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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9.3.06
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-
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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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8.3.06
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.
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- 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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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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7.3.06
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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6.3.06
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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5.3.06
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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"Accountancy was my life until I discovered Smirnoff."
-Vodka advertisement from 70's
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4.3.06
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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1.3.06
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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"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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28.2.06
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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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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27.2.06
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):
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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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25.2.06
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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Here is the code: Link to Google Search Module Code
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24.2.06
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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23.2.06
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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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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22.2.06
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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20.2.06
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.
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- Rent-A-Center (ticker: RCII)
- Rent-A-Center targets the least educated and poorest American demographics and sells them rapidly...
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18.2.06
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
Follow Our Initial Public Offering
17.2.06
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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16.2.06
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
Read French
14.2.06
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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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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13.2.06
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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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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12.2.06
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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-Leon Trotsky
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11.2.06
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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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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10.2.06
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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8.2.06
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"
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Article contributed by "Female to be Named Later"
6.2.06
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
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
5.2.06
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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2.2.06
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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"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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1.2.06
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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31.1.06
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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30.1.06
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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28.1.06
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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26.1.06
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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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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25.1.06
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.
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.
24.1.06
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?).
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?).
23.1.06
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.
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%.
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%.
22.1.06
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
21.1.06
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.
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.
20.1.06
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.
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.
19.1.06
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.
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.
17.1.06
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.
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.
12.1.06
Melodrama and the Lifetime Channel
From across my Bloomberg.
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.
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.
11.1.06
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.
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.
10.1.06
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.
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.
6.1.06
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
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
5.1.06
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."
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."
3.1.06
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:
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:
- 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.]
- 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.
- Bank loyalty will increase and customer defections will decrease as consumers will not want to lose their frequent player points.
- 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?
- Long lines at convenience stores will be reduced as scratch ticket gambling addicts will instead line up to repeatedly withdraw money from ATM's.
- 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!"
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.
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.
26.12.05
New Product Idea: Titanium-cut Oatmeal
Most fancy restaurants and hotels offer steel-cut oatmeal. But, last time I checked, steel is not that hard a substance. On the absolute hardness scale, it rates an 80 or 90 as compared to 1600 for a diamond. Until I can feel diamond dust in my bowels, there's good money to be made in oatmeal.
16.12.05
Exotic Plush Pillowmakers Upgraded to Maybe Buy
Continuing with our earlier analysis of a potential pillow pair trade, our staff has recently upgraded our position on exotic plush pillow makers from "Do Not Buy" to "Maybe Buy." Reasons for the upgrade include strong YOY growth in plush pillow sales volume, especially in the very competitive food facsimile space, despite tough comps as well as the broadening demand as people recognize the excellence of novelty plush. It doesn't hurt that Kaiser sleeps on this every night.
Hamburger Pillow:
Recommendation: We maintain our "Long" rating for pillow makers with emerging market focus, and our "Short" rating for domestic pillow makers, while upgrading Exotic Plush Pillows to a "Maybe Buy."
Hamburger Pillow:
This is the biggest Cheeseburger ever! With this big Cheeseburger pillow, whether you are watching TV or taking a rest, it will provide you with the best comfort! It is very soft and cuddle! There are cheese, lettuce, and beef inside.
Recommendation: We maintain our "Long" rating for pillow makers with emerging market focus, and our "Short" rating for domestic pillow makers, while upgrading Exotic Plush Pillows to a "Maybe Buy."
13.12.05
Incredibly True Quick Serve Restaurant Truths
The CFO of Burger King is named Cedric Burgher. Link BK CFO. This incredibly true turth is even more incredible when you come to grips with the fact that the suffix for Burger King employee emails is @whopper.com.
The founder and CEO of McDonald's is not the Hamburgler as some people mistakenly presume. Although, it is true that he did attempt to "hamburgle" McD's in a failed early 1980's LBO.
The founder and CEO of McDonald's is not the Hamburgler as some people mistakenly presume. Although, it is true that he did attempt to "hamburgle" McD's in a failed early 1980's LBO.
6.12.05
JD's Favorite Soup Recipe
1) Order cheese pizza from your finest local supplier.
2) Put it in a bowl.
3) Eat with spoons.
Serves 2.
2) Put it in a bowl.
3) Eat with spoons.
Serves 2.
5.12.05
Monopoly Board Game: Playing with Real Money and a Developed Capital Market
How does one play Monopoly with real money and a functioning capital market with an an interest rate based on the "Trip Around the Board" unit of time all the while maintaining the quirky board specific events?
This is our project.
Long or Short Capital has established these preliminary rules following our initial dilligience.
Long or Short Capital will continue to revise the game by thinking "Big Thoughts" and by listening to input from both readers and the illiterate, until a proper Capital Market Monopoly Board Game (CMMBG) has been resolved. Then we we will host a game. Possibly online and to a flurry of lawsuits.
This is our project.
Long or Short Capital has established these preliminary rules following our initial dilligience.
- The game should use some set a ratio as an exchange rate of dollars to monopoly dollars as an initial buy-in. Players should not be able to exchange money in or out of the game until the game is finished.
- Players would have to start with very little money forcing them to have to raise capital for anything but the most marginal investments.
- All asset transactions as well as mergers are permitted, with the stipulation that terms under which all transactions occur are upheld and honored.
- There should be at least 6 players, 2 of which will be bankers (see below).
- The game would definitely need one permanent banker, perhas two to prevent monopolistic banking practices. The bankers would have to be judged by the same scale as the players --profits generated through savvy banking. The wrinkle is that you would probably have to judge one banker's profit making against the others.
- Game Duration: Time delimited or turn delimited or until one player has a made amount of money or until only one non-banker player is left standing?
Long or Short Capital will continue to revise the game by thinking "Big Thoughts" and by listening to input from both readers and the illiterate, until a proper Capital Market Monopoly Board Game (CMMBG) has been resolved. Then we we will host a game. Possibly online and to a flurry of lawsuits.
4.12.05
Are Diamonds Marketed at the Idiot Demographic?
Say Forever I Do with an uncut bag o' diamonds "mixed with the natural elements they are found." Perhaps the missing link from diamonds to the Idiot Demographic.
2.12.05
Счастливого отпуска!! or Is Russia A Place to Invest or a Place to Fear?
This will be a point/counterpoint analysis. Kaiser, unbeknownst to him until now and fresh off a trip to Germany, will supply the counterpoint.
A common investing theme is that Russia is the place to put your money. Why?
Burgeoning middle class!!
Favorable demographics!!
Heavily educated human capital base from which to draw!!
More oil than T. Boone Pickens!!
Business friendly, and otherwise unfriendly, Dictator Tsar General-Secretary President Putin!!
Tradition of outlining and executing 3-5 year plans!!
Tradition of strongly protected property rights, economic openness and political stability!!
Literature with greats like Aleksandr Solzhenitsyn!!
And for the kids...GULAGS!!
Well sorry to be the turd in the blinchiki but Russia is jockeying to try and do the only thing they know to try and do: nuke the USA and rule the world. They don't care about economic openness. They don't care about working hard and they don't believe in capitalism. They want three things, in no specific order.
Vodka.
World Domination.
To do evil.
It is an entire nation which channels the ethos of lazy ammoral kleptocracy. When I was there 11 years ago, my main takeaway is that if there is one redeeming quality about Russia it is the null set. When I have studied Russia, it has seemed like a good place to be unhappy, or to be purged, or to be evil, or to die from nuclear fallout, or to have your loans defaulted on and your money swindled.
And Russia is not a place to invest money for these very same reasons. They don't have ethics. They refuse to live without corruption which would make a Chinese Judge blush. They are both willing and able to expropriate any foreign direct investment. And don't think they aren't still cooking up ways to drop Cuban paratroopes into small unsuspecting Coloradan towns.
Russia is a place to FEAR. Avoid buying stocks, bonds, derivatives and any other security or financial interest which are dependent upon Russian assets....Unless you look forward to waking up a year or two for now and opening your personal portfolio account and wondering "Hey where did my Gazprom go!" as you look at a 'Thank you Comrade' note signed "Sincerely, V Putin."
Recommendation: Ask your financial advisor about low cost index funds which track the Moscow Stock exchange. Then, "do not buy" them.
A common investing theme is that Russia is the place to put your money. Why?
Burgeoning middle class!!
Favorable demographics!!
Heavily educated human capital base from which to draw!!
More oil than T. Boone Pickens!!
Business friendly, and otherwise unfriendly, Dictator Tsar General-Secretary President Putin!!
Tradition of outlining and executing 3-5 year plans!!
Tradition of strongly protected property rights, economic openness and political stability!!
Literature with greats like Aleksandr Solzhenitsyn!!
And for the kids...GULAGS!!
Well sorry to be the turd in the blinchiki but Russia is jockeying to try and do the only thing they know to try and do: nuke the USA and rule the world. They don't care about economic openness. They don't care about working hard and they don't believe in capitalism. They want three things, in no specific order.
Vodka.
World Domination.
To do evil.
It is an entire nation which channels the ethos of lazy ammoral kleptocracy. When I was there 11 years ago, my main takeaway is that if there is one redeeming quality about Russia it is the null set. When I have studied Russia, it has seemed like a good place to be unhappy, or to be purged, or to be evil, or to die from nuclear fallout, or to have your loans defaulted on and your money swindled.
And Russia is not a place to invest money for these very same reasons. They don't have ethics. They refuse to live without corruption which would make a Chinese Judge blush. They are both willing and able to expropriate any foreign direct investment. And don't think they aren't still cooking up ways to drop Cuban paratroopes into small unsuspecting Coloradan towns.
Russia is a place to FEAR. Avoid buying stocks, bonds, derivatives and any other security or financial interest which are dependent upon Russian assets....Unless you look forward to waking up a year or two for now and opening your personal portfolio account and wondering "Hey where did my Gazprom go!" as you look at a 'Thank you Comrade' note signed "Sincerely, V Putin."
Recommendation: Ask your financial advisor about low cost index funds which track the Moscow Stock exchange. Then, "do not buy" them.
1.12.05
Piratery fka Piracy: Primer to Investing in Cutlasses, Rum and Pillaging
Pirates.
Piracy used to be an important industry providing raping and pillaging services for emerging market economies and sovereign states. Fine countries such as Trinidad and Tobago were built on the pirate economy. Can you imagine England if pirates hadn't been around? It would now be the United Kingdom of Mexico and London would be New Seville, had it not been for an enterprising fleet of bucaneers.
Pirate Opportunities
Over the past couple decades, shipping companies, luxury cruiselines and international boating have all seen large increases in net profits. However, there has not been a commensurate rise in piratery.
Piratery provides a compelling ROI for the entrepeneurial seaman. For an investment of $20-30k in a boat, some deckhands and rental cutlasses, a pirate captain can realize a 50-60% ROI in one year. Given the proper locale, of course. For example, the coast of Somalia is a competitive, if fragmented, market. See Somali Pirates Out of Control or Somali Pirates Free Ship After Month of Captivity or Pirates Attack Cruisership or the free daily paper's headline from yesterday simply titled "ARGH!" for more details.
But setting up a lair in a place like Isla Margarita, located off the northern coast of Venenzuela, would be an environment with relatively low piratery penetration but proximity to major cruiseline and OPEC oil routes. An added bonus, Isla Margarita is where non-pirate berserker Lope de Aguirre reached his crescendo.
You need to strike while the iron is hot and not be heedin any naysayers or scallywags. Piratery is your path to financial freedom. You'll be flying the skull & crossbones over a Jupiter, FL mansion in no time.
Recommendation: Depending on your investing horizon, commence pirate raids on commercial trading routes immediately or ask your financial advisor about low cost index funds which track the piratery index. Swig a few shots of Mount Gay, if need be.
30.11.05
Pillow Pair Trade
Long or Short Capital has completed extensive fundmental analysis of the pillow market. After surveys, studies, and focus groups a few conclusions have become obvious:
Pillows are most often used by consumers for sleep-assistance purposes although they can sometimes be used for back support and/or playful fights in sorority houses
The optimal Full Pillow Equivalent (FPE) to Human Head ratio is approximately 1.0x
Pillow pricing is directly proportional to the average number of frills per pillow as well as the number of fabric colors per pillow. Pricing is generally inversely correlated to the utility and comfort of a pillow.Some of these conclusions are surprising given the current state of the pillow market. For instance, in the US, FPEs per Human Head are running at almost 3.4x vs. the 1.0x optimal level. Note that this estimate includes almost 6 decorative pillows per household (or 1.2 FPEs). Meanwhile, FPEs per Human Head are approximately 0.1x in developing economies such as Malaysia and Zimbabwe and around 0.6x in China, the world's most populous country.
We feel strongly that these trends will converge in the long term with the US (and Europe, to a lesser extent) reducing their consumption of frilly, non-functional pillows and developing countries upgrading from rocks to pillows for head support. Our surveys of starving third world citizens find that pillows run fifth on desired items following only clean water, freedom, blond hair and Pampers for the kids. This presents an attractive investment opportunity.
Recommendation:
We are recommending a pair trade: Go long pillow makers with emerging market focus and short domestic pillow makers.
We feel strongly that these trends will converge in the long term with the US (and Europe, to a lesser extent) reducing their consumption of frilly, non-functional pillows and developing countries upgrading from rocks to pillows for head support. Our surveys of starving third world citizens find that pillows run fifth on desired items following only clean water, freedom, blond hair and Pampers for the kids. This presents an attractive investment opportunity.
Recommendation:
We are recommending a pair trade: Go long pillow makers with emerging market focus and short domestic pillow makers.
29.11.05
I Can't Agree More... Unless I Change These Words
People who decry the fact that businesses are in business "just to make money" seldom understand the implications of what they are saying. You make money by doing what other people want, not what you want.This is Thomas Sowell's succinct and accurate rebuttal to all those who decry the manifold splendor of capitalism and stuff. Amazing.
But this statement is equally true about monkeys throwing feces. Especially when I change the words.
People who decry the fact that monkeys who throw feces are throwing feces "just to throw feces" seldom understand the implications of what they are saying. Monkeys who throw feces throw feces by doing what other monkeys want, not what they want.
19.11.05
Sellout Saturday Dos
This post could have been titled "We tried to sell-out but Google wouldn't let us." Why wouldn't they let us? Because Google's Firefox referral is a complete abject failure -- we didn't get paid for any of our referred downloads. Live and learn. Bye Google referral, we'd rather invest our money in lime futures than waste sidebar space with your link.
This week we have better sell out. Adverts in our RSS feed. Yahoo finally has them and we're going to stick them in, and report the results one week from today. And you're going to love them because who doesn't love ads???
This week we have better sell out. Adverts in our RSS feed. Yahoo finally has them and we're going to stick them in, and report the results one week from today. And you're going to love them because who doesn't love ads???
17.11.05
Architecture and Tourists
I've often heard that you can spot tourists in NYC or San Fran because they are the ones staring up at the buildings. But I realized today that if you follow that advice, you always end up mistaking architecture students for tourists.
14.11.05
LongorShort Increases Quarterly Dividend to $1.50 Per Subscriber
Quarter-to-date performance has been excellent and revenue is growing in the low triple digits. The subscriber base has been growing at a modest rate, so Longorshort has exhibited significant dividend growth leverage. In conjunction with this dividend increase, management is also increasing the dividend share of revenue from 80% to 85%. Via my model, the implied current market capitalization of Longorshort is $12,545 and each subscriberstake is worth $193. To be fair, my model wasn't designed to analyze this kind of investment, but it is otherwise incredible in its brilliance and accuracy.
12.11.05
Sellout Saturday
Cash flow. We all know what it is. Everybody wants some. In light of our new Longorshort dividend policy, we need it. But how do we get it?
Simple. Sell out as much as possible. Each Saturday we will try and take it down a notch and whore ourselves in new and shameless ways. As part of the deal, the following Saturday we'll let you know how successful our greed was.
This week's sellout: Download the limited edition Firefox through the button on the top left of the sidebar. This only applies to people who don't have Firefox installed already.
You can put cash money in our pockets and make us rich beyond your wildest dreams. Don't know what the Firefox browser is and why it is good to use? Well we don't know either, but rumor has it that it turns html into gold and sends it directly into your bank account. Either that or it makes you 4 inches taller and 3x as smart.
Each time you download Firefox and install it, use it, and love it, Google issues us a single share in their company. Or gives us a dollar. We're unsure about that part.
Download it now before Google runs out of Firefoxes and has to make more.
Simple. Sell out as much as possible. Each Saturday we will try and take it down a notch and whore ourselves in new and shameless ways. As part of the deal, the following Saturday we'll let you know how successful our greed was.
This week's sellout: Download the limited edition Firefox through the button on the top left of the sidebar. This only applies to people who don't have Firefox installed already.
You can put cash money in our pockets and make us rich beyond your wildest dreams. Don't know what the Firefox browser is and why it is good to use? Well we don't know either, but rumor has it that it turns html into gold and sends it directly into your bank account. Either that or it makes you 4 inches taller and 3x as smart.
Each time you download Firefox and install it, use it, and love it, Google issues us a single share in their company. Or gives us a dollar. We're unsure about that part.
Download it now before Google runs out of Firefoxes and has to make more.
11.11.05
The Game Over Paradigm for News Reporting
This Marketwatch headline just caught my attention.
Game over for Chinese Internet game operators?
I have no opinion as to the veracity of that statement, but it got me thinking: why do these silly little journalists even bother hiding the fact that they don't actually do any sort of journalistic research? Instead they just take the subject matter for an article, figure out a pun title and and have a team of monkeys* fill the rest.
Do newspaper firms even do old-school style journalism anymore? Why not shift the paradigm overtly and stop paying lip service to research? Just report the world based on low hanging puns. Think of the brave new world we could create! Everything reported would be thin slice reactions based not on events but the visceral vocabularic responses which they inspire.
You wake up, put on your mumu and go straight to marketwatch.com to see the latest news:
RIMM results are Berry Good
Revlon Attempts to put a Good Face on Results
Caterpillar Demolishes Estimates
P&G Numbers Need a Swiffer Picker-Upper
SC Johnson Results Go Down the Drano
Analysts Examine ConAgra 3Q05 Net Income and Wonder: Where's the Beef?
Ipod Competition Seeks to Take a Bite Out of Apple
Investors are Stone Cold as WWE Wrestles With Declining Ratings
Rob Glaser Rhapsodizes on Real's Future
Lack of Toy Sales Spell 'Dr Doom' for Marvel
When I buy a newspaper company, or, more likely am handed one for free as I walk up from the subway, it's going to be amazing. Investors will thank me, ladies will love me. Truth is much harder to produce and less marketable than superficial entertainment.
Recommendation: A savvy private equity firm should pick-up some newspapers on the cheap and apply the Game Over Paradigm; it would be Game Over for the competition.
Mr Juggles advised on this article
Game over for Chinese Internet game operators?
I have no opinion as to the veracity of that statement, but it got me thinking: why do these silly little journalists even bother hiding the fact that they don't actually do any sort of journalistic research? Instead they just take the subject matter for an article, figure out a pun title and and have a team of monkeys* fill the rest.
Do newspaper firms even do old-school style journalism anymore? Why not shift the paradigm overtly and stop paying lip service to research? Just report the world based on low hanging puns. Think of the brave new world we could create! Everything reported would be thin slice reactions based not on events but the visceral vocabularic responses which they inspire.
You wake up, put on your mumu and go straight to marketwatch.com to see the latest news:
RIMM results are Berry Good
Revlon Attempts to put a Good Face on Results
Caterpillar Demolishes Estimates
P&G Numbers Need a Swiffer Picker-Upper
SC Johnson Results Go Down the Drano
Analysts Examine ConAgra 3Q05 Net Income and Wonder: Where's the Beef?
Ipod Competition Seeks to Take a Bite Out of Apple
Investors are Stone Cold as WWE Wrestles With Declining Ratings
Rob Glaser Rhapsodizes on Real's Future
Lack of Toy Sales Spell 'Dr Doom' for Marvel
When I buy a newspaper company, or, more likely am handed one for free as I walk up from the subway, it's going to be amazing. Investors will thank me, ladies will love me. Truth is much harder to produce and less marketable than superficial entertainment.
Recommendation: A savvy private equity firm should pick-up some newspapers on the cheap and apply the Game Over Paradigm; it would be Game Over for the competition.
Mr Juggles advised on this article
* People know monkeys for their proclivity for eating bananas and flinging their feces, but few know of the unparallelled productivity which a properly incented monkey is capable of. A few bananas go a long way
8.11.05
Outsourcing My Thoughts On Outsourcing: Part 1
I believe strongly in applying six sigma to everything, from ironing my dress shirts to creating this website. But, there is a limit to how much efficiency improvement I can squeeze out of my creative stone and past that limit I have to look to source my content from other channels, even overseas. Thus, my official position on outsourcing is brought to you by Jack from EZGone in New Delhi whom I hired through elance.com. He has has prepared a series of short speeches on outsourcing, which he has injected with humor, rhetoric and truth, according to my exacting specifications. What follows is Part 1. Read it aloud with a Brtish accent for maximum effect.
Outsourcing Outsourcing: What Is Outsourcing And Why It Is Growing?
Friends, I hope that I am not sounding vague to some of you. I know, I know most of my learned audience knows about outsourcing, but let me give it a try.
In purely religious terms, it could be seen as one of believers and non-believers. And both sides, there is no doubt in my mind, have very strong, logical arguments as why they are believer and non-believer.
Friends, at the outset, let me make clear to you that I belong to the camp of believers and I would like to focus on a crucial strand of this outsourcing business --- why it is great for firms who believe in outsourcing and actually do it.
The making of things was outsourced decades ago to foreign nations such as India, China, Japan, Philippines etc. Today, we Americans are hardly aware that most of the things that we see today around us, like our TVs, computers, cell phones, underwear, dentures, cartoons, financial analysis, investment advice etc., must come from somewhere, but we have no real clue who is making them, or how. We are really busy in hiking, trekking, vacationing or any other activities of our choice that we hardly get time to consider these things seriously, and perhaps, we have enough trouble figuring out how to remove the packaging.
Experts believe that even humor is being outsourced.
Perhaps, the modern day hip-hop youngsters won't believe this, but there was a time when Americans actually made physical things called "products" right here in America. Once upon a time, right here, workers would go to large grimy and encrusted buildings called "factories," where they would take a raw material such as iron ore and perform industrial acts on it, such as "forging" and "smelting" to make their own things. And, as you can easily imagine, by the end of the day, they smelt terrible (not perfumed) but they were satisfied that they had turned the ore into something useful, for example a bicycle.
But now, we don't make anything. Rather, we have learned, intelligently, how to get the things done at much lower cost and much faster speed. Credit, of course goes to outsourcing.
Outsourcing Outsourcing: What Is Outsourcing And Why It Is Growing?
Friends, I hope that I am not sounding vague to some of you. I know, I know most of my learned audience knows about outsourcing, but let me give it a try.
In purely religious terms, it could be seen as one of believers and non-believers. And both sides, there is no doubt in my mind, have very strong, logical arguments as why they are believer and non-believer.
Friends, at the outset, let me make clear to you that I belong to the camp of believers and I would like to focus on a crucial strand of this outsourcing business --- why it is great for firms who believe in outsourcing and actually do it.
The making of things was outsourced decades ago to foreign nations such as India, China, Japan, Philippines etc. Today, we Americans are hardly aware that most of the things that we see today around us, like our TVs, computers, cell phones, underwear, dentures, cartoons, financial analysis, investment advice etc., must come from somewhere, but we have no real clue who is making them, or how. We are really busy in hiking, trekking, vacationing or any other activities of our choice that we hardly get time to consider these things seriously, and perhaps, we have enough trouble figuring out how to remove the packaging.
Experts believe that even humor is being outsourced.
Perhaps, the modern day hip-hop youngsters won't believe this, but there was a time when Americans actually made physical things called "products" right here in America. Once upon a time, right here, workers would go to large grimy and encrusted buildings called "factories," where they would take a raw material such as iron ore and perform industrial acts on it, such as "forging" and "smelting" to make their own things. And, as you can easily imagine, by the end of the day, they smelt terrible (not perfumed) but they were satisfied that they had turned the ore into something useful, for example a bicycle.
But now, we don't make anything. Rather, we have learned, intelligently, how to get the things done at much lower cost and much faster speed. Credit, of course goes to outsourcing.
7.11.05
LongorShort Announces 1st Quarterly Dividend of $1.00
Pending the routine audit of our 1st quarter results, LongorShort plans to begin paying a quarterly dividend, using the cash generated by our hilarious operations to create value for our subscriberholders. The board considered a number of strategeric options including: a hostile takeover of Marginal Revolution, paying bums to advertise for us, and blowing all the cash on hookers and coke. Instead, we have decided to initiate a quarterly dividend of $1.
Our reasoning was simple: We realized that we value you, our readers, and now you will finally be able to value us. Literally. Assuming a $1 quarterly dividend, no growth, and an 8% discount rate, being a subscriberholder is worth $50.
Risks and Uncertainties
Our reasoning was simple: We realized that we value you, our readers, and now you will finally be able to value us. Literally. Assuming a $1 quarterly dividend, no growth, and an 8% discount rate, being a subscriberholder is worth $50.
- Who are your subscriberholders:
- Email and XML subscribers as of 10/28/05. These are the only readers we can reliably verify and who will be eligible for this quarter's dividend. Additionally, we feel that they are also the stickiest readers and we are big proponents of RSS usage. They have the largest stake in us.
- How does a subscriber collect a dividend:
- For Email Subscribers: Send an email to misterjuggles@gmail.com from your subscription email with your paypal address and we will send you $1. Cash money.
- For XML subscribers: Send an email to misterjuggles@gmail.com with the "Subsciption Verification Code" enclosed (you should have received a "magical word" on Sunday in our feed). Enclose your paypal address and we will send you $1. Cash money.
- All unused money will be reinvested back into the website.
- What about your next quarterly dividend:
- Our next quarterly dividend will be determined by the following formula. The lesser of $1 per subscriberholder or (80% of revenue) divided by the number of subscriberholders at quarter end. The latter formula would have yielded a $1.50 dividend, so the $1 dividend has quite a bit of cushion. After this quarter, we will require people to fulfill some sort of registration, as of yet undetermined, to be eligible. It shall be light.
- We will also revise up the dividend if our revenue per a subscriber improves; we will never revise down or suspend the dividend without a proxy vote of registered subscriberholders.
- Why are you doing this:
- We will be the first and only site to issue a dividend.
- This dividend cements our place among the elite internet companies. Please note that our quarterly dividend will be larger than that of Yahoo, eBay, and Google combined.
- It combines finance with the absurd.
- It turns our subscribers into stakeholders and incents them to grow our revenues, by bringing in traffic or driving themselves to our sponsors. We believe proper incentives can solve any problem, from internet site readership to global poverty. Hence our support of the Grameen Foundation.
- We obviously are not in this for the money so this is a much more appopriate use of the ad revenue.
- Numerated lists are pretty sweet.
- How do I become a subscriberholder:
- Use the buttons and forms at the top left to subscribe via email or XML. We recommend the latter, since Feedburner helped us with this process and we are totally long them.
Risks and Uncertainties
Neither the SEC nor any state securities commission has approved or disapproved of the subscriberholdership securities or determined if this prospectus is truthful or complete. As a subscriberholder, you are being granted Class B shares in LongorShort. You should probably realize that Class A shares (there is actually only one Class A share and it's held by Mr Juggles) have perfty-perf votes per share compared to 1.25 votes per share for Class B.
29.10.05
The Corporate Tarpit: MOVI
Dear Johnny,
What does it look like when a company sinks into the tarpit of its own obviated existence?
Investingly,
Your theoretical female reader
Dear Reader chick,
It looks like this.
-JD
Recommendation: Short Moviegallery, Long Mammals.
What does it look like when a company sinks into the tarpit of its own obviated existence?
Investingly,
Your theoretical female reader
Dear Reader chick,
It looks like this.
-JD
Recommendation: Short Moviegallery, Long Mammals.
27.10.05
Why Miers could never be part of the new SCOTUS.
Investment analysis trumps political analysis yet again. Conservative originalist lackeyish with a hint of espirit de redeconstructionalism? Like that matters when the woman can't dance.
Readers who read our reseach report on John Roberts and his familial ability to break-it-down knew that Miers' nomination was doomed because the woman clearly can't shake it herself and lacks any rug-cutting progeny. FYI to Harriet: the new court will hopping and if you aren't getting down, you ain't getting in.
Recommendation: Potential SCOTUS nominees should consider buying a dance pad and practicing in the confines of their own home.
Readers who read our reseach report on John Roberts and his familial ability to break-it-down knew that Miers' nomination was doomed because the woman clearly can't shake it herself and lacks any rug-cutting progeny. FYI to Harriet: the new court will hopping and if you aren't getting down, you ain't getting in.
Recommendation: Potential SCOTUS nominees should consider buying a dance pad and practicing in the confines of their own home.
25.10.05
Investing in Public Equities is Like Dating
I would like everyone to know that I am writing a future best-selling series of business books. It will be a syndicated series, kind of like Chicken Soup for the Soul. You know, first it was Chicken Soup for the Soul, then it was Chicken Soup for the Teenage Soul, then Chicken Soup for the Deaf Prostitute's Soul, then the ground-breaking, recursive Chicken Soup for the Chicken's Soul. My series will be similar and follow the formula Investing in Public Equities is like [Blank].
The first edition will be Investing in Public Equities is Like Dating. Here's the idea: During one of the many rocky periods in a particular personal relationship, I remember asking my parents (married for 25 years) whether or not they had ever gone through tough times when they were starting out. Their basic answer: Relationships, despite what your girlfriend just told you, aren't supposed to be "work." "Work" is supposed to be "work," hence the name. When a relationship is right there won't be a lot of analyzing, discussing, and dissecting every aspect of the relationship as if it's a third, independent entity.
Now the reason I think relationships are a particularly good analogy for investing is that it's just as tough to know when you should cut your losses in a stock as it is when things go south with your girlfriend. You’ve been through a lot and there’s a shared history; is there something fundamentally wrong or are you just being impatient/unreasonable/(insert common male or investor characteristic here)? Finding an investment thesis is at least as hard as going back to dating, and you never want to bail on a good idea early. So ask yourself: the stock isn’t working but is this a healthy argument with your future wife or maybe you and the stock are fighting again because things just aren't right between the two of you. Does the stock want you to "work on it" or "pay attention to its needs" more often? These are probably signs you should set cut that stock loose.
But don't think it'll be easy. The day you finally give up on that stock - it'll go up 5%, just like your ex-girlfriend will wear a short skirt and slut herself around showing you how many other boys like her. But your better off man, you are way better off.
Recommendation: Long book writing, short dating.
The first edition will be Investing in Public Equities is Like Dating. Here's the idea: During one of the many rocky periods in a particular personal relationship, I remember asking my parents (married for 25 years) whether or not they had ever gone through tough times when they were starting out. Their basic answer: Relationships, despite what your girlfriend just told you, aren't supposed to be "work." "Work" is supposed to be "work," hence the name. When a relationship is right there won't be a lot of analyzing, discussing, and dissecting every aspect of the relationship as if it's a third, independent entity.
- In fact, finding a promising investment thesis is similar to meeting a new girl who might be dating material. Examine the similarities:
Dating: - Is she truly interesting? Can she take a joke? Does she come from a decent family (i.e., just how crazy will she be later in life)? Is she good looking all the time or only in dark bars? What do your friends think of her?
- Investing:
- Does the management team know what they’re doing? Does the company have sustainable barriers to entry in their key businesses? Is the company well positioned for the next 3-5 years? What do the company’s customers and suppliers say?
- Sometimes -- ok, a lot of times in Mr. Juggle's case -- things just won't feel right even when the answers to most of these questions are positive. Just as a relationship can lack chemistry, a stock can look promising in theory but fail to perform. You will find yourself constantly justifying the stock to your friends, talking about how great the company is and how the chart is smiling at you. And much like your first relationship that you dragged on far too long, you'll be tempted to "work through it" and stick around. Again, examine the similarities:
Dating: - I'll put more effort in our relationship... Ok, I'll try to change... I'm sorry...
- Investing:
- There was no operating leverage but we'll see it next quarter for sure... They've assured me they have the financing in place.... The investment period is almost over...Management has a lot of "skin in the game"....
Now the reason I think relationships are a particularly good analogy for investing is that it's just as tough to know when you should cut your losses in a stock as it is when things go south with your girlfriend. You’ve been through a lot and there’s a shared history; is there something fundamentally wrong or are you just being impatient/unreasonable/(insert common male or investor characteristic here)? Finding an investment thesis is at least as hard as going back to dating, and you never want to bail on a good idea early. So ask yourself: the stock isn’t working but is this a healthy argument with your future wife or maybe you and the stock are fighting again because things just aren't right between the two of you. Does the stock want you to "work on it" or "pay attention to its needs" more often? These are probably signs you should set cut that stock loose.
But don't think it'll be easy. The day you finally give up on that stock - it'll go up 5%, just like your ex-girlfriend will wear a short skirt and slut herself around showing you how many other boys like her. But your better off man, you are way better off.
Recommendation: Long book writing, short dating.
22.10.05
Lending No-No Update
The stock secured loan to Phillip Bennett mentioned in my Lending No-No article was, in fact, unhedged, according to this RefCo article in the Journal.
Given what should have been known by the lender, that may have been the worst loan in modern Western World history. At some point, I'm going to have take nominations for worst loans ever. I would definitely count the 57 different Chinese banks that lent money to one guy (which he used to speculatively buy apartments in Hong Kong) as one loan.
The Refco stock Mr. Bennett pledged as collateral for the loan is now nearly worthless, damaging Bawag's own financial situation. Earlier this week, ratings firm Moody's Investors Service said the loan exposure represents a material proportion of the bank's core equity and more than two times Bawag's estimated 2005 earnings. Moody's is concerned that the potential loss content of this exposure could negatively affect the bank's capitalization."
Given what should have been known by the lender, that may have been the worst loan in modern Western World history. At some point, I'm going to have take nominations for worst loans ever. I would definitely count the 57 different Chinese banks that lent money to one guy (which he used to speculatively buy apartments in Hong Kong) as one loan.
17.10.05
JD's Lending No-No's: #1a and #1b
Juggles has his investment commandments, I've got my Lending No-No's, and it's all you need to manage the risk in your debt investments.
- Lending No-No #1a: Consider the collateral. Never take stock as collateral for a loan if it's offered by the CEO of a company who is at the center of a multi-billion dollar securities fraud.
Examples: - The ongoing Refco (Refco) Securities Fraud Stock Scandal hinged on CEO Phillip Bennett's status as an unreported debtor of $430mm to the company. When this came to light on Monday, Bennett repaid the $430mm with cash money. Where did he get this cash money from? Per this NY Post article:
On Monday, Bennett paid back the $430 million plus interest by pledging 43 million Refco shares in return for a loan from The Bank for Arbeit and Wirtschaft AG in Austria.
The Bank for Arbeit and Wirtschaft committed a classic lending no-no and forgot to consider the collateral. It is likely they hedged their position but it was still a bad loan.
Update: The $430mm loan was unhedged. Probably the worst loan ever. - Lending No-No #1b: Consider the collateral. That trademark which is part of your security package? If you ever need it, it will have no liquid value.
Examples: - Frequently, companies with trademarks will include them as collateral in loans. So a company such as The Gap Stores would hire a third party to perform a valuation of their brand and come up with a figure say $XYZmm dollars. We all know that $XYZ dollars is a lot of money, but that brand's value is really only a barometer for how well the company's stores are doing. If you ever needed to sell that trademark to make a recovery on your high yield bonds or whatever paper you foolishly hold, you can expect to get $XYZmm - $XY0mm for it. That would leave you with just $Zmm left over (see our earlier research on $Z); you can't win with math like that, which is why you always have to consider the collateral.
14.10.05
Discuss: Riding Segway Doubles Firm's Stock Price
That picture of Amazon CEO Jeff Bezos was taken in November 2002. How do you reconcile that with this AMZN Stock Perf Chart:
Discuss.
Edit 10/17: Kaiser sent me this picture which may show that riding the Segway produces a similar reaction in Bezos as staring down Anna Kournikova. If you notice, it's quite possible that he is riding a segway in that shot. That is the beauty of the segway, you just never can tell.
13.10.05
Companies I Hate (continued)
A number of online photo companies have recently been threatening to delete my photos if I don't make a purchase. For instance, I received the following in an email from Kodak Easyshare:
Recommendation: Short Kodak. Short bad customer service. Short automated responses.
We're happy to store all your memories at the Kodak EasyShare Gallery, but because you haven't made a purchase in the last 12 months, we may begin deleting stored images from your account. Don't risk losing your photos!Maybe I'm the exception but deleting my photos doesn't qualify you for my bi-annual "happy to store your memories" award. In fact, I will probably send you an email telling you that I never plan to use your service again. Here was their response:
Thank you for contacting the KODAK EASYSHARE Gallery Customer Service Team.What a followup! Thanks for emailing me to tell me you won't be responding. And what, pray tell me, is the purpose of a customer service email if no one checks it!?! I appreciate your attention to my concerns; I will never purchase another Kodak product as long as I live.
We wanted to let you know that we've just received your message. A Customer Service representative will not respond to this email. [My emphasis]
Recommendation: Short Kodak. Short bad customer service. Short automated responses.
12.10.05
About that $430mm Accounts Receivable owed from me...
....was that uncool?
Full disclosure to our readers; I actually owe Long or Short $430mm. In a confidence business such as the delivery of genius, our customers (you) have to be worried about whether our lack of internal controls will affect the delivery of future content, or if this will delay or otherwise hinder the release of my next set of Investing Commandments. Rest assured that this kind of thing is totally cool because we all do it. I asked our internal auditors about it and they actually used the phrase "Dude, that's totally cool."
According to these same auditors, the whole Refco (ticker: RFX) stock thing is totally overblown, and Tyco's internal controls were "wicked awesome," so our controls are probably pretty good. In light of this, we rate our own stock as market outperform. Go long the equity, but be sure to short the bonds.
Recommendation: SOX rocks!, long white collar prison sentences, short "the bonds" and private equity's due dilligience
PS if this post was incomprehensible, start here.
Full disclosure to our readers; I actually owe Long or Short $430mm. In a confidence business such as the delivery of genius, our customers (you) have to be worried about whether our lack of internal controls will affect the delivery of future content, or if this will delay or otherwise hinder the release of my next set of Investing Commandments. Rest assured that this kind of thing is totally cool because we all do it. I asked our internal auditors about it and they actually used the phrase "Dude, that's totally cool."
According to these same auditors, the whole Refco (ticker: RFX) stock thing is totally overblown, and Tyco's internal controls were "wicked awesome," so our controls are probably pretty good. In light of this, we rate our own stock as market outperform. Go long the equity, but be sure to short the bonds.
Recommendation: SOX rocks!, long white collar prison sentences, short "the bonds" and private equity's due dilligience
PS if this post was incomprehensible, start here.
7.10.05
Short Crazy Cabbies
"It's great to be back in the cab. First day back since my license got taken away."
-heard as I got in a taxi yesterday
He was a 55yo drugged out looking cabbie, and he managed to get me to the BCBG Max Azria investors' meeting, while talking to himself and with his mood oscillating between jubilation and severe angritude. I survived, but I wouldn't buy stock in the likelihood that all his passengers survive.
Recommendation: Short insane people driving me places.
-heard as I got in a taxi yesterday
He was a 55yo drugged out looking cabbie, and he managed to get me to the BCBG Max Azria investors' meeting, while talking to himself and with his mood oscillating between jubilation and severe angritude. I survived, but I wouldn't buy stock in the likelihood that all his passengers survive.
Recommendation: Short insane people driving me places.
5.10.05
Fertilizer and Fighter Jets
Scotts Miracle-Gro is a manufacturer/marketer of branded lawn and garden products. You would probably recognize some of their brands like Scotts, Miracle-Gro and Ortho as stuff you put on your lawn. Their CEO Jim Hagedorn (who owns a ton of the stock), is a retired Air Force pilot and is wont to ramble. In his closing remarks at last year's Investor/Analyst Day, he created an epic meditation on fertilizer, the power of greed and war:
Recommendation: Long inappropriate analogies
-JD
ps. As an investor, this is a pretty stock chart.
"I didn't get out of flying fighters to be a fertilizer salesman. I got out of fighters because I think it's a more pure form of conflict here."I don't disagree.
"It's like the purest form of conflict in that like nobody really dies, but think how many volunteers you'd have if you could go over to Iraq and you could take all the money you could find?"Perhaps becoming President or at least Secretary of State would be an even purer form of conflict than the fertilizer business, because we need to get these ideas into policy ASAP.
"This is what it's like! I really like this business. I may be scaring you, I'm sorry."No, not at all. We already said how much we agree, Jim.
"But think about it! We get encouraged to basically compete -- it's a good thing. It's okay to win. It's okay to take market share which is just real estate -- it's imperialistic."This is exactly the kind of CEO I want in charge of a $2bn revenue, $300mm EBITDA, $2.5bn market cap company. He should also own ~40% equity in the company. Thankfully, he does, that financial imperialist son-of-a-gun.
Recommendation: Long inappropriate analogies
-JD
ps. As an investor, this is a pretty stock chart.
4.10.05
Just Heard in My Morning Meeting
"They're doing ok in pickles, getting their ass kicked in fish"
First person to name the company being talked about gets a link in this post. Update: Mara was the first to name the company and here is her link which you must click.
Recommendation: Long pickles and Mara, short fish.
Smooches,
JD
First person to name the company being talked about gets a link in this post. Update: Mara was the first to name the company and here is her link which you must click.
Recommendation: Long pickles and Mara, short fish.
Smooches,
JD
3.10.05
Department of Redundancies Department
Legalese always contains redundancies but the findings by IPG's accountants in their recent restatment take this to a new level. The accountants listed 18 areas of weakness needing improvement including:
"1. The Company did not maintain an effective control environment.
18. The Company did not maintain effective controls over monitoring the performance of proper application of the Company’s internal controls over financial reporting and related policies and procedures."
Keep in mind that these comments all appeared in the section devoted to the assessment and identification of weakness in controls.
In fairness to the flight attendants whom I maligned in my last post, accountants shouldn't be considered professionals either. The section on controls is one big CYA move.
Keep in mind that these comments all appeared in the section devoted to the assessment and identification of weakness in controls.
In fairness to the flight attendants whom I maligned in my last post, accountants shouldn't be considered professionals either. The section on controls is one big CYA move.
30.9.05
Is a Flight Attendant a Professional?
Kaiser inadvertently raised another point in his post (below). When did flight attendancy become a profession? Yes, the word can be used in a broad sense but doesn't a "professional" usually hold as an occupation requiring specialized training? Lawyers, doctors, scientists; those are people you can call "professionals." Flight attendants are (sometimes) lovely people but last time I checked they didn't have to attend graduate school, pass any grueling exams, or even show me how to buckle my seat belt now that they have those new-fangled TV screens.
Recommendation: Short unions and pretension, in size.
Recommendation: Short unions and pretension, in size.
29.9.05
Judge Shows Investment Savvy
From the NYPost:
September 28, 2005 -- AMERICA'S first black female billionaire just got remarried. Sheila Johnson, the ex-wife of BET founder Robert Johnson, tied the knot with Judge William Newman at her Salamander Farm in Middleburg, Va., on Saturday. Newman met Johnson when he presided over her 2002 divorce case against Robert, her husband of 33 years. Newman's decision evenly split the $3 billion Johnson netted after Viacom bought BET.I have to give credit where it's due. This judge ruled over a divorce case involving a billionaire, split the $3bn evenly, and then marries the now-divorced-but-also-a-billionaire woman? Wow. That's how you use the law to your investing benefit.
28.9.05
Mr Juggles Investing Commandments (#1 & #2)
People often ask me, "Mister Juggles where should I invest?" or "How should I decide whether to buy Company X's stocks, bonds, options and exotic derivatives?" To that end, I have decided to create a list of investment rules that will allow readers to quickly qualify or rule out certain companies as potential investments. This process will continue over time as these rules come to mind.
Note: Rules are not ranked in order of importance.
- Rule #1: Avoid any company if the company's CEO responds to a legitimate question with profanity and/or personal attacks. This applies double if the profanity occurs during a quarterly conference call. Consider shorting the stock or buying out-of-the-money put options.
Examples: - Patrick Byrne (Overstock) responded to certain allegations by a research firm suggesting that the authors should be "be beaten, f---ed, and driven from the land."
- Jeff Skilling (Enron) swore at an analyst who asked why Enron couldn't produce a balance sheet and cash flow statement along with the income statement at the time of the quarterly conference call.
- Rule #2: Avoid companies that engage in transactions wildly unrelated to their core business.
Examples: - When Delta filed for bankruptcy both EDS and Disney disclosed writedowns related to aircraft leasing arrangments with Delta. EDS is a business process management company and Disney, of course, offers media and family entertainment. Neither company should, despite their disclosures of the leases, be in the business of aircraft leasing. Last time I checked the synergies between running a company that creates animated films for the pre-K set and vetting leasing arrangements with bankrupt companies were fairly low.
Note: Rules are not ranked in order of importance.
26.9.05
Pronk market outperform; Papa Grande overweight
"Pronk" is the nickname of Cleveland Indians star 1B/DH Travis Hafner, while "Papa Grande" is the nick of Diamondbacks reliever/closer Jose Valverde. Hafner's has the edge since someone called him "part project, part donkey" and that stuck as "Pronk." It also happens to be MY nickname....in bed.
Baseball nicknames hit a trough in the late 90's but are inherently cyclical, so slip some capital into the sector. I doubt we'll see the halycon days of "Death to Flying Things", but it looks like a decent bet to provide solid returns in a tough investing climate.
Recommendation: Long Pronk, Papa Grande, Baseball Nickname sector
Baseball nicknames hit a trough in the late 90's but are inherently cyclical, so slip some capital into the sector. I doubt we'll see the halycon days of "Death to Flying Things", but it looks like a decent bet to provide solid returns in a tough investing climate.
Recommendation: Long Pronk, Papa Grande, Baseball Nickname sector
23.9.05
Cockpit Humor United
From the captain on a recent flight:
"Thank you for flying United. We know you have your choice of bankrupt carriers and we appreciate your choosing United."
Nice work United captain! Color me amused. I hereby pledge to help alleviate your company's fiscal situation and fly United on my next journey as long as you offer me the lowest price.
"Thank you for flying United. We know you have your choice of bankrupt carriers and we appreciate your choosing United."
Nice work United captain! Color me amused. I hereby pledge to help alleviate your company's fiscal situation and fly United on my next journey as long as you offer me the lowest price.
Learned/Heard/Seen This Week at BofA Conference
• After seeing that clip, I wish I was in the virtual ammunition business.
• Guy with a button on the back of his collar. The dress shirt equivalent of the superfluous third nipple.
• I have been replaced by my wife's scottish terrier.
• We looked at Meow Mix, but we passed because we didn't think we had the platform for it. But then, neither does Cypress [private equity shop who bought MM], but what do financial guys know anyways. [pause] Don't tell them I said that.
• You can have a cup of Starbucks, or you can clothe your child.
• Buy our bonds, short our stock, try some capital structure arbitrage!
• Everyone from Lord Abbett seemed to be over 70 and at least part troll. Picture the last scene in Rosemary's Baby. Now picture everyone who wasn't John Cassavetes or Mia Farrow or the antichrist. Those are the people managing money for Lord Abbett.
• Puppie adoptions were up 40% after 9/11.
• My hunch is that there were far more people from Bank of America at the Bank of America Equity Conference than people not from BofA; the ratio of suits to non-suits speaks to this. Who wears a suit to a business casual conference?
Points are awarded to who can attribute which thing to which session. Note that we only have 14 points. Also note that not all points are equal.
-JD
• Guy with a button on the back of his collar. The dress shirt equivalent of the superfluous third nipple.
• I have been replaced by my wife's scottish terrier.
• We looked at Meow Mix, but we passed because we didn't think we had the platform for it. But then, neither does Cypress [private equity shop who bought MM], but what do financial guys know anyways. [pause] Don't tell them I said that.
• You can have a cup of Starbucks, or you can clothe your child.
• Buy our bonds, short our stock, try some capital structure arbitrage!
• Everyone from Lord Abbett seemed to be over 70 and at least part troll. Picture the last scene in Rosemary's Baby. Now picture everyone who wasn't John Cassavetes or Mia Farrow or the antichrist. Those are the people managing money for Lord Abbett.
• Puppie adoptions were up 40% after 9/11.
• My hunch is that there were far more people from Bank of America at the Bank of America Equity Conference than people not from BofA; the ratio of suits to non-suits speaks to this. Who wears a suit to a business casual conference?
Points are awarded to who can attribute which thing to which session. Note that we only have 14 points. Also note that not all points are equal.
-JD
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