By Sean Goldsmith in the S&A Digest:

We start today's edition with this Reuters dispatch...

NEW YORK, May 26 (Reuters) – Former car czar Steve Rattner on Wednesday defended the administration of President Barack Obama before an audience of wealthy investors, one of whom booed his remark that U.S. income inequality must be addressed... "I hope that was a joke," Rattner said.

The audience was the crowd at Ira Sohn's annual investment conference. In addition to presentations from several of the world's best investors, the crowd was treated to Rattner's big-government blather on America's need for higher taxes, more government programs, more handouts, and more wealth "redistribution" (which folks in the real world call "theft").

The booer was none other than S&A founder Porter Stansberry. The article fails to mention Porter's response... "No... You're a joke!"

Porter also got a mention in this Barron's article.

The conference, a benefit for pediatric cancer, attracted 1,300 investors. Half of them applauded Porter's outburst. Rattner was stunned. His entire speech was Democratic propaganda. (Before you accuse us of being right-wing zealots, we're not... We would boo anyone who tried to make the case that income inequality is a problem the government has the constitutional ability to solve.) Rattner, whom OBAMA! tapped to orchestrate the auto bailouts, said everything the administration did was right – from handing over hundreds of billions of dollars in taxpayer money to fleecing the bondholders of the automakers. Then, he presented a chart showing a group of Americans are getting richer and said we need to address "income disparity." That's when Porter popped...

The other letdown of the conference, this one lacking comic relief, was Sam Zell. The real estate billionaire arrived late to the conference and used his time to explain the yearend gifts he gives friends and associates. Instead of a calendar or fruit basket, Zell attempts to show "where his head is at the moment" through elaborate music boxes with original songs. Zell then played a video of his latest music box, "Survival of the Fittest." The video was accompanied by a song called "Charlie, Charlie Darwin" to the tune of "Davy Crocket." The message to businesses – adapt or die. Once the video ended, Zell told the audience "He who adapts, succeeds," then left. He didn't once address his expertise, commercial real estate.

Despite those disappointments, the speakers were top notch. Renowned hedge-fund managers David Einhorn, Seth Klarman, Bill Ackman, Jeremy Grantham, David Tepper, and Steve Eisman (the hedge-fund manager immortalized in Michael Lewis' The Big Short) all presented. Several discussed the currency crisis, government foul-ups, and why you should own gold.

One fund manager, Daniel Arbess from Perella Weinberg, gave a presentation that could have come straight from one of our newsletters. Arbess said buying gold isn't a hedge against inflation... It's just that the value of the paper we use to buy gold is going down. And he recommended we buy it while "it's still legal."

David Einhorn, famous for his short sale of Lehman Brothers (which he unveiled at a past Ira Sohn Conference), gave a speech titled "Good News for our Grandchildren." The good news is our grandchildren won't have to deal with the debt bubble currently inflating in the world... Our generation does.

Einhorn posed two important questions, which we've asked many times in these pages... How long will capital markets continue funding bankrupt sovereigns and how long can these sovereigns continue printing money? Einhorn agrees with us that government inflation numbers are wrong... They reflect "out-of-pocket expenses" and do not properly weigh health care or include rising taxes. Einhorn said he's still short the rating agencies. He also gave the name of a largely unknown mining company with huge reserves in Africa. We can't disclose it here.

My favorite presentation came from Eisman. One of the first hedge-fund managers to identify the subprime mortgage bubble, Eisman told the audience he never thought he'd encounter another industry as morally bankrupt as subprime... but he has.

In a speech he titled "Subprime Goes to College," Eisman said he's shorting for-profit educators (another topic we've covered in the Digest). To sum up his presentation, these educators exist on government grants, but have far higher margins than other government-funded companies (higher than even Apple)... Those margins will decline. Also, these colleges charge high tuitions and deliver little value. The dropout rate is 50%-100%. One fun fact from the presentations... These colleges send recruiters into casinos and homeless shelters (seriously). [In an article titled "Hedge Fund Managers Make Fresh Calls," the WSJ manages to flub Eisman's title, reporting it as "For-Profit Goes to College."]

Our assessment of the conference? The world's best investors aren't telling us anything we don't already know... And we know a lot more than most of them. Sure, these guys get more press because they manage tens of billions of dollars, but we're dispersing the same information. This realization was both exciting and disappointing. Exciting because the information we provide is on par with the best investors in the world. Disappointing for the same reason... When you're already sharing ideas with the best in the business, where do you go from there? Regardless, it's great news for you... We charge $99 a year for our research. These managers charge 2% of assets and 20% of the gains.

Crux Note: To learn more about Stansberry Research's flagship advisory, the S&A Investment Advisory, click here.

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