Top Stocks For 2011, Top Stocks To Buy, Best Stock Investments For 2011, Hot Stocks For 2011

A Brief Introduction from Eric Fry...

The last time I saw Daniel Loeb, I was riding in his private jet from Miami to New Jersey. Danny is a fascinating guy - a California surf rat turned New York hedge fund manager.

In other words, he's not your run-of-the-mill financial type. He came into the business through the backdoor and succeeded on the strength of his talents, wits and determination. He manages $3.4 billion in his hedge fund named Third Point Partners L.P. (For those folks who do not surf or who have never visited the beaches of Southern California, "Third Point" is the most distant of the three main surf breaks in Malibu).

Danny has done very well for himself, but only because he has done very well for his clients. Making money is all his clients really care about. But how he makes money is all that any of the rest of us really cares about. Danny is an "activist investor," which means that he attempts to influence the results of his investments, rather than passively buying shares of a given stock and hoping for the best.

Often, the actions of this activist investor upset the status quo - annoying those who happen to reside in the crosshairs of his activism. Thus, for example, when Danny found fault with the CEO of Star Gas Partners a few years back, he made his thoughts public...very public. Danny wrote:

You know they have to be thinking about it...

Well, if we could just shift to production... It's jolly well sealed at the top, after all.

Do the math and it's easy to see why.

Let's say BP could get 60,000 bpd from Macondo. That's $1.75 billion in annual revenue (assuming $80/barrel oil).

If the field lasts five years, that'd go a long way toward paying for BP's Macondo expenses — costs which are not anywhere near being totaled, by the way. These lawsuits and fines will drag out for years (though hopefully not a decade).

And that 60,000 bpd figure is conservative. The nearby Thunderhorse field peaked at around 250,000 bpd in 2009. Those production numbers are spread out among multiple rigs, of course.

If we estimate that Macondo prospect could produce 180k bpd, that's $5.25 billion in revenue per year. That's more than halfway to restoring BP's previous annual $10b/year dividend. And BP has already said it "may" drill into the reservoir again at some point in the future.

Diane Cunningham of Colorado Springs, Colo., no longer has a flat-screen television. She decided to sell it... so she could buy a shotgun.

Colorado Springs shut off a third of its streetlights this past winter, The New York Times reports, in order to save $12 million on electricity. Shortly thereafter, a chain of events convinced Ms. Cunningham she needed to be armed.

"Her tires were slashed, she said. Her car was broken into. Strange men showed up on her porch. Her neighborhood had grown deserted at night..."

Meanwhile, in East St. Louis, Mo., Reverend Joseph Tracy is convinced guns are the problem. (Guns in the hands of criminals, that is.)

Every year, I go to the Agora Financial Investment Symposium in Vancouver, both as speaker and attendee. It's jampacked with people from all over the world who gather at the Fairmont Hotel to share ideas. As soon as I walk into that grand old railway hotel, I know there will be some surprises. This year was no different.

Ideas were not in short supply, but some ideas were more common than others. More than a few speakers spoke well of gold and oil. Most had dim views of the economy and the hot stock market of 2011. And there were at least a handful whose best ideas hailed from some emerging market.

A couple of my favorite ideas came from investors based in Dubai and Moscow. Whole markets rarely go on sale, but here we have two examples of hot stock markets trading for about 6 times earnings.

Peter Cooper is our man in Dubai, as you may remember, and a friend of mine. From his perch in Dubai, he writes an interesting investing newsletter called ArabianMoney. He is also a self-made millionaire who made it in the Middle East. He sold out near the top. But now, Peter says Dubai is a buy again. In fact, Peter says, the whole United Arab Emirates is a buy.

Inviting a little bit of government policy to interact with private enterprise is like inviting a little family of rats to interact with a bakery. Before long, you've got more rat droppings than chocolate sprinkles atop your cupcakes. And that's just the beginning...

Every day, the rats are more numerous, more rotund...and more brazen. Every day, fewer baked goods make it from the oven to the display case. Eventually, the baker is in business to feed the rats...and there is nothing he can really do about it.

Feeding rats is expensive.