Archive for July, 2006

Quotes Entirely Relevant to Investing

If you want to know what a man is really like, take notice how he acts when he loses money.

-New England Proverb

Past Quotes Entirely Relevant to Investing

Burqa (Burka) Arbitrage

Value. Where is it? It could be in an underinvested collection of brands within Unilever; it could be veiled in a sleepy Government run regional waste operation in Montevideo. But could it be under the draping cover of…a burqa?!?

Fact: Middle Eastern women are hot, I know this because I have never hooked up with them. Scarcity, a valuable asset’s best friend.

Fact: Many hot Middle Eastern birds live their womanhood with their eminent hotness unseen by the entire market.

Fact: Competition breeds improvement and keeps firms (and assets) from getting bloated and inefficient. Burqas serve to reduce competition and endow a visual monopoly to one man. Only one man can view the holiest of holies. This limits the upside that a burqaette can experience by staying fit, looking hot and being aesthetically pleasing. Only one man can give her positive feedback, as opposed to the dozens of men who might check her if they could see all of her on her daily stroll to through the bazaar or to H&M.

Once you put what you want to see under the burqa, what you see under the burqa will not longer be what you want to see. I’m talking orca-sized “no longer what you want to see” based on a complicated visual regression analysis which we performed. Essentially, controlling for variables such as shoe size, wealth, age, the addition of a burqa adds approximately 30% to a women asset’s body weight and reduces beauty by 5 hklums. The end result is that burqas serve to control the property rights to a valuable asset but at the expense of the valuable asset’s value.

Recommendation: There is a potential arbitrage opportunity to acquire a burqa-veiled woman asset, remove the burqa, and flip it for 20% more on the spot. Alternatively, an investor could let the natural elements of competition cause her to firm up her shape while spending some capex on a makeover and then flip the asset for approx an 40-50% after 12-18 months. It’s important to do some upfront due diligience, specifically to verify that the asset has strong underlying fundamentals. Further value can be realized by “blonding” the asset.

Here is a sample of an asset as it was at FYE 12/31/05 and how it looks on a pro forma basis.

Long Ken Lay’s Life

Let’s just say that while Ken Lay’s life may be trading near zero, but that a death this conveniently timed is no death at all but instead the perfect ruse to escape, fly to Rio for face-changing plastic surgery and a retreat to a lair he built in the caves of the Spanish Pyrenees with $100mm’s he has tucked away over the years. In fact, the Ken Lay that died may not actually be Ken Lay, but instead a genetic doppelganger created with technology from Project Helix. We saw this on Alias one time, so it’s a proven tech.

Recommendation: Alive!

Quotes Entirely Relevant to Investing

But I should say too that in these rooms just this afternoon such displeasure brought me near to murdering the Sheriff and raping Mrs. Ellsworth. I have learned through time, Mr. Tolliver, and as repeatedly seem to forget that whatever temporary comfort relieving my displeasure brings me, my long-term interests suffer. My proper traffic is with the Earth. In my dealings with people, I ought solely have to do with n*****s and whites who obey me like dogs.

-George Hearst, on Deadwood

Past Quotes Entirely Relevant to Investing

« Previous Page