will continue.  Given all the economic and political uncertainty, we prefer to wait.  So pull up a stump and have a cerveza while we wait.

In This Month´s Issue

It is time again for the portfolio review.  Since our last review we have trimmed the portfolio even further, locking in a 31% profit on AKO a 21% profit on KHD Humboldt, a 372% profit on WCC unless you bought on the alert in which case you were up more than 600% on Simon Black´s near perfect call.  We also cut our losses or got out even by selling TW depending on if you bought when we first recommended the shares or when we sent out the alert.  These transactions combined with shares we sold earlier in the year and the remaining open positions leaves the Without Borders portfolio with a 46% gain for 2009 and a 38% annual return since the newsletter´s inception in 2007.  Given how catastrophic most portfolios were in 2008 we are rather proud of these numbers.  How did we arrive at these numbers?  We calculated the returns by assuming that you are a US dollar investor and you bought an equal amount of each buy recommendation at the close the day following publication and sold at the close the day after a sell recommendation.  These returns to not include the two alerts and they do not include anything but firm buy or sell recommendations.  So casual musings like our call to hold US dollars four months ago are not factored in.

We will close out this month with a view Over The Horizon at the looming sovereign debt crisis and a probable US China confrontation where both will end up battered.

Next month we will bring you another Dispatch from China, this time from the capital of the energy industry where opportunities for multi generational wealth abound for those willing to brave the elements and preserve through tumultuous times.

A Couple of Housekeeping Items

After a frustrating start when our shorts were underwater and we could not find anything exciting to pound the table about, FLASH CABLE subscribers are finally feeling the joy and vindication as our shorts are now well into positive territory and our early stage micro cap opportunities are making demonstrative progress.  And we have a full pipeline of exciting opportunities including a private placement in a classic crisis investment situation and small resource company that we think will go ten to one in the next year.  While we know FLASH CABLE is not for everyone, it may just be for you.  Until now we have limited FLASH CABLE membership only to Without Borders subscribers but starting the first of March we are going to open it up to outsiders.  We have been holding off doing this so existing subscribers could get in before we hit the subscription cap.  There are less than 50 memberships remaining so if you are interested now is the time to try risk free  by clicking here.

We are also raising the price of a Without Borders subscription starting in March. As long as you remain a current subscriber this will not effect you so don´t let your subscription lapse.  Also now is the time to tell your friends and family to sign up.

Also,  several subscribers have put together an interesting land investment in Uruguay which consists or roughly 385  hectares of land only forty minutes from Punta del Este which has a productive olive operation and a processing mill.  While we are not involved we know and respect the people involved. They are open to new investors so if you are interested email us at info@withoutborders.com and we will put you in touch with them.

With that I think I will meander inside and ask Jose for another beer and some water for Mises.

EDITORS NOTE: This is the Welcome Letter to the current edition of our premium service.  To find out how we are profiting from today’s market and geopolitical opportunities you need only try our RISK FREE TRIAL SUBSCRIPTION and see if you are ready to live a life Without Borders.

Yours in Exploration,

Fitzroy McLean

Chief Bon Vivant and Speculator

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