Archive for January, 2006

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.” Our new price target of “Infinity-1” reflects a deceleration of the growth in online CPC advertising, the saturation of search engine advertising and increased traction of the idea that Eric Schmidt had the easiest path to billionaire status in history. Google’s stock should now be seen as a “Key Long Term Holding” rather than a “Core Long Term Holding.”


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.

What if the Fed stops raising rates? Will we see a rapid decline in the dollar denominated Cephalopod index as foreign banks pull their investments out of dollars and move into safer currencies like the Baht or Flooz? And more importantly, what will happen to the Cephalopod Index?

Putting your 401k in inhabitants of the deep seas can make even stalwart investing professional as ourselves ripe with anxiety. This will put you at ease. In this video a Giant Pacific Octopus (yes the same type that killed the shark in our earlier analysis) either dominates a submarine or tries to copulate with it, all while writing the great Octopus novel with a spare tentacle. We think it answers all relevant questions as to the fundamentals the Cephalopod index.

Recommendation: For investors with a higher risk profile, we recommend investing directly in the Giant Pacific Octopus, even though it is trading near its 52 week highs at $74.06. We appreciate the diversification provided by the Cephalopod index, but if we had to put our cephalopod eggs in one basket, that basket would be the Giant Pacific Octopus. It is not only blowing away the relevant operating metrics, it is actually destroying and/or eating its submersible competition.

(Thanks to collision detection, the only place that loves the Octopus as much as I do)


Posting Halted: Excessive Volume

After almost two weeks of daily posting (henceforth to be referred as “excessive 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 how much Long or Short paid for his sunglasses. Irregardless, we are halting this post 20 words early and will halt posts early all week until this problem is resolved.


Quotes Entirely Completely Relevant to Investing

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

-Iron Robe Yim


Sellout Saturday: Fiscal Q2 Ends Within the Week

Subscriberholders are locked in; moneys to be distributed aswell as a new “In Kind”non-monetary payment.Email subscribers we have your email; RSS subscribers got secret squirrel messages. Glee abounds. Our future is bigger than LiveDoor.


Halliburton Loves that Dirty Water

This is why investing in evil is so profitable.

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

“We [Halliburton’s contingency support subsidiary KBR] exposed a base camp population (military and civilian) to a water source that was not treated,” said a July 15, 2005, memo written by William Granger, the official for Halliburton’s KBR subsidiary who was in charge of water quality in Iraq and Kuwait.

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

“It is my opinion that the water source is without question contaminated with numerous micro-organisms, including coliform bacteria,” Carter wrote. “There is little doubt that raw sewage is routinely dumped upstream of intake much less than the required 2 mile distance.”

With today’s news (via MarketWatch):

Halliburton Co. stock hit an all time high Friday after the company reported more than $1 billion in fourth-quarter net income and said it plans to soon file for an IPO of its KBR unit.

Raw Sewage. I LOVE it. And so do investors. That water has some seriously high margins. In evil theory, you could get paid for taking the waste AND again for repackaging it as water.

Recommendation:: We continue to like companies that special in oil services and evil per our Satan’s Portfolio investment thesis. Long Halliburton.


Long Sluts and Short Strippers

Well, it’s been a while since I’ve posted and that’s because I’ve been entrenched in some serious due diligence on mankind’s oldest profession: prostitution. While the nationwide debate over legalizing prostitution continues, one thing remains clear, the supply-demand economics around sluts show that the services they offer are priced significantly below fair value. To better understand this mis-pricing let’s analyze supply and demand.

Now, the demand for girls who are willing to have sex with me is infinite and as a result the market is in a state of hopeless under-supply. This should lead to perpetual upward pricing pressure, however, unexplainably, the market rate for a slut’s time is surprisingly low. In fact the price of a slut per hour is actually 30-40% less than the price of a stripper, and there’s no doubt which of the two provides a more complete service.

This unexplainable price structure creates an enormous consumer surplus (email me for graphs), and an obvious pair trade.

Recommendation: I view the price of sluts as unsustainably low and therefore am Long them. Keep in mind that every 1% increase in slut prices is 10% additive to slut earnings. Not wanting to be Naked Long Sluts, I’ve hedged myself with a Short bias on strippers which I think will see immediate price declines as the value propisition of good slut is realized in the market place.


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 set the ads to default only to Investing. Based on today’s results we will let you know whether you like Candy, Accounting or Investing the most.

Once we know this extremely valuable information, we plan on combining it with all the other information which we have surreptiously gathered about you from your recurring visits and selling it bundled to the highest bidding e-marketing firm or to satan himself.

Recommendation: Check out our privacy policy.


Short: Jack Bauer

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

Long: Russian Terrorists
Short: Jack Bauer

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


Funniness vs Sketchiness

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

What is a laser disc?

A) A frisbee with a laser attached.

or

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


Update: Short Indian Ocean Piratery

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

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

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

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

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


Quotes Entirely Completely Relevant to Investing

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

-George Washington


Sell Out Saturday: Subscribers Get Rich

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

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

Dear [Insert Recipient’s Name],

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

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

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

Oceans of Love,
[Insert Your Name Here]

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


Translating Corporate Speak: MOVI & BBI

This came across the wire yesterday.

Shares of home video rental chain Movie Gallery Inc rose nearly 8 percent on Thursday , two days after a data tracking firm forecast that the U.S. rental industry in 2006 would be “flat but strong.”

Let me translate what “flat but strong” means in this case and in all cases. It means flat. And it’s not surprising that today (the day after yesterday’s move up) shares of both Moviegallery (MOVI) and Blockbuster (BBI) have traded off about 5% each and are swiftly approaching their pre-“flat-but-strong” levels.

Here is an earlier post of Johnny’s on Moviegallery’s Stock Decline.


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