My Refrigerator Accounting

11/11/06: It was recently announced that Sir Equity Go (Me) will be switching form a LIFO to FIFO refrigerator accounting system. This news comes quickly on the heels of a $10 write-off of inventory for "Raw chicken cutlets in a ziplock" that had been sitting in inventory for two months, hidden under the bacon. The chicken's market value was reassessed at market value which is substantially lower due to salmonella allegations. The benefits of this change will clearly outweigh the negative tax implications.

11/12/06: Sir Equity Go (Me), in a bold reorganization of his food production and consumption process, has announced plans to initiate a Just-in-Time inventory system. The practical application of this shift will require Sir Equity to eat only take-out Chinese food for every meal. While this will streamline his inventory system, it will also likely increase his W/H ratio (Weight/Height) substantially.

2x2 Matrix: Less & More

I am pleased to introduce a new series in which I simplify complex analysis into 2x2 matrices. Why am I doing this? I was trained at a management consultancy and 2x2 matrices are now in my DNA as well as being a stipulation in the contract I signed with the devil to get the job.

It turns out that any media business can be described by two variables: the amount of product, information, or entertainment being produced [referred to hereafter as Strategy] and the resulting value creation. The key question for each company is to look at each of these two critical valuables and ask: Less or More?

Google: More is More
Strategy: MORE. Google (NASDAQ: GOOG) is producing more of everything. After originally launching in search only, Google now provides email, maps, IM, photo management, and online videos of trivialities (via the YouTube acquisition).
Value: MORE. Google now has a gazillion dollar market cap.

Yahoo: More is Less
Strategy: MORE. Yahoo (NASDAQ: YHOO) has the #1 portal, #1 email service, #1 prescence in the key Asia market, and leading positions in pretty much every other vertical. They are also -- like Google -- investing tons of money in servers to make their services speedier and have recently acquired many interesting companies.
Value: LESS. Despite the great assets involved, Yahoo is run by a man who has a hard time speaking the English language, whose daughter has starred in a reality show about spoiled kids, and who doesn't know how to use email. As a result, MORE becomes LESS.





Clear Channel: Less is More
Strategy: LESS. In late 2004, Clear Channel (NYSE: CCU) embarked on a bold plan (incredibly) titled Less is More. The stated goal of this plan was to reduce the amount of "clutter" (i.e., ad units) per hour on its radio stations in order to boost listening. The super secret goal was to push advertisers from 60 second commercials to the more expensive 30 and 15 second ad formats. This program appears to have been at least modestly successful due to a significant year over year decline in sucktitude at Clear Channel radio stations.
Value: MORE. Clear Channel's stock has recently rallied and management has accepted a buyout offer from private equity firms. Including the 2005 spin-outs of Live Nation (NYSE: LYV) and Clear Channel Outdoor (NYSE: CCO), Clear Channel shareholders have done pretty well for themselves since the Less is More strategy was implemented.

Newspapers: Less is Less
Strategy: LESS. Newspapers are reducing everything in sight including: employees, subscribers, revenues, reporting staff, and even the physical size of the newspapers. In fact, they have cut everything except their margins...a fact which has prevented them from reinvesting in growth areas like they should be. In short, they are screwed.
Value: LESS. Newspaper stocks go down every day.

Critical Mass Supplier

I have an idea with a huge market, a totally underpenetrated if not virginal market, which would control the most important component of most business models.

MySpace was bought by Fox (NYSE: NWS) last year for $580mm. Youtube was recently bought by Google (NASD: GOOG) for $1.6bn. Plenty of Fish is pulling $5-10mm per year in topline with a guy, his gf and a couple of servers in their basement. eBay (NASD: EBAY) plods along without having done anything new in half a dozen years, basically living off it, while Friendster had it, and then failed to detonate it at the right time. None of these entities offer anything that can't be or hasn't been replicated by dozens of pretenders and assorted Indians in Bangalore.

What is the key ingredient these successes have which the failures strewn on the road behind them lack? Critical mass.



The best way to make money in today's world bar none would be to become a supplier of critical mass. Companies thrive on reaching the point at which they have such a base of customers that use their services that their services become an order of magnitude more valuable to every marginal customer than their competitors' services which lack critical mass. So why not supply this input which is so crucial to success?

• Fact: Most ideas hinge upon "getting critical mass." For most business models this is achieved in the 18th month of projections, or the Null Set month of reality. This ensures that demand would be high.


• Fact: Critical mass is cheap to manufacture, requiring only one critical mass machine based on a shifting flywheel design, no associated ongoing capex, no labor, no operating costs. This insures that the cost would be low.


• Fact: Critical mass is an intangible if not entirely asbtract concept. This ensures that achievable supply may be infinite (or non-existent).

Recommendation: Supplying critical mass is an extremely attractive business due to the high demand (no substitutes, mission critical input), low fixed costs, and marginal costs of zero. The key to becoming an effective supplier of critical mass is getting large enough that everyone will go to you as a supplier of critical mass. We expect that after building your own critical mass machine or using the design we depict above, this would happen roughly 18 months into the life of your startup firm.

Molybdenum, the Sasquatch Metal

Molybdenum has been making the rounds as an alleged additive for making steel alloys and as a catalyst in the production of certain petrochemical products. As a metal with consumable uses, limited substitutes and a limited supply, it tends to have inelastic demand....allegedly.

I allege that much like the sasquatch, molybdenum does not, in fact, even exist.

Points Which Point to the Non-Existence of Molybdenum:

• Has anyone ever touched molybdenum? Or seen it? I've seen or touched platinum, silver, gold and most metals, except uranium which I am willing to take on faith. I've never met anyone who had a molybdenum cufflink or a a ring with a molybdenum setting.


• Molyjhkldjaslkdjaslkd. Not a name you would give to a real substance, much less a metal. It seems like an inside joke about Molly B's Denim. Who is this Molly B? And where are her denim dungarees?


• The price has gone up from $2 per pound up to over $40 in just a few years (currently in the mid-20's). It is clear as to why the market hasn't corrected itself -- it is difficult to bring on formerly uneconomic molybdenum mines or copper mining trailing operations (where molybdenum can allegedly be found) when molybdenum does not actually exist.

Recommendation: Per Mr. Juggles Investing Commandment 5b you must verify that that which you think exists in an investment, actually exists. The non-existence of molybdenum could prove a crushing blow to stocks of firms who allegedly mine the possibly fictional metal.

Diversification, a Euphemism for Crappy Investment Option

I have read two articles today, which is my daily limit.

Linked from Going Private was this article on hedge fund and private equity shops investing in big budget movies. The second article I found while Googling a rationale for the existence of the catastophe bond .

The articles contained these excerpts respectively. 1st excerpt:

For its part, companies such as Virtual see Hollywood as a potentially lucrative place to diversify investment portfolios. And Virtual is pursing that strategy in a significant way, investing in Leonardo DiCaprio's "Blood Diamond," Brad Pitt's "The Assassination of Jesse James," and George Clooney's "The Good German."

......

As a result, Virtual covered about $125 million, or half of the $250 million it should cost to make and market "Poseidon" around the world. At the current rate of ticket sales, Virtual could end up with $75 million or so from "Poseidon" — meaning it could lose more than $50 million on the movie, said two people familiar with the film's finances. A Stark executive disputed that worst-case scenario and also said its Hollywood investments should not be judged on the domestic box office of one movie.

2nd excerpt:

Advantages of [catastrophe] bonds are that they are not closely linked with the stock market or economic conditions and offer significant attractions to investors. For example, for the same level of risk, investors can usually obtain a higher yield with CAT bonds relative to alternative investments. Another benefit is that the insurance risk securitization of CATs shows no correlation with equities or corporate bonds, meaning they'd provide a good diversification of risks.

I can provide some other investments that would provide attractive diversification for these companies -- the roulette wheel. Some secondary thoughts: If you have a proprietary algoritm that picks Poseidon as a likely hit, it's time to get a a new algoritm. Libor+230 is an insanely low risk premium for the chance of losing all your money if Mexico has an Earthquake in the next three years; to compare the market pricing for secured near investment grade debt is L+220. If a Mexican offered me that deal, I'd build a fence around him on the spot.

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Quotes Entirely Relevant to Investing

The upshot is that the points where defensive or aggressive investment positions are most effective are also typically the points where one will, at least briefly, look like an idiot for taking them.
-Hostile Trends, John P. Hussman, Ph.D.

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Long Beer Diplomacy

Crack reporting from the WSJ undercovers an industry previously unknown to me: Beer Diplomacy. The increasingly multinational nature of business will only increase the demand for beer diplomats and consumer products diplomats in general. We are actively seeking ways to increase our exposure to this sector and will advise readers appropriately.

From the WSJ.
Anheuser-Busch has been a sponsor of the World Cup since 1986. And it didn't expect to find itself in this bind when it paid an estimated $80 million in 1998 for exclusive alcohol rights to the 2002 and 2006 World Cup tournaments...German newspapers were reporting that beer fans were furious about the prospect of drinking the American brew at the tournament...If Anheuser-Busch insisted on enforcing its exclusivity, it was clear it would annoy some Germans who wanted to drink German beer and generate bad publicity for the company.
So Anheuser officials undertook an unprecedented act of beer diplomacy. Tony Ponturo, Anheuser-Busch vice president of global media and sports marketing and the executive who signed the World Cup sponsorship deal...He proposed letting Bitburger [a chief competitor] sell its beer along with Bud at the stadiums and at some promotional events. In return, the American company would gain the right to use the name Bud, instead of just Anheuser-Busch, on billboards along the fields -- and visible to viewers watching on TV at home.

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Long: Death Squad Start-ups

Dedicated to providing our readers with the bloody edge of globally diverse venture opportunities, our recent research has revealed that multiple opportunities in the "Death Squad Start Up" business exist. This research supersedes our recent recommendations in the armed piracy sector.

Start up costs are extraordinarily small, given the strength of the U.S. Dollar in the region and the low cost of critical hardware (RPGs, AK-47 models, etc.) many of which are...

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Rotten Tomatoes in Movie Theaters for RGC and CKEC

Movie theater chain AMC has talked a lot about the potential causes of box office decline. This slide, filed with the SEC, shows that box office receipts have decline in tandem with the number of rotten tomatoes per movie. Quite frankly, I do not understand why movie audiences enjoy watching movies in theaters with rancid fruit but it begs the question: Why haven't the movie theaters increased their tomatoes per theater allocation?



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Smurfiest Smurf Investment Vacation Homes in Turkey

What would you say if I said that you could live like a smurf? Would you say was I acting a little smurfy? Or that I was positively smurftastic? If the latter, then we have a great investment opportunity which will allow you to take advantage of the Turkish real estate boom.

Smurf Village located in Akbuk Bay, Turkey, within 500 meters of the Aegean Sea.




There are five discreet reasons to invest in a vacation home within Smurf village:

...

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If Excel was a Drug, I'd Sell it by the Gram

Our research has uncovered conclusive video evidence that Glenn Hubbard's impersonator and business school hanger-ons look incredibly silly when dancing in suits. I eagerely await Dance 360: Business School Edition, which I'm sure will air right after The Apprentice: Dance 360 Edition on the CW.

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If Race Car Drives Have Corporate Sponsorships Why Don't Bankers?

In the past, we have talked about the huge underunderstood markets for Financial Mudpies and Emerging Market Pillows. We believe a similar contagion could break out in the underundertsood Advertising in Finance market.

It's all about eyeballs and disposable income, so why not place your advert in the areas where both are most concentrated?

The financial profession and its customers have more money than they know to do with, which is leading to private equity firms throwing billions to...

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Why does Google Talk Make the letters "BP" Blue When You Type It?

This now confounds us and we need it solved. Mail an email to misterjuggles@gmail.com and tell us why Google Talk makes the text "BP" blue in messages. We will paypal $50 to the best* answer as of a week from now. The criteria are both subjective and objective as determined by our advanced DCF Correctness Model. We reserve the right to republish the theories which are especially awesome, with attribution of course.

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The Big V, the Big C and the Big WTF

The UK is a land of fear. Everything is geared to frightening the populace into a frenzied state. The free daily papers consist almost entirely of fear mongering journalism about violence in schools, poisons in foods, death by cellphone radiation, minicab rape, murders of Britons on Holiday, genetically altered crops. All of this is complemented by a steady torrent of T&A, usually on the same page. Mind the gap, mind the taxi, mind the man with the gun, mind the man about to violently rape you, mind the totty, mind the CCTV, mind the et cetera. Big Brother will never stop reminding you to mind while you are in the UK. Even the escalators have stop buttons positioned every few feet, as if escalator rides are a high risk endeavour.

This context will not help you when faced with the Creepy V.



No, this is not an educational ad warning about the dangers of "vagina" to young men (which are plentiful) nor is it an ad for outsourcing child molestation to letters of the alphabet. The Creepy V is the avatar used to market Virgin's new Cancer Cover product which "can give you a cash lump sum to help you financially if you’re diagnosed with cancer in the future." I'm not a big believer in insurance...


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Quotes Entirely Relevant to Investing

Martins: Have you ever seen any of your victims?

Harry Lime: You know, I never feel comfortable on these sort of things. Victims? Don't be melodramatic. Tell me. Would you really feel any pity if one of those dots stopped moving forever? If I offered you £20,000 for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare? Free of income tax, old man. Free of income tax - the only way you can save money nowadays.
-From the movie version of Graham Greene's The Third Man:

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When You Know You've Been Shorted

My GF: How do I make it so I'm invisible on Google messenger?
Me: But I'm the only person on your Google Talk buddy list...
My GF: So how do I do that?

Recommendation: Market underweight me.


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"Smith Barney, Why do you hate your customers?" A Play by JD

A tale of dinosaurs in the age of robots.

"For the customer, who doesn't enjoy high levels of service and has no respect for their money, Financial Management Account, by Smith Barney"



JD: I have a brokerage account with you. A relative used to work there and having a live broker helps for things like buying producers of Japanese toilets or Russian Petroleum on their native exchanges rather than illiquid domestic ADR's.

Smith Barney: Yes, I am a well-known, venerable brokerage house, built upon the philosophy that customers should be rich, have low expectations and a deep self-hatred...

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Quotes Entirely Relevant to Investing

Patience is waiting. Not passively waiting. That is laziness. But to keep going when the going is hard and slow - that is patience.
-Leo Tolstoy

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McDonald's Gets It

McDonald's (MCD) is known for supplying products so good that they're dangerous, whether they be steaming hot coffee or obesity causing french fries. But they should be known more for getting it. Yesterday, McD's announced that they will be selling exercise DVD's along with their fast food. They get 'em coming and going...

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Short Coca-Cola Blak

My position is so short, it may actually go negative short, which would be a long and would be terrible for all. Just like this horrendous disgusting concoction from Hades. Coke with double the caffeine, half the carbs and infinitely more "rich coffee essence."

Just as a service to the Coca-Cola Company (KO) here are some other combinations which, if you care about your shareholders even a little, we recommend you should never combine.

• Mayonnaise, beer and walnuts.
• Corriander and Bette Middler...

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Long Japanese Bathroom Technology

Returning from a recent trip to Tokyo and enamored with Japanese technology in general -- and bathroom-related technology in particular -- I recommended that an acquaintaince of mine pick up a few shares of Toto. Two weeks later, I find out that he has invested in a comeback attempt by Toto, the multi-platinum, Grammy-winning band responsible for the hit, Africa.

I suppose I should have been more specific, especially since US investors are typically skeptical that a toilet maker can sustain a $3.6bn market cap and a 37x P/E. To clarify and rectify my mistake, I hereby formally recommend a long position in...

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I Will Teach You to Be Rich: Clean Tech Pure Play

Readers are always emailing me, asking me to explain exactly how I maintain such an enviable track record. So here's a step-by-step case example of how to make money on a startup.

Step 1: Find a hot sector
Investors often talk about the "rising tide" law of investing: better to own a mediocre company in a great sector than a great company in a terrible industry. When a sector gets hot, the crap often rises as fast (or faster) than the cream.
No sector is hotter right now than "CleanTech." How hot? Big name venture capitalists are now raising cleantech-only funds. Bush discusses clean energy in every address he makes. And solar power -- solar! have I gone back to the future? -- stocks like Evergreen Solar (ESLR) and SunPower (SPWR) are doubles coming out of their IPOs.


Step 2: Create a pure play
Investors love pure plays. When a sector is hot, they want as much exposure as possible. Take online advertising. Sure, News Corp (NWS-A) owns MySpace -- the fastest growing web site and community -- but you have to buy a whole bunch of newspaper, cable, and satellite TV assets too. The performance of those assets will drown out any positive developments at MySpace. Instead, investors clamor for stocks like Yahoo (YHOO) and Google (GOOG) ...they're pure plays.

So for cleantech, I will start a company from scratch to ensure it's a pure play.

Step 3...

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It's Direktanlage Wednesday!

Everyone post your insider information in the comments section of this post. There is no way the SEC will find out about us this time! Make sure your comments follow our specific Direktanlage Trader checklist as outlined below.

Comments must:

• Contain insider information that will let us reap fraudulent (and likely abstract) profits.
• Be highly illegal.
• Be sourced from a Croatian, German, Russian or someone of evil descent.
• Give guidance on alleged inside-trader Monika Vujovic...

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Disruptive Jobs of the Past

The new X-Men comes out this summer and on scanning the cast list, I noticed that Psylocke will be played by Mei Melancon, who has done little other work of merit, except for an appearance on Deadwood. Her exact role:

"Deadwood" - Childish Games (2005) TV Episode (as Meiling Melancon) .... Chinese Slavewhore

If ever there was a disruptive industry, slavewhoring would have to be it. Back in the good old days, being a land (capital) owner meant you would have your labor done by your slaves and your sexual needs satisfied at the local whorehouse. This was just how it was done, and...

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Quotes Entirely Relevant to Investing

From Ruminations on Russia

"The job of a Russian man is to plant:
His house in the ground (sic).
His seed in a woman.
His neighbour in jail."

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Short Dick Grasso

Today, a recurring Dealbreaker feature involving Dick Grasso has spurred our analysts to break another aspect of the scandal involving David Delainey and Mark Davison, first exposed by Long or Short and threatening to engulf Wall Street: Star Trek Celebrity Imposters on Wall Street.

The Dick Grasso article clued in one of our staff who, on further investigation, has revealed that Mr. Grasso is also involved in the imposter scandal. Mr. Grasso has reportedly been taking fees for appearances at various Star Trek functions as "Arturus," a guest character on Star Trek Voyager played by Ray Wise...



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Awkward Moments in Marketing

From a very earnest, deep-voiced P&G (PG) advertising executive on a recent conference call:

"When a girl starts menstruating, we want to be there...on the radio, in print, and on the web sites with relevant advertising."

From a very earnest, eager McKinsey consultant:

"Now we're focused on figuring out what it is about Metamucil that makes it so attractive."

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Satan's Portfolio: MO, RMBS, DLM

Here is an explanation of Johnny's Satan's Portfolio Investing Thesis.

Altria (ticker: MO)

Why would a $145bn market cap company change its name? If it's business was selling products to slowly kill its customers through addictive fire-lit tobacco. Satan knows that even that kind of mortal churn is capable of generating a stream of free cash flow to reward its stockholders. He also relates personally to the business strategy implicit behind the name change:

“They are trying to bury themselves. This is a name and brand the objective of which is to make themselves invisible.”

Invisible merchant of death. Play to the Dark One's ego, Altria, while selling your murderous and addictive maccaroni & cheese......

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Biopiracy Downgraded to "Not At All Pirate Like"

The recent Captain Hook Awards for Biopiracy do not play into the piratery investing series, because they are not truly piracy. If so-called "Bio-Pirates" were using frigates, sloops and galleons to plunder the likes of Genetech (DNA) off the Barbary coast, then aye, we could approve on the basis of demonstrated piratery...

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Short Cocaine, Heroin, Microsoft

Recent research by Long or Short questions the purchasing power of the Family of Four ("FoF"). During the process of investigating pricing changes relevant to the decline of FoF purchasing power, Long or Short also identified several trends in the wholesale and retail drug trade.

Increasing prices in Cocaine and other "A-List" narcotics have jump-started online disintermediation of street dealers and spawned...

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Quotes Entirely Relevant to Investing Abraham Lincoln

That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.
-Abraham Lincoln

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A Letter to Our Shareholders: On Being Taken Over

Recently, Carl Icon, a noted corporate raider and greenmailer and Chairman of Liquid Icon Capital, LLC ("LIC"), announced his acquisition of a significant block of Long or Short Capital, LLC stock along with his intention to compel changes in management here at Long or Short.

Because we are happy in our cushy offices and enjoy our substantially over-inflated salaries and bonus plans ripe with inexorable options in a fictious stock...

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Piratery on the Catwalk

It was only a few weeks ago, that we outlined that providers of pirate patches and clothing would benefit from the rising piratery tide. Now witness piratery on the catwalk...


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Tales from My Internecine Struggle with the IT Department

I begin my descent to the 23rd floor. As I exit the elevator bay at my destination level, a colony of cubicles are laid out in front of me, perfectly aligned as if created by African honey bees. I scan the area and alight East, turning around a corner.

The monstrous IT guy remains motionless just ten feet away. Emotions give way to cognitive thought and I train my glare on him. Almost on cue, he begins his approach.



With blinding acceleration, he lurches onto me with a powerful "thud crackle". He slams into my chest. The impact is incredibly powerful, knocking the wind out of me. His huge arms envelope my complete upper body and I can feel my chest plate move as his beak grinds against it...

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Carl Icahn is Blogging?

It would be remiss of us to fail to note the arrival of Carl Icahn on the blogging scene via his new entity Liquid Icon Capital.

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The Purchasing Powerless

A macro trend that has concerned us greatly is the ability of the "family of four" unit to afford the modern American life. In previous generations, the FoF could afford any leisure they saw fit from sporting events to theaters to mega yachting; they could use the remainder of their moneys to run family farms which were crucial to soaking taxpayers for billlions in subsidies and ensuring that sugar was replaced with corn syrup in soft drinks...

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Quotes Entirely Relevant to Investing Powerpoint

An Ode to Powerpoint:

While you were making your [Power­Point] slides, we would be killing you.
-Russian officer commenting to a US offier on who would have won if we had ever actually fought WWIII in Western Europe.

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Short: Mark Davison

Continuing investigation by Long or Short Capital into the widening "Star Trek Imposter" scandal has revealed that Pitt-Fox, Kelton's Head of Corporate Finance Mr. Mark Davison has also been embroiled in the controversy.



Prosecutors allege that Mr. Davison has been supplementing his income (and failing to report it) via similar Star Trek convention gambits as recently uncovered by Long and Short with respect to Enron bad-guy/Star Trek android David Delainey...

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Ask Julia About Your Length

Julia Mezzanine Tranche is an analyst at Long and Short, as well as a member of the Non-Certified Advice Columnists of America, the International Society of Bad Advice Columnists and Chairwoman of the Prestigious European Association for Paperclip Entrepeneurs and Analysts (PEAPEA).

Note: some letters may be "enhanced" for self-glorification.


Dear Julia:

Recently, Long or Short Capital's Johnny Debacle wrote an [interesting and dynamic piece on Phantom Bonds totally characteristic of the brilliant analysis that typifies Long or Short Capital]. He indicates:

If you have a 20 year plus horizon, then you probably want an allocation that is heavily weighted towards equity, say 90-100%. But you could supplement a 100% equity allocation with an incremental 20-30% of phantom bonds, without disrupting your asset allocation.

As I am 102 years old, my own horizon is somewhat shorter. Can you recommend some Phantom Bond allocations that might be better for my needs?

Signed,
I'm Dreadfully Hearing Impaired in Tiny Ithica, Texas.

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JD's Lending No-No's #2 and #3

Read JD's Lending No-No's #1a and #1b. The focus today is on what can be gleaned from a lender presentation.

Lending No-No #2a: Don't loan to companies who will need to control costs, if they have no connection to actual real world cost controlling.

Examples:

I was recently in an Italian city for a meeting. The company I was there to see indicated that the best way from the Aeroporto to the meeting was by taxi, so I trusted them and took a taxi. It was €80. I later found out that there was a €5 shuttle express that would have taken me with half a km of the meeting and would have taken about 10 minutes more. These are the people charged with cutting costs in a large industrial company that operates in a cyclical sector that saw several competitors file for bankruptcy only a few years ago.

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How Not to Name Your Company

In my unending search to uncover undervalued and badly named stocks I came across: "CAPEX SA" (CAPX.BA). CAPEX is an Argentinian electric utility serving the completely deserted but somehow still under-penetrated Patagonia region of South Ameria. We are initiating coverage of CAPEX with a SELL rating. CAPEX has a strong track record of raising and spending capital but that seems to be where the story ends.

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Appropriately Named Executives

I haven't seen such appropriate names since Michael Stonebreaker played football at Notre Dame.

• Lakshmi Mittal, CEO of Mittal Steel Company, a redundantly-titled corporation.


• Cedric Burgher, former CFO of Burger King (he never should have left!).


• Rick Wagoner, CEO of GM

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Quotes Entirely Relevant to Investing Jesse Livermore

A loss never bothers me after I take it. I forget it overnight. But being wrong –not taking the loss—that is what does damage to the pocketbook and the soul.
-Jesse Livermore

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Short Boy-on-Boy

Long or Short Capital has initiated prophylactic coverage of "Boy-on-Boy" in conjunction with recently picking up "Girl-on-Girl."

The Boy-on-Boy space is saturated by multiple market actors and opportunities for price discrimination are muddled by a highly fragmented marketplace. Increasing commoditization in the space limits opportunities for upside absent domination by a stronger alpha player. In addition, low or no barriers to entry mean that the stiff foreign competition (Dutch in particular) has deeply penetrated the nearly frictionless space from the bottom up...

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Are Phantom Bonds Right for My Portfolio?

A lot of questions have been coming in about so-called Phantom Bonds and where they fit in the asset allocation of a personal investment portfolio.

The answer is that it depends.

If you have a 20 year plus horizon, then you probably want an allocation that is heavily weighted towards equity, say 90-100%. But you could supplement a 100% equity allocation with an incremental 20-30% of phantom bonds, without disrupting your asset allocation. How is that possible? Well one of the unique features about phantom bonds is they don't actually exist. So in addition to the existing equity level rate of return, phantom bonds would be adding both non-existant diversification AND non-existant fixed income payments.



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Revising Snoop Dogg Down

Like a company that has expanded outside its core business, Snoop Dogg has overextended himself. He has peaked and is ripe to be shorted.

Snoop Dogg has rebranded himself repeatedly, going as:

• C. Broadus
  
• Calvin Broadus
  
• Snoop
  
• Bigg Snoop Dogg
  
• Snoop Doggy Dogg

He lacks focus and recently has gone even further afield. He has appeared in advertisements for Chrysler, promoted hot dogs, and performed cameos in multiple movies. He even went so far as to produce his own porno film.



All this means that Snoop Dogg's returns on incremental capital have been...

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GOOG No Means Yes Baby Part 3

(Read GOOG, No Means Yes Baby Part 1 and GOOG, No Means Yes Baby Part 2 )

Intrigued by the reaction of Mr. Moncrief, in Part 1 and the general inability of these analysts to take "No" for an answer, this analyst arranged for an interview at Mr. Moncrief's midtown offices. We were particularly interested in the impact personalities might have on sell-side professionals. What was the model for their attitude about these stocks that seemed to defy all caution? Ignore all negative news? The transcript is attached below.

Prescott R. Moncrief III (on phone): "...c'mon Bateman. We'll kamikaze over to Nell's, chase some cotton underwear. Charlie Cushing knows this 18-year-old bimbette that's gor-geous. Hold on. WOAH! This skirt who looks just like Ailcia Witt back when she was still hot, like in that Sopranos ep, just walked in, let me call you back, Patrick. Hello. What have we here? I'm Prescott R. Moncrief III, the administrator of this facility. And who might you be?"

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Piratery and Warren Buffett

In connection with recent recommendations on piracy, Long or Short Capital's managers have been closely tracking developments in the privateer market. So too has one famous Nebraskan investing guru.

We have uncovered renewed interest by Berkshire Hathaway in piratery and, in fact, the adoption of piracy directly by Berkshire's Warren Buffett, and therefore we are boosting our recommendation.

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A Guide to Boring Conversations with Financial Professionals

You: So did I tell you about my portfolio? It's totally kicking ass, and that Oil Conglomerate Search Engine company is going to be the name of my new boat. Also that Commodity Producer Consumer Electronics company has been generating stellar returns over the last 6 months. It's green every day. I should just start my own fund. I AM THE MAN.

You: So I read in the Journal today, [insert anything].

You: [Any story involving golf or fish or boating where someone does not die or at least get maimed by sonar]

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Quotes Entirely Relevant to Investing Solzhenitsyn

If one is forever cautious, can one remain a human being?
-Aleksander Solzhenitsyn

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Sell Out Saturday: Q3'06 Mid-Quarter Earnings Update

We are revising our guidance down for our Q3 revenue projections. Current contextual CPC advertising is down 60% sequentially period over period. Although our spirits are buffetted by our Infinite% improvement in YOY Q3TD growth, this is probably due to a slight misunderstanding of basic principles of logic and arithmetic. Static text ads are performing as expected, while Blogads is only slightly below plan at $Pretty Good in attributable operating cash flow.

After an unstensive SWOT analysis...

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Short Novartis

The Wall Street Journal is reporting "Novartis to Pay Infinity to Develop Cancer Treatments"

While we are all for cancer research, it will be really hard to get attractive returns for shareholders on an initial investment of infinity dollars...

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I bet you've at least seen the MOVI

Our previous pieces on Moviegallery (MOVI), are looking pretty damn good (see our earlier reports Corporate Tarpit and Translating Corporate Speak: MOVI & BBI) given MOVI's performance since we released our market moving analyst reports. Same thing happened with..

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GOOG No Means Yes Baby Part 2

Read GOOG, No Means Yes Baby Part 1)

Quiz: Place the two statements in chronological order.

Statement 1: Google (Related Reports) Letter to shareholders-

We will make decisions on the business fundamentals, not accounting considerations, and always with the long term welfare of our company and shareholders in mind. Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders' interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour.

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Mr Juggles Investing Commandments (#3 & #4)

In this installment (Read Mr Juggles Investing Commandments #1 and #2), the focus is what you can discern from a company's investor relations team.

Rule #3: Stocks with attractive IR women are no more likely to appreciate than average, but they are more fun to cover.

Stocks are, in the end, a good that is subject to the normal laws of supply and demand. A CEO who hires an attractive IR woman understands marketing and is stimulating demand; after all, his target demographic -- financial analysts at large investment firms -- is almost exclusively male and geeky. Unfortunately, these same CEOs have a propensity to overspend and have questionable judgement (tending to, say, sleep with members of the IR department). Thus, on balance, these stocks are not any more likely to perform better than stocks with unattractive IR women or men but, if you are in the aforementioned demographic, you are more likely to enjoy your time with the company. That's a net win for you. Half of investing is picking the right asset class.

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GOOG No Means Yes Baby Part 1

Analysts are apparently panting down the trail for some "hot Google action." Our attention was piqued by reactions of leading sell-side analysts to Google (GOOG) CFO, George Reyes, at a recent Merrill Lynch investor conference.

Reyes initially commented that, Google is "getting to a point where the law of large numbers starts to take root..." He continued to say that "At the end of the day, growth will slow..." and that "We're going to have to find other ways to monetize the business."

The sell side responded with comments including...

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Chinese Military TV Announcers

Pickup any newspaper and you'll see stories about the rapidly growing Chinese economy. Most observers also know that the Chinese advertising sector has particularly strong prospects since advertising tends to comprise a much smaller part of developing economies relative to developed countries and this gap closes over time. But pundits have overlooked another key driver for the Chinese media and advertising sectors: the military host. These military hosts were a secret until Long or Short ventured onto the mainland in order to obtain shots directly from the CCTV feed...

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Improving Our Diversity Metrics

Long or Short Capital continues to diversify ethnically which we think is crucial to any investing strategy. We have renamed Equity Private to Julio Mezzanine Tranche, but you can refer to Julio as "the Mezz," or alternatively, Senor Tranche. The last title may be a little too formal for Julio given his status in the capital structure and the extent of his legal rights, but we'll see, as the possibility always remains that he will be a real bitch in a workout...

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Shorting David Delainey

Former Head of Enron Energy Services, David Delainey has problems stemming from his admission to acts of perjury including lying to the FBI. But those are peanuts compared to the trouble he is in for spending years posing as Star Trek's "Commander Data," and pocketing thousands of dollars in appearance fees at various "Star Trek" conferences and events.

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Quotes Entirely Relevant to Investing CPA Accounting

This one goes out to all our hard-suffering CPA-studying accountant readers:

"Accountancy was my life until I discovered Smirnoff."
-Vodka advertisement from 70's

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Sellout Saturday: For Charity

So I was clicking on our banner for the Grameen Foundation, because it’s a great cause and I like to check it out every couple weeks, and when I clicked through, I saw a woman, probably a very poor one, holding up a phone right at me and I couldn’t figure out why. I looked closer at her phone and realized it was NICER than my phone...

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Overheard in Our (Fictious) Office

I overheard JD discussing his Long or Short Capital marketing optimization strategy with Dr. Gupta, who had asked about our transition from our old Blogger home:

"Overall, this strategy has led to a runrate of Google hits which has doubled for [LongorShortCapital.com] vs [LongorShort.blogspot.com]. We have lost the SE query flows from "Short Mexican Joke" and "Sexy Chinese," but I think we'll survive, especially because "Scone"...

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Long on going Long Shareholder Lawsuit Lawsuits

According to the 10b-5 Daily, according to the Economist, according an article in the Stanford Law Review, according to a study by James Cox, according to data collected from 118 securities class-action suits between 1995 and 2002, 72% of institutions never claim their full share of the lawsuit proceeds.

The always interesting 10b-5 Daily notes that the article notes that institutional investors may be "violating their fiduciary responsibilities when they do not try to get their money" from firms violating their fiduciary responsibilities and could be the subject of "class-action suits" over the improper handling of class-action suits...

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Spam at Its Best

Dear ラブステーション-

I write kindly in response to the email you sent me yesterday, which was as followed (translated from Japanese by Google's "Human Translator Trapped in a Box" Service):

From: ラブステーション
Date: 22 Feb 2006 22:22:50 +0900
Subject: 　お待ちしております
To: misterjuggles@gmail.com

Is association with the Serret Bu woman whom it selects how? It gets wet to getting wet and the る woman who is sown anytime and being perfection free anywhere, it introduces...

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Quotes Entirely Relevant to Investing William Jennings Bryan

No one can earn a million dollars honestly.

-William Jennings Bryan

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Adding Google Site Search Module to Your Site

This is a secret sell-out. I struggled forever to get a small form factor site search module from either Yahoo or Google. At first, I opted for Yahoo as it seemed to be the more flexible code and hoped it would boost our Yahoo search ranking which seemed to blow. I settled on Google once I stripped out a bunch of different aspects of it and got into the smallest size possible. So if you want to add Google Site Search to your Site and in the slimmest fashion, use the code below. Be mindful that you need to replace the three bracketed portions ("yoursitehere.com") with your own url in the format as it is in the brackets. But remove the brackets. Works great in a sidebar, as you can see at the bottom of ours.

Here is the code: Link to Google Search Module Code

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If the Russian Can't Do It, It Can't Be Done

In the continuing spat over the investability of Russian equities, I offer the following picture which once again shows that Russian aircraft manufacturers (in this case Ilyushin) and Russian airlines (in this case Vaso Air) have everything under control.
>

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Short Expectations

The following was contributed last week by our new writer, Equity Private, who has an excellent blog about being an private equity insider. Both He/She/It ("Hsit"), along with Female to Be Named Later (links to her blog), will be contributing at will.

Meta data surrounding "investor relations" has the potential to become a derivative vehicle itself. Investor Relations ("IR") is a field which has developed into an art and a science due to the importance of earnings announcements and the triumph of the short-term (12 week) focused analyst over the long-term (12.5 week) focused analyst. Below, we outline a system to guide equity strategies in this realm...

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More Anti-Web 2.0 Wiki

Added some of the comments listed for the Anti-Web 2.0 wiki and also an image. We'll continue to update it as comments and trackback roll in. Check this anti-Web 2.0 Wiki out and add your own definitions...

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Satan’s Portfolio: RCII, Gazprom, and Verizon

Future additions will be in threes, as all bad things come in threes. Here is an explanation of Johnny's Satan's Portfolio Investing Thesis.

Rent-A-Center (ticker: RCII)

Rent-A-Center targets the least educated and poorest American demographics and sells them rapidly...

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Quotes Entirely Relevant to Investing

Advice is judged by results, not by intentions.

-Cicero

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Sell Out Saturday: Announcing Our Intention to IPO

On Blogshares.com. More details to follow but we will be marketing our IPO in due time. Prepare to have enough capital to be able to own a fictitious piece of us.

Follow Our Initial Public Offering

Short the Guy Next to the Guy

Months ago I got free business cards for longorshort.blogspot.com with the intention of some guerilla marketing. Never happened. So yesterday, I got around to doing something about it and and gave the guy who stands next to the guy who gives out free daily newspapers the stack of 200 business cards and offered to pay him $20 to...

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Longue ou court...en francais

Mes amis! Regardez cette page ici régulièrement si vous voulez lire des articles financiels en francais mauvais. Cette page = "super cool".

Read French

The Time Barron's Investing Thesis

Barron's

Fact: Barron's is the best mainstream financial publication, frequently making incredible calls. The question though is what is your catalyst for exiting your position? It's awesome to have a great reason (Barron's) to buy a stock, but it's decidely not awesome to not know when to sell it...

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How do you know if something is Web 2.0?

Web 2.0 is on the tips of fingers and lips of influentierati across the web. But how do you know if you, a product of yours, an investment of yours or a service you use is Web 2.0? This handy reference sheet will help guide you.

Is it a Web 1.0 idea repackaged, reinvested in, and resold as a new content delivery paradigm social calendar platform?

It is Web 2.0!

Does it talk about community or social networking without any natural way of accomplishing it?

It is Web 2.0!

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Quotes Entirely Relevant To Investing

There is a limit to the application of democratic methods. You can inquire of all the passengers as to what type of car they like to ride in, but it is impossible to question them as to whether to apply the brakes when the train is at full speed and accident threatens.
-Leon Trotsky

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Sell Out Saturday: Linking with No Shame

So our last true sell out effort, was changing this page to show candy ads. It yielded proof that our readers hate chocolate, since our finance ads got far more clicks. Today's effort won't be about direct revenue generation, but merely direct whoring.

We urge you, our readers, to post a link to longorshortcapital.com wherever you have the capacity to do it. Be it a forum you are a part of, an illegal underground file trading network which you rip for, or a website you run, post a link to our site. Any link posted will get a reciprocal link if you email misterjuggles@gmail.com. If you have any qualms about doing it or fear shame, just ask yourself "What would Genghis Khan do?"

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Long or Short Announces Q2′06 Dividend of $1.50

Creating value for our subscribers, that's what we are all about. If we don't get you with our content, we'll instead reel you in with our dividends. Long or Short Capital is happy to announce our Q2'06 dividend of $1.50 per subscriberholder per our dividend policy. A subscriberstake is now worth $75, assuming no growth and an 8% discount rate. Assuming just a measly 5% annual growth in our dividend gets you to a value of $200 for a subscriberstake. How much does a subscriberstake cost? $0. We bring the value to you. Given our float of 85 subscriberstakes and the no growth assumption, our current capitilization is...

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Fruit Drinks in Spain

In Saudi Arabia, they stone you for committing a crime. In Spain, they fruit you.



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The Cleavage Hypothesis

While subscribers to the Wall Street Journal don't usually read Vogue, the finance world does pay attention to at least one aspect of women's fashion: the length of their skirts. For the lay investor, I am not making a reference to stockbrokers starring at their secretaries' asses as they bend down to get more Form 144's. I'm referring to the Hemline Theory, which in its most general form, states that there is a relation between the "fashionable" length of skirts and...

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Article contributed by "Female to be Named Later"

Products So Good They’re Dangerous: AAPL

A recent lawsuit (see more details here) accuses Apple of making a product, the iPod, so compelling and feature-filled that it is dangerous to its user. In this case, the accuser claims the iPod's massive capacity for tasty tunes of tempting him...

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Long or Short Capital Reports Q2′06 Results

Long or Short Capital's fiscal quarter ended on 1/31/06, and the company reported their results in a press release on their site:

Mister Juggles: "We completed a watershed first Half to our 2006 Fiscal Year. Q2'06 was our best quarter ever, thanks to the genius of management and a compensation package which continues to be heavily weighted towards long dated options in the company's non-existent stock. We have an ever increasing amount of skin in the game so you should trust us, subscribe your friends to our site and find ways to generate more free cash flow for us which will turn into dividends for you...

Unaudited Financial Results for Q2'06 and additional commentary here

Quotes Entirely Relevant to Investing

"The Greatest Happiness is to scatter your enemy and drive him before you. To see his cities reduced to ashes. To see those who love him shrouded and in tears. And to gather to your bosom his wives and daughters."
-Genghis Khan

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Clear Buy Signal for ORCL

A clear buy signal for Oracle (ORCL) is provided in a SF Chronic Article on Larry Ellison's spending habits:

"In e-mails, which stem from a recent shareholder lawsuit against the technology titan, Ellison's accountant, Philip Simon, warns the billionaire about his habitual runaway spending...

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Incredibly True Quick Serve Restaurant Truths #2

Cedric Burgher, formerly the CFO of Burger King, is now the CFO of KBR, the division of Halliburton (HAL) that does contingency support and various government subcontracting in Iraq and hotspots around the world. Burgher moved from one about to IPO company....

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Revising Our Price Target for Google Down

Long or Short Capital Research LLC is revising its price target for GOOG down from "Infinity" to "Infinity-1"....

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The Cephalopod Index is Officially Out of Control; Long the Giant Pacific Octopus

We cannot get enough of Cephalopods (see our earlier analysis of Octopi investments and hand puppets) and we contiue to see this investment as one whose bull thesis will climb a (sea)wall of worry...

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Posting Halted: Excessive Volume

After almost two weeks of daily posting, Long or Short suffered an outage on Saturday that made people unable to sell their subscriberholderships and brought posting to a halt. Some of this has been attributed to poor internal controls, such as allowing Debacle to do whatever he wants on the backend or letting Kaiser alter accounting records to mask related party transactions which would reveal...

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Quotes Entirely Completely Relevant to Investing

"No matter how good our kung-fu is, it will never defeat guns."
-Iron Robe Yim

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Sellout Saturday: Fiscal Q2 Ends Within the Week

Subscriberholders are locked in; moneys to be distributed as well as a new "In Kind" non-monetary payment...

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Halliburton Loves that Dirty Water

This is why investing in evil is so profitable.

How else can you reconcile yesterday's Halliburton (HAL) news snippet(via the AP):

"The level of contamination was roughly 2x the normal contamination of untreated water from the Euphrates River."...

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Candy and Taxes

We are currently running a sophisticated multivariable marketing analysis of our readers. These three variables are what we think most embodies, you, our readership.

1) Investing
2) Taxes and Accounting
3) Candy

We have set out Yahoo Ads to default to Taxes & Accounting on Long or Short Capital (our new/future home). On our current/old home Long or Short @ Blogspot, we have...

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Short: Jack Bauer

Did you see the 2nd episode of 24? I've been a bit behind but I'm catching up on Tivo. When the show ended, Jack Bauer was in an airport with about 15 Russian terrorists. It looked like he had a handgun but they all had AK-47s. Also, his new girlfriend's son is in the same building and I get the feeling he's going to go overboard trying to protect that kid. No way Jack Bauer gets out of this jam. He's done for this time.

Long: Russian Terrorists
Short: Jack Bauer

Note: I haven't felt this good about an idea since I shorted Google at $87. That one didn't work out so I feel like I'm due.

Funniness vs Sketchiness

We have new, mature-themed analysis ready for consumption. But we debated internally the value of solid, humorous economic analysis versus the cost of sketchiness. On the one hand, Long or Short Capital cannot display this piece directly on our site; after all, 2/3 of our staff have children who may be able to read this site (if only we knew where they were). On the other hand, fiduciary responsibility demands that we satiate our subscriberholders desire for financial humor before all else, even decency. So in order to read the article you must answer an "adult" question. The correct answer will link you to the adult article. Good luck and no cheating please.

What is a laser disc?

A) A frisbee with a laser attached.

or

B) A video techonology similar to DVD's but the size of a record. (sub question, What is a record?).

Piratery Update: Short Indian Ocean Piratery

Our earlier pirate investing analysis stressed the importance of avoiding oil routes, places with heavy security presences and places with significant competition. The competition in the Indian Ocean is such that pirate entrepeneurs often have to settle for second rate targets which puts sigificant downward pressure on booty margins. See this CNN report titled "U.S. destroyer chases down suspected pirate ship." For those investors who did not heed our advice and thought it was wise to buy a few speedboats and rocket propelled grenades from Omar on the Bozaruto Islands, well, you just blew your children's college fund. Explain that one to little Timmy.

The U.S. Navy boarded an apparent pirate ship in the Indian Ocean and detained 26 men for questioning, the Navy said Sunday.

The 16 Indians and 10 Somali men were aboard a traditional dhow that was chased and seized Saturday by the guided missile destroyer USS Winston S. Churchill, said Lt. Leslie Hull-Ryde of U.S. Naval Forces Central Command in Bahrain.

Sailors aboard the dhow told Navy investigators that pirates hijacked the vessel six days ago near Mogadishu and thereafter used it to stage pirate attacks on merchant ships.

Recommendation: Increased pillaging of dhows is a classic indicator that the local pirate market off the Somalian coast is over-saturated. We recommend a Short position on those markets as they are likely to experience an increase in pirate captures and a decrease in local booty margins. This would be a great time to jump into Latin American Pirate Bonds which are currently yielding a juicy and robust 29%.

Quotes Entirely Completely Relevant to Investing

Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.
-George Washington

Sell Out Saturday: Subscribers Get Rich

It is a little over a week till the end of our Q2'06 and it is time for our subscribers to think about the impending riches which await them per our dividend policy.

But how can you get more rich? Email a link to the best Long or Short Article (see the list of Our Best Posts on the left sidebar) to a good friend of the other sex. In fact, to make it easier for you, I have written the email for you so that you can just copy and paste it.

Dear [Insert Recipient's Name],

This site is very great and I think you would love to read it and click all their ads. Here is an example of an article I really liked which compares investing to dating http://longorshortcapital.com/investing-in-public-equities-is-like-dating.htm.

But this is not the only reason I have contacted you. Recently I have found myself lost in thought thinking about you and our time together. I know, for a lot of reasons it doesn't make sense, but I long for your lips and the tender way your hands brush against me when we're around one another. I think we'd be great together and I'm ready to make hundreds of babies with you. Hopefully, I'm not coming on too strong and you feel the same.

I long for your reply and be sure to check out that incredible longorshortcapital.com while I'm waiting.

Oceans of Love,
[Insert Your Name Here]

We have tested this email with science, and it has proven to be the most successful at generating pageviews and ad revenue. Be sure to CC us on all emails (misterjuggles@gmail.com), and whoever sends out the most gets a digital kiss from our staff. We love you too.

The Sell Side: A Case in Point

So I'm doing my job, analyzing a company that doesn't make the widgets, but instead, supplies the engineered material which goes into making the products which protect the machines which make the widgets. They need millions of dollars to finance the widget-producing-protecting-producing procuess. The management and their bank presented the company to a meeting of potential investors with a combination of numbers, absurdist terms like "Syneries from A Vertical Roll-Up Strategy" and "Greenshoe MFN Language" and slides. They were trying to sell us on why we should invest tens or even hundreds of millions in their company. Then they whipped out this slide. Note that the original slide had an X axis which listed the company and its competitors and a Y axis which listed abritrary cherry picked categories; I have edited the slide to protect the parties involved:



Dots? That chart is the basis upon which I should direct our investors' money? By dots? AND HALF DOTS? Some poor 4.0gpa-Ivy league grad sold his/her soul to the I-Banking Gods to spend 90 hours per week creating crap like this?

That's the Sell Side, baby.

Is There a Bubble in Housing Bubble Blogs?

Given Johnny Debacle's large personal investment in the Denver housing market, all of us here at Long or Short try to keep an eye on the housing market. As a collective, we are skeptical that housing trends will hold up and are worried about having to bail Johnny out of his housing debacle.

Even more concerning, however, is the emerging bubble in housing bubble blogs. These blogs, devoted to detailing the demise of the housing and refi boom, have begun to proliferate more quickly than Freedom Loans or all those anacondas I let loose in the Everglades in the 80's.

Evidence: in just one query on Google's blog search, I turned up the blogs below. Undoubtedly, there are more out there. Is the public aware of this pernicious threat? What is being done by Greenspan/Bernanke & Co to ensure a "soft landing"? We need answers, the Fed, and we need answers now.

http://bubblemeter.blogspot.com/
http://housingpanic.blogspot.com/
http://thehousingbubble2.blogspot.com/
http://socalbubble.blogspot.com/
http://bighousingbubble.blogspot.com/
http://seattlebubble.blogspot.com/
http://www.nyhousingbubble.blogspot.com/
http://www.theburstingbubble.com/
http://www.piggington.com/
http://housebubble.com/
http://marinrealestatebubble.blogspot.com/
http://getforeclosures.blogspot.com/
http://bubblebobbleisthebestgameever.blogspot.com/


Please, raise the blogging interest rates or constrict the blog money supply now. The Irrational Blogbooberance must stop now.

Satan's Portfolio

Ethical and socially responsible investing has made a lot of buzz as a way of dollar voting for a better world. My instinct as an investor says that those fund flows are going the wrong way and their returns since inception back up my argument.

The more profitable questions to answer are: What does Satan invest in? How does he fund evil? Satan's Portfolio will track the perfomance of the stocks which Mephistocles is proud to put his money into, namely, companies who benefit from suffering, death, war, tobacco, nutrasweet and fraud.

Halliburton (ticker: HAL)

Satan's Investment Thesis: Chaos investment. Halliburton does best when the globe is at strife and their lucrative contingency support KBR subdivision can take advantage of the chaos and pad their high margins with fraud. Also benefits from a rise in oil prices which squeezes the poor into not being able to heat their homes (or something I don't really know as I heat my house with burned $20's). Yes, it's almost cliche to have this as the first entry into the portfolio, but within 5 minutes of my mentioning this idea to Juggles, our site's logs showed a visitor from Halliburton.com (Proof). Chilling.

Experian, a subsidiary of GUS Plc (ticker: GUS.L)

Owns credit services and affiliate marketing products which straddle the line between deceptive and fraud. Their division, lowermybills.com, is responsible for a significant portion of all pop-under ads. They target unsophisticated people who cannot discern the validity of their services -- their "customer" demographic is the poor, the in-debt, and the stupid. Experian is a pillar of the credit system of this country which is backwards, outdated and unfair. And I LOVE it. So does Satan.

Oracle (ticker: ORCL)

Satan's Words "I feel most comfortable putting my retirement money in a company whose CEO looks and acts like me."

Diageo (ticker: DEO)

Owns many of the world's leading liquor brands. I can personally thank Diageo for days of lost productivity, liver damage, and one pending divorce. Thanks Jose (Cuervo tequila) and Johnnie (Walker whiskey)! If Diageo can somehow acquire Jaegermeister, Satan will take out a 4th mortgage on Hell and ACCUMULATE. Diageo's only risk factor is its Responsible Marketing Plan. Hopefully, this is a smokescreen; in my opinion, they should consider taking some ads out on Nickelodeon. It is also not lost on Satan the fact that Diageo's ticker is the ablative and dative form of "Deus" in Latin.

Monsanto (ticker: MON)

A site called EthicalInvesting.com described Monsanto as the "World's Most Unethical and Harmful Investment." Satan's words, "back up the truck".

The Vice Fund (ticker: VICEX)

Satan is not afraid to say "I am a lazy bastard," so this fund which only buys assets of companies who profit off drinking, gambling, death, national defense and smoking is perfect for him. These are "recession proof" companies because people can't get enough Vice. It's 3 year performance is in the 1st Quintile of Lipper's Multicap Core Category.

We will continue to build the portfolio until we have added 666 securities. We have added a tracking portfolio on the sidebar of our new site, so that we can follow the performance of Satan'a Portfolio vs the socially responsible Pax World Balanced Fund (ticker: PAXWX, an investinng display of Evil vs Good. Check it out here (If anybody has better solutions for a free portfolio, or one that works with blogger email us). We know that Evil will win, because Good is stupid.

Melodrama and the Lifetime Channel

From across my Bloomberg.

Lifetime Networks, known for its tear-jerker television movies, is running newspaper and TV ads asking viewers to ``dump DISH'' after EchoStar Communications Corp.'s Dish Network dropped the channels.

.......

The campaign was expanded today following ads yesterday that said EchoStar is depriving women of critical information. A contract dispute forced EchoStar, the No. 2 U.S. satellite-TV provider, to pull the Lifetime and Lifetime Movie Network channels from its lineup, EchoStar said Jan. 1.

"We want to get back on the air at a fair and reasonable rate," [The Lifetime representative] said.

.....

Lifetime today ran radio, TV and print ads in cities including Orlando, Atlanta, Dallas and Houston. Yesterday's newspaper ads, two full pages side-by-side, told viewers to ``Take Back Your Lifetime!'' The letter to EchoStar Chief Ergen says that by removing the channels, ``millions of women will not get the inspiration and support they need and deserve.''

EchoStar's Cicero offered to broadcast, at his company's expense, any valuable information or public service announcements to its viewers that they are missing by not watching Lifetime.

Brilliant move by Cicero, knowing that there is nothing of value which Lifetime broadcasts. Other than that one movie about the mom who had an autistic anorexic daughter and then lost her husband to the flesh eating bacteria while she herself was fighting a rare form of eye cancer -- that one moved me.

Recommendation: EchoStar (ticker: DISH) is clearly short Melodrama. Maybe you should be too.

The Sell Side (A Continuing Series)

A colleague of mine was talking with the analyst of SellSide Bank who was syndicating a deal that we were taking a look at. The deal was brutal: It was a sub-$50mm EBITDA company that would have negative free cash flow in the short to intermediate term. We were being sold debt in their capital structure and the security would had limited exposure, at best, to any future upside of the company.

Faced with such a profile, poor ratings from S&P and Moody's, and a meager coupon considering the risk profile, what is a poor sell side analyst to do?

"Yeah I know, it's a tough profile. But let me tell you this. Give us 18 months, 18 months and we will take you home."

That's the sell side, baby.

We will take you home. I can just see an investor asking an analyst "Why did you buy that debt that traded down to 20 cents?" Well, SellSide Bank wouldn't have underwritten the deal unless they thorougly vetted it right? And the analyst told me he would take me home. "What about all the cash burn?" SellSide Bank put me at ease. Home is safe, I like home.

That's the sell side, baby.

Long Long or Long Short?

In the comments of Juggles' Titanium Cut Oatmeal post, a reader remarked about how Long or Short Capital has had declining post size and that he had downgraded us from "Read" to "Too Short." I thought for a second and looked back through our history of posts and saw that at first (before I was on board) posts were Short. So our roots are Short, but they did became Long and now they are shorter once again. Investment entertainment is a cyclical industry, what can I say.

This apparent contradiction in internal decision making actually illustrates our investing accumen. When it was sensible to be Long Short, we were, buying up Short at depressed multiples on rumors that Google was developing "Google Elongator," a disruptive technology that could make Short into Long thus increasing the value of all Short and creating a dominating vertical search platform. Later, an investing catalyst occurred completely changing the valuations, and according to our thesis, Long was relatively underpriced. Long or Short had no problem being flexible, and we set our sails Long Long. We have made a veritable fictional fortune trading in Long and in Short.

Consistency is the hobgoblin of the suboptimal investor who can't change his position for fear of contradiction. Never get married, especially to a position or a woman.

Recommendation: Long Long AND Short.

Do Trends Continue Forever: Nyet

Comrade Kaiser-

Nice reply on how Russia's recent successes will doubtlessly continue...forever. I mean what trend doesn't continue on unabated? That was the beauty of the investments my granpappy made in Argentina in 1925, it just kept on going up because where else would it go? And that time in 1979 that pa came home with a flatbed truck full of 1000oz silver bricks which he had bought at $30/oz. The fortune he made selling it all 10 years later (as the trend continued unbroken upward) allowed him to buy a hovercraft. And don't forget that time in the summer of '94, when I put my lifesavings in Russian bonds. I love the ruble!

The rule of "Trends Never End" rules. But shouldn't you look at the relative Russia investment situation now, and decide whether it's fairly valued or not, or whether there are inherent risks, such as the Russian proclivity for totaltarian rule or their love for vodka, that are not being fully considered or accurately built into prices?

-JD

Long or Short Capital Q2'06 Guidance and Dividend Update

After an incredible November, December was competely lackluster in terms of revenue generation, a decline in clicks from 30 to 11 and a lower CPC rate across similar levels of traffic. We still are on pace for our dividend guidance, but subscriberholder growth has cooled dampening our expectations for both revenue and dividend growth. Our Blogad revenue has been almost as much as our Yahoo ads at their current runrate which is disappointing to some degree. Our intuition suggests that the Yahoo ads should yield twice as much per impression given the incentivized nature of our subscriberholders. So far, ad clicks in our RSS feed have amounted to 3 in November and 2 in December, fairly negligible.

None of our content is hedged, so we are subject to the volatility of market prices for sourcing our posts, as our staff's time waxes and wanes. With that being said, we are optimistic that these trends will improve in January. Q2'06 ends on February 1st, 2006, so there is still some reason to be optimistic for a boost in production, dividend and revenue growth, and an acceleration in subcribers. Our slogan for the quarter is "Work hard. Be nice."

Product Idea: ATM/Slot Machine Combination

The market to provide slot machines is surprisingly innovative. Since the one-armed bandits went digital, the machine makers -- spurred by the casinos' incredible drive towards efficiency and profitability -- have added numerous features (graphics, sounds, videos, machines linked across casinos in order to increase payouts, frequent player clubs, ticket-in-ticket-out etc.) to their machines. They are much more reliable, profitable, and fun for the consumer than the average slot machine even two or three years ago.

Contrast that situation with the ATM. The functionality offered by the average ATM is not significantly greater than that offered two to three years ago. They are not faster or easier to use and they have always been fairly reliable. Meanwhile, the cost to the consumer has been increasing rather than decreasing (although, in fairness, this is probably not the fault of the actual machine manufacturers). Some ATMs used to offer stamps for purchase but that effort now appears dead. The ATM industry needs innovation.

Therefore, I propose the combination ATM/Slot Machine or the SLOTATM. In states where slots are legal, this machine will offer the ultimate in gaming entertainment and cash withdrawal services. It will have a number of new and innovative features including:

1. Consumers will be able to choose whether to withdraw the exact specified amount of money and pay a $2 ATM fee or they can instead elect to withdraw a randomly chosen amount between $95 and $125 and no ATM fee will be charged. Most consumers will get back ~$96-98 while a few winners will get more. Net net, the revenue generated by the machine will be greater than in a strict fee scenario but consumer satisfaction will increase because they will have paid for a gaming experience rather than ATM usage. [Note that traditional bells and whistles will go off as the random payout amount is being determined.]
   
   
2. Bank of America has over 16,000 ATMs and all of them are already linked. Any large bank could offer huge payouts by spreading the jackpot nationally across their network, Powerball-style.
   
   
3. Bank loyalty will increase and customer defections will decrease as consumers will not want to lose their frequent player points.
   
   
4. Consumers will receive more money withdrawal options. For instance, they will be able to specify "big bills" or "little bills" rather than having to accept whatever bills the machine happens to spit out. Is there anything worse than withdrawing $200 and receiving all $10 bills?
   
   
5. Long lines at convenience stores will be reduced as scratch ticket gambling addicts will instead line up to repeatedly withdraw money from ATM's.
   
   
6. Possible feature would be to have extreme outlier type events, say 1 out of 10,000 withdrawals gets twice as much money and 1 out of 10,000 gets zero. The zero payout outcome would be well known as "The Whammy" and all ATM's would hear the echoing cries of "No Whammy, No Whammy, No Whammy, No Whammy!"

It makes so much sense is there any reason that Alliance Gaming (AGI) and Diebold (DBD) can't get together and get this done?

Creativity Destruction: New Year Culling

Update: All culled posts are deleted as of 1/4/06.

We recently learned about how the Japanese make up the history in their textbooks so that little Japanese schoolgirls never have to learn things like that the Japanese wantonly murdered hundreds of thousands of Chinese in the Nanking massacre or that being able to buy used panties from a vending machine is pretty weird to human beings on planet Earth. Applied to the business of creating business humor online, we think this technique could help keep our own "Japanese schoolgirls" (our readers) from ever knowing the dozens of horrors we have created in failed posts.

Here is a list of Six Posts I'm deleting on Wednesday and specific reasons why they were failures.

Underground Toy Market Is Really a Front for Drugs -- No story there. No real business connection, no humor, little truth. Deep, you sucked on that one Bro.

Outsourcing My Thoughts On Outsourcing: Pt 2 -- Great concept but in practice worthless, as some readers pointed out (cruelly you cruel bastards). $40 poorly, even if interestingly, spent. Part 1 will remain, but part 2 is to be culled.

Internet Shadow Advertising Market -- More like Rotatebad.com. An idea is useless without support and execution.

Charity Pie Revenue Maximization -- Who gives a crap about pies? Or charities for that matter? To think, I spent time reading that that could have been spent managing the immigrants who wax my yacht. Next.

Will you replace BloggerSwap.com with the Choo-Choo's? -- I would rather raze the internet and salt the Earth with BloggerSwap's corpse than leave any mention of that hideous traffic scam existant on the Web.

The Difference Between Looting and Finding -- This came from a third party provider.

We just want our subscriberholders to know that Long or Short Capital acknowledges failure; then we destroy it.