Archive for August, 2006



Republican Sen. Conrad Burns, whose recent comments have stirred controversy, says the United States is up against a faceless enemy of terrorists who “drive taxi cabs in the daytime and kill at night.”

Is this another opportunity for a disruptive combination of taxis and other services (see related report Disruptive Businesses: Taxistutes). How long until the Islamic fascist terrorists and evildoers retrofit their taxicabs with lasers and become roving transportation/terrorism providers? These guys know how to create value.

Bear vs Shark The Corporate Edition: HR vs IT Part 2

See Part 1, where we covered how HR (Human Resources) sucks. This piece makes the case for IT.

IT (Information Technology) is the official profession of skinny white and asian guys, who when they aren’t dragging their feet, are finding ways to cover their own ass. There is no more powerful innovation to information services than the internet+ computers, yet IT’s main raison d’etre seems to be to ensure that technology is never anything other than silicon enhanced handcuffs. Although left unstated officially, it’s well known that IT is in their own personal arms race with China to match “The Great Firewall” and ensure that none of the proletariats/comrades/employees can ever use the internet to go to dangerous “tasteless” content and to ensure that it blocks downloads from Google[Ed note: The download for Google Toolbar and Google Desktop Search is inaccessible on my machine for instance]. The strangest facet of IT is that left unattended, their kind will reproduce asexually, doubling in number every 6 months, while absolute department production remains constant.

Typical interaction with IT.

Me: “Norton Antivirus just made my compute explode as I logged in from standby. There are hard drive bits in my hair.”
IT Guy: “Sorry, there is nothing I can do, it’s a known problem.”
Me: “Well on my new computer can I get it without Norton Antivirus?”
IT: “No, that would not be possible.”
Me: “Why not??? You said it has a known problem.”
IT: “But if you didn’t have Norton Antivirus, your computer would be totally exposed. You could get a virus from anywhere.”
Me: “Could any virus do any more damage than Norton Antivirus just did? I have never gotten a virus in my life because I don’t open attachments to emails from people I don’t know or which look suspicious.”
IT: “If you don’t have Norton Antivirus, you would be in violation of company policy. I’d have to report you to HR.”
Me: “I hate so much of what you choose to be.”

(For more on IT, see related report Tales from My Internecine Struggle with the IT Department).

Recommendation: While my disdain for the actual IT department is far stronger, I think my disdain for all that HR embodies makes it the worse.

Bear vs Shark The Corporate Edition: HR vs IT Part 1

Long or Short Capital has spent many a summer night debating Bear vs Shark, namely which would win in a fight to the death. The answer is obviously the Bear, given a neutral setting such as a tank of shallow water with small islands of rocks for the bear to perch on (Two words: Bone density, look it up. It’s the key in any interspecies matchup.).

But in an equally matched battle of HR vs IT, who sucks harder and longer?

HR (Human Resources) is the official profession of large female mouth-breathers and people who have no ambition. It is closest thing to working for the government outside of…working for the government. The whole department is an entrenched intracorporate bureaucracy which spends its days finding cipherlike ways to spend money, mainly to justify its own existence. There is some debate as to whether HR is a haven of Large Marge types or attractive twentysomething. My own anecdotal experience is that two of the HR women by the door of their floor are large enough that they look like they need to eat other smaller people to sustain themselves, which is what I suspect happens to the odd attractive twentysomething HR hire after a fixed period of fattening and aging, of course.

A typical HR designed program would be to secure subsidized frozen yogurt from TCBY’s for all employees. This would take a typical HR department a full 6 weeks to do and cost $100k in fees from third party consultants. Then they would email this new program out to the whole firm with a clipart of an ice cream cone with three multicolored scoops and a White dude, a Black chick and an Indian chief holding hands to symbolize racial diversity or some crap and tell us all about the new MultiCultural Ice Cream Program. Never would they realize that TCBY does not serve ice cream.

Steve Jobs, CEO of Apple (AAPL) provides this insight into HR (Source: Stepwise):

Ms Smith [prospective VP of HR at AAPL] describes how Mr. Jobs was hostile from the start of the interview:

“He told me my background wasn’t suitable for the position. Sun is a good place, he said, but ‘Sun is no Apple,’ ” recalls Smith with a laugh. “He said he would have eliminated me as a candidate from the start.”

Jobs offered Ms Smith the opportunity to ask questions.

She asked, “What is the corporate strategy?” Jobs replied, “We’re only disclosing our strategy on a ‘need-to-know’ basis.”

Next, she asked why Jobs wanted a VP of Human Resources when it was well known that he was “not a big fan of HR.” According to Smith, Jobs replied,

“I’ve never met one of you who didn’t suck. I’ve never known an HR person who had anything but a mediocre mentality.”

After this, Jobs’s assistant knocked on the door, informing him that “the call you were waiting for is holding.” The interview was over, leaving Ms Smith’s emotions a smoking ruin.

We make the case for IT and give our conclusion in Part 2 of Bear vs Shark the Corporate Edition.

Has the JonBenet Ramsey Moved Against the Elizabeth Smart?

Some commentators and posters have posited that the JonBenet Ramsey has made substantial gains against the Elizabeth Smart (See related report Foreign Exchange Rates for Humans) based on the media attention and general hoopitydehaha that abounds the capture of suspect/confessor/alleged murderer/acquitted against his will Mark Kerr.

Front page news can be an indicator of a change in value of a human life. But digging a bit deeper reveals that this is a market where there is no liquidity, and while the media may have been offering the JonBenet Ramsey at prices substantially above 0.78 Elizabeth Smarts, there were no actual bids at that level. It’s an artificially supported market in which we recommend selling as much of the JonBenet Ramsey as you can. However we suspect that the media will not be true buyers above the 0.78-0.80 level.

Evidence of the Existence of the Mini-mini-baller?

From the comments on our Intraoffice Email on Mini-Baller, check out HonkyTonkSnizzlePants on MySpace.

Some choice samples:

Also – Id like to point out that I have pics of me in a striped shirt (going out look), a polo shirt with the collar up (contemplative look) and a flat brimmed hat like a rapper (thug look). This clearly makes me stylish

Im macin it at like a $gazillion$ dollars a year doing tech support (export my job to india my ass! this shit is hard yo!), can you say bling motha fucka? Thats why I went to a CC (community college), so I can run up my CCs (credit cards) with no regard to my FICA (foolishly incapacitated credit access) – mini-ballers HOLA BACK!

Quotes Entirely Relevant to Investing

We favour the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.

-Nassim Taleb in the book Fooled by Randomness

Past Quotes Entirely Relevant to Investing

Hey Unions — Get Over Yourselves II

In the Q1’06, we wrote a report on how flight attendants were boycotting Flight Plan (See related report Hey Unions, Get Over Yourselves) because it depicted a FICTIONAL flight attendant trying to mess with Jodie Foster. This morning, Northwest’s flight attendant union announced their strike plan, CHAOS. What does it stand for?

The airline’s 9,300 flight attendants are poised to begin random work stoppages starting at 7:01 p.m. (Pacific Daylight Time) if a court ruling Friday doesn’t block a strike. They’re protesting the airline’s plan to cut their wages and benefits by about $195 million a year.

Under their plan called CHAOS — Create Havoc Around Our System — flight attendants will strike in some cities and flight by flight, rather than a widespread strike.

I would have called it Operation RERE which stands for “Who Needs Customers if We Keep Our Salaries at Existing Levels.”

Recommendation: The “if we make our crappy bankrupt company worse, maybe we won’t lose our overpaid jobs” tactic never seems to be that effective as part of a “stay employed” strategy. They would be much better off if they didn’t strike and just switched their outfits to ones like this. Short Unions.

(Hat tip

Intraoffice Email on Mini-Baller Roulette

To: Kaiser and JD
From: Mister Juggles (who created Mini-Baller Roulette 3 months ago)

Nice work. Way to get it done. Btw, Mini-baller roulette simultaneously fascinates and terrifies me. I think it may be my one enduring contribution to society.

Long Pluto, Short Scientists

Not a picture of Pluto but totally radicalScientists have been stellar performers over the past few decades as a pureplay on the empiricism trend. While we believe this theme has yet to play out fully, Scientists have overshot their long-term normalized earnings and have balance sheets overloaded with Sanctimonious. The downgrading of Pluto by the Scientists [note that we still rate Pluto at Sector Perform] reflects their overly self-important view of the world. Thousands (Millions? (billions?)) of years after the formation of the universe, to us, seems fairly late in the game to be changing the definition of planethood. In our view, Pluto has achieved permanent planet status.

Scientists now define a planet as “a celestial body that (a) is in orbit around the Sun, (b) has sufficient mass for its self-gravity to overcome rigid body forces so that it assumes a hydrostatic equilibrium (nearly round) shape and (c) has cleared the neighborhood around its orbit.”

We define a planet as “Mercury, Venus, Earth, Mars, Jupiter, Saturn, Uranus, Neptune and — most of all — Pluto.”

Recommendation: In the next lunar cycle, look for a convergence between Scientists’ reputations and Pluto’s currently battered status in the solar system. Also Scorpios, with Mars at its apex, you are all gonna get laid.

Mini-Baller Roulette

You may have learned some of the ins and outs of being a mini-baller, now it’s time we teach you about the newest mini-baller game of chance:  Mini-Baller Roulette.

You are probably familiar with “credit card roulette”: a bill comes for a shared dinner, everyone puts their credit card in a hat and one card is chosen at random thus “winning” the right to foot the entire bill.  You are also probably familar with “russian roulette” wherein you and a friend load a hand gun with one bullet and the two of you take turns putting the gun to your head and pulling the trigger until someone wins!

“Mini-baller roulette” takes from both the yuppie and eurasian variants to evolve the game to the next level.

Rules of Mini-Baller Roulette:

Players: 4 or more mini-ballers
Age:  Any age as long as all the players are mini-ballers
Object: To spend money and get it done
How to Play: 
Mini-ballers should arrange themselves in a circle preferably in a public area.  Each mini-baller removes his gold or platinum credit card from his wallet and passes it to the player on his right while saying “Buddy, get it done”.  Then all mini-ballers go shopping for anything they’ve always wanted but never wanted to pay for. While shopping there is only one rule:  Don’t hesitate.  At the end of the game credit cards are returned to their original owner unless it is discovered that one of the mini-ballers has hesitated.  In this case the offending mini-baller must continue shopping using HIS OWN CARD until the rest of the players are satisfied that he has gotten it done.  The mini-baller who spends the most money on his friend’s card is the winner and it is his responsibility to organize the next game of mini-baller roulette.

Make it happen.

Better Compensation Through Tipping

When you try and get in a taxi in Argentina, frequently a man (not the driver) will pop out of nowhere and open your door. Then he will hold out his hand waiting for 2-3 argentine pesos. Little did you know (and thanks to him for reminding you) that opening the door to a taxi is a valuable service worthy of compensation.

In the Ritzy hotels in the US, like, errr, the Ritz, sometimes there will be a “boy” in the bathroom ready to hand you a hand towel. He will have a plate nearby, letting you know, that handing the towel is a valuable service, one in which his specialization adds substantial value worthy of renumeration.

In the Middle East, you are expected to tip about everyone and every camel, even if you have paid them for their service substantially and even if they performed a service that was valueless or unwanted.

In these situations of dubious value tip seeking (“tipeteering”) the potential tippee uses intimidation and/or the threat of shame to coerce payment. This is the point at which tipping debarks from its root as an effective way of incentivizing performance in personal service industries and enters the realm of entrepeneurial racketeering.

This phenomenon is something that can be seized upon by any American service worker, provided that he/she/it has the gumption.

Say you are an associate in a law firm, making good buck. Your partner comes into your office to pick up some documents you have prepared with painstaking effort. Leave a dish out, a little silver plate saying “Tips Accepted.” What do you have to lose? That $20 in his money clip was probably going to be used to wipe his next No.2. And until he uses it, that silver plate will bore a hole where his soul would be if he were human.

Or you’re a sell-side analyst in a one-on-one with the CFO of a somewhat respectable publically traded firm. After he is done debriefing you on what kind of valuation you will give the stock, hold the door for him, make solid eye contact and stick out your hand. Do not stop until he extends some petty cash your way. You’re worth it.

And Doctor’s, let’s just say you have a lot of leverage in this area. Want those sutures taken out? Well, we have a collection plate from which all the proceeds go to the Mercedes Convertible Foundation…

Peak Piratery: Time To Walk the Plank?

We have been long piratery since our initial report from December (see “Piratery FKA Piracy: Primer to Investing in Cutlasses, Rum and Pillaging“). But the recent cresting of Pirates of the Caribbean 2: Dead Man’s Chest gives pause to our bullish sentiment.

Are we reaching the point of Peak Pirate?

  • In the difficult Indian ocean piratery market, the new Somalian Islamist government has seized a pirate stronghold.
  • Pirates of the Carrribean 2 is almost through its theatrical run, and it will likely finish as the 6th all time grossing film in domestic box office history, a height unlikely to be reached by subsequent entries in the series.
  • The entrance of low cost (and low quality) kitten pirates has proven to be disruptive to pirate operators, creating a low margin environment.

Mass adoption is the ultimate indicator of a fad or an investment theme peaking, and this article paints a peak pirate picture:

Across the United States, from New York City, to Portland, Oregon, the pirate movement has spawned pirate bars, social circles, bands, festivals, magazines and apparel.

Devotees are attracted by pirate fashions, the spirit of rowdiness and the opportunity to engage in anti-establishment behavior. It’s unclear where it began, but pirates are clearly in vogue.

“We are in the throes of its real peak,” said Hawkins, 35, who performs as pirate Luc the Lucky in Portland. “Pirates are like the new cowboys.”

The new cowboys? It doesn’t get any gayer than that.

Recommendation: We are rating piratery a firm “Do not buy.”

Quotes Entirely Relevant to Investing

Imitation is suicide.

-Ralph Waldo Emerson

Past Quotes Entirely Relevant to Investing

Long Qualms, Long Combobulation

I have qualms with the lack of qualms people are exhibiting everywhere. Compare the number of times you have heard your friends use the phrase “I have no qualms with that” and the instances in which they told you about the qualms they were having with someone.

Similarly, I have never heard someone claim to be combobulated. And yet, everywhere I turn people are feigning discombobulation.

Recommendation: Long “qualms” and short “no qualms”. After a cyclical period of society having “no qualms” a covergence to qualm/no qualm balance seems likely. Likewise the spread between discombobulation and combobulation is likely to diminish.

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