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From the Ground in Miami

By Stansberry Research Interview Series
Monday, October 16, 2006

Here are my first thousand words:
 
 
Practically every other block in downtown Miami looks like this picture, taken through the sunroof of my car last Thursday.
 
I first noticed a dozen or so construction cranes while driving towards the city along its famous Cuban street, Calle Ocho, in the heart of Little Havana. However, by the time I had arrived in the city, that dozen or so had multiplied several times. It would be no exaggeration to say that there were 30 to 40 construction cranes within a mile of each other in downtown Miami.
 
Their purpose? Building condos.
 
The Miami condominium market is the hard evidence of the real estate boom. It’s a real estate craze that astounds beyond first impressions. For example, on first impression, you probably see three or four cranes in the above picture. There are actually six.
 
The city is besotted with concrete foundations in various stages of development. Only a handful of these would be complexes even have structural frames above a few stories. For the most part, foundations have been laid, and little else.
 
In the lower right hand corner of the image, you can barely see a bus stop. While sitting at the stoplight, I noticed an advertisement on the side of the terminal. It read, “Wanted: well built, tall companion.” It wasn’t referring to a dating service... it was an advertisement for Yovani Garcia’s condo real estate office.
 
I spoke with Yovani on Friday morning. I’ll tell you more about my trip and our conversation in part two of this essay on Wednesday. Until then...
 
Good investing,
 
Graham




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Market Notes
New highs in mortgage lending giants Fannie Mae and Redwood Trust confound the housing bears.
 
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In The News: record crude oil imports for China.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%