Pocket Double-Digit Gains Without Shelling Out Big Bucks.............Page 4 THE OXFORD CLUB EXECUTIVE COMMITTEE JAMES BOXLEY COOKE Honorary Chairman Baltimore, Maryland JULIA GUTH GREAT PROFITS IN THE COMPANY OF GOOD FRIENDS Executive Director Club News Edition APRIL 15, 2006, VOLUME 19, NO. 7 ALEXANDER GREEN Investment Director MICHAEL WARD Editorial Director RUTH LYONS Member Recruitment Director Capture $4 Billion in Real BRIAN YORK Director of E-Commerce KRISTIN KEENEY & STEVEN KING Estate With the Help of ALEX Co-Directors,World Financial Meetings & Seminars KATE MURPHY Member Services Manager Dear Member, THE OXFORD INVESTMENT PANEL Last month at the 8th Annual Investment University Conference, I chal- MARY ANNE ADEN PAMELA ADEN lenged the attendees in my workshop to do two things when it comes to LOUIS BASS HORACIO MÁRQUEZ investing – two simple things that can do more than anything to ensure wealth in the markets: WEALTH PROTECTION ADVISORY PANEL ✔ Rule #1: Stick to what you know. ROBERT BAUMAN MICHAEL CHECKAN ✔ Rule #2: Always seek to buy undervalued assets. Louis Bass WAYNE LELAND Of course, I don’t begin to claim these seasoned gems of wisdom as my creation. For CANADIAN decades the likes of Benjamin Graham, Peter Lynch, John Templeton and Warren Buffett have INVESTMENT PANEL been telling investors the very same thing. But here’s the rub: BRENT AMEY DAVID MELNIK ERIC ROSEMAN As with most advice, we just have a hard time following it. INVESTMENT U In today’s market, I see it happening more and more with real estate. Encouraged by a DR. MARK SKOUSEN Chairman & Editor huge run-up in prices, investors are still clamoring to own the one investment “that can only ADVISORY PANELISTS go up.” DR. STEVE SJUGGERUD DR.VAN K.THARP I can’t tell you how many times I’ve heard that exact utterance in the past two years at WAYNE ELLIS cocktail parties, dinners, graduations, birthdays, you name it. And it’s just foolish. The only Managing Director hope for continually soaring prices is a steady supply of even more foolish investors – known MT. VERNON more prevalently as “the greater fool” theory. OPTIONS CLUB KARIM RAHEMTULLA Chairman & Editor Just consider the widespread adoption of “creative” financing schemes and “interest-only” ADVISORY PANELISTS loans, both of which carry considerable risks: and also point to an overwhelming problem: D.R. BARTON, JR. Rule #1 and Rule #2 have gotten a little dusty from lack of use. LEE LOWELL STEVE MCDONALD JIM STANTON Yet, here’s the thing: This month, we’re going to use these two invaluable investing rules to our benefit, and we’re going to make some sizeable returns in the real estate boom. But we’re going to do it safely and cheaply. In fact, I’m going to show you how to buy up prime ALSO IN THIS ISSUE... Hawaiian real estate at a steep discount to current market values. • Oxford Portfolios..........................7 And before you object that you don’t know anything about Hawaiian real estate or that • Oxfordian Property Exchange......................................9 there’s no way we can possibly buy land there cheaply, think again. This may be one of the • Members’ Exchange....................11 best ways possible to add an undervalued $4 billion asset to your portfolio. Let me explain… Over, please... P ROFIT P ICK Go “Sweet” For An Easy Double out. Selling “raw” land also leaves a lot of money on the table. Right now, owning shares of Alexander & Baldwin, Inc. (Nasdaq: ALEX) is all it takes to capital- That’s why the company pursues joint ventures, ize on perhaps one of the most undervalued real estate maximizing profits by developing attractive properties, assets in the world. like its master-planned luxury residential venture in Kauai. More importantly though, the company rein- ALEX is a Hawaiian-based company that began vests a sizeable portion of its earnings to secure future operations in the late 1800s. At first, it had no interest sources of income. Let me show you what I mean: in selling real estate. Instead, the company’s primary operation was as a sugar cane plantation. As such, it In 2003, ALEX purchased 270 fully zoned, undevel- amassed a land portfolio of roughly 90,000 acres. oped acres at the renowned Wailea resort. The purchase, by the company’s own account, has helped Of course, times changed. And so did ALEX’s deliver “tremendous profits.” But more importantly, the business. While the company still accounts for 76% of acquisition provides a long-term pipeline for residential Hawaii’s sugar production, its primary attention has development. turned to real estate. And it’s easy to understand why. And more recently, it bolstered an already impres- The firm is carrying its real estate holdings on the sive income-producing portfolio by acquiring $57 books at a cost of roughly $1,500 per acre. As you million in prime commercial property in Arizona and might imagine, the going rate for land on the islands of Hawaii is considerably higher. The Oxford Club, LLC provides its members with unique For agricultural land it’s close to $20,000 per acre. opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department And based on 2005 comparable sales, each developable and editors who contribute to the Club’s recommendations acre is reasonably worth a whopping $550,000. Of the are proud of the reputation The Oxford Club has built since its inception in 1984. We believe the advice presented to its company’s 90,000 acres, roughly 10% fall into the members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recomm-enda- developable category. tions and analysis presented to members is for the exclusive use of members. Copying or disseminating any of the information published by The Oxford The end result is a balance sheet that grossly Club, electronic or otherwise, is strictly prohibited. understates the company’s true market value. By con- © 2006, The Oxford Club, LLC 105 W. Monument St., Baltimore, MD 21201 servative estimates, ALEX’s assets are worth at least $4 Publisher Julia Guth Research Associate Chris Matthai billion, roughly double the amount currently reflected Investment Director Alexander Green Sr. Graphic Designer Kathy Osborne Editorial Director Michael Ward Graphic Designer Jennifer Hupfeld on its balance sheet. And by any analysis, purchasing Managing Editor Alex Williams Advertising Director Wayne Ellis real estate for 50% off is a bargain. Copyeditor Jennifer Shayne Director of Brian York Member Services Mgr. Kate Murphy E-Commerce Of course, that figure gets a whole lot bigger if Members should be aware that investment markets have inherent risks ALEX is able to rezone additional acres – something and there can be no guarantee of future profits. Likewise, past perform- ance does not secure future results. Recommendations are subject to the company’s already been doing successfully. change at any time, and so members are encouraged to check our website www.oxfordclub.com regularly and pay special attention to the “Oxford The only trick to making it work to our advantage Portfolio Review” section of the Communiqué to get the most value from our investment analysis. The publishers, editors, employees or agents are is demonstrating some patience. Because as Buffett et not responsible for errors and/or omissions. al also advised, once you purchase an undervalued The Oxford Club expressly forbids its writers from having a financial interest in any security recommended to its readers. And all Oxford Club employees asset, you have to wait for the market to realize its fair and agents must wait 24 hours after an Internet publication prior to follow- value. ing an initial recommendation, and 72 hours after publication is mailed and is only in writing. The Oxford Club does not act as a personalized investment advisor. Investments recommended in this newsletter should be made only And even a fraction of its fair value puts us in line after consulting with your investment advisor and only after reviewing the for an easy double… prospectus or financial statements of the company. Basic dues for membership in The Oxford Club are $149 a year. Membership includes the Communiqué (USPS 008-575), which is published twice monthly on the first and third weeks of each month by The Oxford Club, LLC, 105 W. Monument Street, Baltimore, MD Much More Than Just a Land Grab… 21201. Non-U.S. dues are higher and vary from country to country. Periodicals’ Postage Paid at Baltimore, MD and additional mailing offices. POSTMASTER: Send address changes to Better yet, there’s more to ALEX’s appeal than The Oxford Club Communiqué, 105 W. Monument Street, Baltimore, MD 21201. For ques- flipping parcels of land for sizeable profits. And that’s tions regarding the status of your membership call Member Account Services at 410.223.2643 or fax to 410.223.2650. Our website is: www.oxfordclub.com Please send any important to note. Selling land in chunks would mean investment questions or suggestions in writing to The Oxford Club Research Department, 105 W. Monument Street, Baltimore, MD 21201, USA. eventually the supply (and in turn profits) would run 2 P ROFIT P ICK California. Given the company’s success in managing 26 properties in Hawaii, with occupancy rates above 90%, we expect similar results here. But again, there’s more to ALEX than just sugar and real estate… Rounding Out the Business Mix... Another major revenue source for ALEX comes from its transportation services. In fact, the company’s shipping division, Matson, is the leading shipper of goods between the U.S.