Long or Short Capital

Hugo Chavez, a student of Zimbabwenomics, believes in fairness and the sun is no exception. He has found the sun to be inequitably delivering its sun beams and has decided to do something about it. Chavez plans to Venezuela’s time zone back 30 minutes.

Now the leftist reformer, highly popular for redistributing oil income, is seeking to move the country’s time zone to offer a more equitable distribution of sunlight.

Venezuela in September will turn clocks back by 30 minutes as it switches time zones to boost the amount of natural light to residents, a government official said on Thursday.

Next month Venezuelan clocks will be set at Greenwich Mean Time (GMT) minus 4-1/2 hours, compared to the previous GMT minus four hours, Science and Technology Minister Hector Navarro told reporters at a news conference.

He said the measure sought “a more fair distribution of the sunrise,” which would particularly help poor children who wake up before dawn to go to school.
…
Navarro said the government is planning to announce additional measures to “make more effective use of time.”

Recommendation: Long the sun, long time. Short Venezuela.

CEO: We saved 300m this year.
ME: But reported costs were up 200m and production was flat.
CEO: Well we measure our cost savings vs budget.
ME: Well what was the budget?
CEO: It was to spend 300m more than we did.
ME: Who came up with such a crappy low expectation budget?
CEO: Me.
ME: Cool. . .well done.

CNN is running a story claiming a woman was the greatest pirate of all time. Based on what we know about women and investing, could this be possible?

The article’s claims are incredulistic. They say that Cheng I Sao (allegedly a chick’s name fyi) “controlled a fleet of more than 1,500 ships and upwards of 80,000 sailors” and “expanded the scope of the business, branching out from simple attack-and-pillage jobs to protection schemes, blackmail, and extortion [and] set up an extensive spy network and developed economic ties with farmers who would supply her men with food.”

Some known facts about women:

1. They are bad at investing. Otherwise, I’d know more of them professionally, rather than just “professionally.”
2. They suck at cutlasses. Have you ever seen a woman successfully dominate someone with a cutlass. It just doesn’t happen.
3. They cannot hold their rum. Try this out at home with a female you know, forcing them to take down 1 part rum for every 1 part you take down. The results will surprise and please you.
4. They do not have peg legs or eye patches. Again, a quick survey of your female “friends” will show this to be the case

Now we checked the article and it did mention several times “she” but the most logical conclusion is that they misunderstood Chinese (we are fluent in both oral Mandarin and written Cantonese) and confused Cheng I Sao’s gender accordingly.

Consider this clear evidence that Cheng I Sao was a very savvy and very male investor:

Cheng I Sao’s most famous laws applied to the taking of female prisoners. Ugly women were returned to shore, free of charge. Attractive captives were auctioned off to the crew, unless a pirate personally purchased the captive, in which case they were considered married.

Recommendation: We maintain a “Do not buy” rating on piratery, after calling the top perfectly last year. While fundamentals are improving, there is continued risk that a global economic downturn would impact the richness of pillaging shipping lanes and destroy the return on capital invested in piratery machinery and assets.

HT to the no.1 anonymous alleged female alleged private equity blog, Going Private.

Roger Ebert is having a spat with his employer.

In a statement released Friday, the TV show’s distributor, Disney-ABC Domestic Television, said Ebert had “exercised his right to withhold use of the ‘thumbs’ until a new contract is signed.” Ebert is a copyright holder on the signature “thumbs up, thumbs down” judgment that’s part of each film review.

The Pulitzer Prize-winning critic responded in a statement Saturday on his website, saying he “had made it clear the Thumbs could remain during good-faith negotiations,” contrary to Disney’s press release.

When the founding fathers were drafting the Constitution, the thought that a binary thumbs up or down gesture would be copyrighted never crossed the brains that lay under their ridiculous wigs. This is something that needs to be protected for the author’s lifetime plus 70 years? Otherwise Ebert (and Siskel) would have had no incentive to create have invented it, you know, other than their hugely successful movie review show.

The only upside to this development is knowing that Disney (NYSE: DIS) is the party unable to use the Thumbs. Disney has been the semi-secret driver of the changes in copyright law over the last two decades, greatly extending their control of Mickey Mouse & Co, long after Walt kicked the can. Now, instead of being able for Ebert to have one too many Boston Cremes, they are forced to negotiate.

Recommendation: You have been living off Valley of The Dolls and Gene Siskel’s halo for dozens of years, Roger Ebert, and I am short you and your absurd copyright. Thumbs down, two of them.

Every morning, my favorite moment is when I first log onto WSJ.com. What will the market be up to today, WSJ.com? Will stocks SURGE? Are they poised to open up? Or set for a weaker start? Or will it be more of an “edge” than a “start”.

Their permutations which change every 5 minutes are the best market intel out there. The WSJ is all knowing. During the day you might see:

“Stocks rebounded with authority, like a young Charles Oakley, on hopes of a Fed cut in September.”

It’s only August now, but let’s not quibble with meaningless details. You might also see:

“Stocks declined on jitters and news of jitters and the possibility of more news on jitters. Europe treaded water.”

“Stocks love cartwheels; markets set to spin.”

“Caution down below; market openings point to a steep downward motion.”

From this NYTimes article on plastic surgery:

“In a bosom-obsessed society where you think you can earn $20,000 more with bigger breasts, is it insane to consider taking out a loan to have surgery?” said Dr. Essig, who is writing a book on the economics behind plastic surgery. “The demographic is teachers, law enforcement officers and stay-at-home moms.”

Yes, it is insane. Not one of those three professions have any financial upside from bigger breasts. Now if you are talking about strippers, or charity fundraisers, or taxistutes, then yes, maybe a boob job becomes capex.

Recommendation: Long cosmetic surgery for women, despite its cost, it has huge immeasurable positive externalities. A government subsidy would better the world, but even purely private financed cosmetic surgery is a win for men. Also this site is amazing; intelligent exploitation of the idiot demographic.

HT to The Empirical Skeptic

Time Travel is now back in play, so it’s important to plan your investments accordingly. Here are some strategies which, according to our extensive time traveling experience, will be adopted in the future.

Groundhog Maximization: This involves using your time machine to go back into the past and relive a past day as yourself. Yesterday works best. You keep reliving yesterday’s making money until you have have perfected it. Then you move on to the next day.
Upside: Maximizes each day of your linear life.
Downside: Doesn’t maximize each day of your actual life. Also you would probably have to kill yourself each day to get your past self out of the way.
Caveat: Not as easy as it looks. Sometimes referred to as “Sawtooth Snapping”.

Terminator Option Protection: Use time travel to go back in time and eliminate the creation of the ability to travel in time.
Upside: This will protect your time travel based investment from “Me-too” copycats and other space-time continuum irregularities.
Downside: This may undue your existence and/or create a rift in the space-time continuum, which will in turn probably destroy reality.
Caveat: Be sure to avoid making contact with a younger version of yourself.

Alien/Squid Technology Asset Allocation: This involves using your time machine to go into the future to steal either alien or squid (depending on which race becomes our overlords) technology. Then your time machine is used to bring said technology back to the present where you can use your assets to fund the profitization of your future tech.
Upside: This could make you billions.
Downside: Your Moody’s survival rating would be below investment grade; given that it’s from Moody’s the floor is the limit as to your actual survival rate.
Caveat: Make sure you bring back something potentially lucrative. Renewable energy based on salt water = Good. Alien ionizing deodorizer = not Good. Anything that you can buy at the Sharper Image is Not Good. Also do not bring any aliens or squid back with you as it may accelerate the end of the human race.

They’re turning kids into slaves just to make cheaper sneakers.
But what’s the real cost?
‘Cause the sneakers don’t seem that much cheaper.
Why are we still paying so much for sneakers
When you got them made by little slave kids
What are your overheads?
Flight of the Conchords

Past Quotes Entirely Relevant to Investing

Long or Short Capital will not be able to file its financials at this time due to several accounting irregularities which have been brought to our attention. Chief among them is an issue concerning our cash balances. Our cash on our quarterly basis does not line up with our annual changes. As you know, according to SAAP, this is a problem that can usually be cured by merely choosing which number seems more appropriate. Other solutions include “making it up” or “embezzling the difference.” To ensure that we effect the best possible outcome for Long or Short and its subscriberholders, we plan on retaining the services of an external accountant who is fully versed in SAAP and can advise us on the proper steps to take.

We assure you that we do have cash (somewhere) and that there will be at most a $1 million change in our cash balance as a result of these irregularities. Based on all the Qs and Ks which we have read, $1 million isn’t much, so there is no reason for concern. We appreciate your patience in waiting further for our financials.

Hi, my name is Ben. I am in charge of the economy, more or less. To my left, a man far less important. To my right, Greenspan. Last night, the three of us held a secret meeting in our hidden Fed safehouse. There we drank, ate, told some amazing jokes and then decided to cut the Fed Discount Rate 50 basis points.

The rate cut was approximately this big. The technical issue as to what the Discount Rate actually means is largely irrelevant — the takeaway for you is that we cut a Rate 50 bips. Does that make you happy?

I knew it would make you happy. It made me happy too, that’s why I did it. Some have concerns that this is a ham-handed intervention into a free market and worse, a temporary salve, that will give people a delusional sense of comfort. These are really good points, so let’s switch to a profile shot.

As I mentioned above, I am in charge of the economy, more or less. And the economy, more or less, is the stock market. As you can see there is nothing temporary about today’s bump in the DJIA. Also did I mention that the Rate cut was this big?

You did not fail, and get to subject yourself to even more hell starting in April. You are closer to the shiny merit badge of financial glory, the CFA designation.

To those of you who did fail, the world needs stock brokers too.

Do:
Contact your broker and say “Sell! Sell! Sell!”

Don’t:
Contact your broker and say “Buy! Buy! Buy!”. This will lead to liquidation, especially if your account is of the margin variety, but it will take a few more weeks and involve having no money left.

Do:
Wear a whale belt. Let the market know you still feel Nantucket, even if deep inside you know you are Jersey Shore now that the market’s scythe has reaped what you have sown.

Don’t:
Drink heavily. Yet. There will be plenty of time come Friday to reenact The Lost Weekend. The drugs don’t work, but the sauce does.

Do:
Invest your new newly found liquidity in sexy parties. Sexy parties are one of very few assets with no-downside

Don’t:
Invest your money in stocks, bonds, phantom bonds, subprime mortgages, hedge funds, put options, call options, securities, US dollars, New Zealand dollars, Renminbi, currencies, real estate, gold, commodities.

Do:
Yell. Primal screaming has proven therapeutic effects. We read this on the internet.

Don’t:
Worry. Now that you aren’t invested in the markets, they can only go up.

Possibly Fake but very Full Disclosure: I own nothing

Guy #1: Subprime?
Guy #2: Subprime?
Guy #1: Subprime.
Guy #2: Jitters.
Guy #1: Exposure?
Guy #2: Subprime Jitters.
Guy #1: INFLATION.
Guy #2: No, CONTAGION.
Guy #1: But the expected loss on all residential subprime loans is de minimis to the greater economy.
Guy #2: Liquidity. And contagion.
Guy #1: Oh. Fuck.
Guy #2: Commercial paper.
Guy #1: The end.

Portfolio.com has a portrait of Cerberus Management founder Stephen Feinberg.

Some choice quotes:

But then, Feinberg is not trying to win a popularity contest.

No shit, really?

There is little at the office to distract staffers from the business at hand—almost no art on the walls, no fancy woodwork. “It’s not a place you bring clients to impress them,” says a former employee, who adds that those in the satellite offices refer to headquarters as the Death Star.

“His ego is having no ego.”

Do real people say things like this about people? Have you ever thought about one of your colleagues or friends something along these lines? “He has an 800lb gorilla on his back, and its the desire to make money for his clients.” Do Business rags just make this up?

“Steve didn’t care. He was a get-it-done person, and he wanted to get it done.”

Mini-baller?

They named their new company after the three-headed dog that guards the gates of hell in Greek mythology. The company has long held that the symbolism refers to the fact that one eye is always open, presumably protecting investors’ money.

The symbolism refers also to the fact that Cerberus Capital Management serves at Hell’s pleasure.

Recommendation: We recommend a Steve pair trade — long Feinberg, short Schwarzmann, a bet on Stevevergence. Feinberg may be a “get-it-done” person, but minions of the dark lord are excluded from mini-baller status. (Aside to Portfolio, how could you not mention Cerberus deals which aren’t getting gone? Or are they getting done?)

HT to reader Kyle S