Archive for January, 2008

Are Walruses Efficient?

The most frequently asked question by our readers is the likelihood of Bernanke finishing the job that Greenspan started: inflating the US economy back into the 70’s. But the second most frequently asked question is whether walruses are more efficient than human beings. To date, my only response has been: I really don’t know…maybe? I mean they have those giant husking tusks, yet they don’t seem to have ever attained any professional employment, or attended college, or, as far as I know, even learned how to speak English. Surely there must be menial labor jobs that Guatemalans do and that walruses could do better, like opening cans or whatever. So why doesn’t the walrus work?

Because the walrus doesn’t have to.

They free ride on mother nature, ignoring the property rights of humans, fishing at their leisure, and destroying the ozone with their flatulence. They create nothing in their life and the only viable industries they contribute to are ones which revolve around their death. Countless non-profits and government agencies assist them and monitor them, likely devoting more money to the average walrus than to the average Namibian. This points to their efficient use of their own walrus capital, carving out a life of luxury wherein they get to eat sashimi every day without ever having to punch a clock.

It’s even less fair when you look at the upper class male segment of the walrus population.

Wikipedia on the Walrus:

The males show off in the water for the females who view them from pack ice. Males compete with each other aggressively for this display-space; the winners in these fights breed with large numbers of females. on the Walrus’s mating

Each herd of estrous females is attended by one or more large adult males. According to one study, the ratio of males to females averaged 1 to 23

After the mating season, mature bulls return to all-male herds.

Well, I’m not surprised. Not only does a certain privileged subset of the male population dominate walrus society, but when they are done with their walrus orgy, they discard the females and join their buddies in a male-only club, likely to smoke cigars, hunt fish and watch walrus sports.

Recommendation: I am not the walrus, but I want to be.

Cheeseburger in a Can: Long

Cheeseburger in a can

Recommendation: Fundamentally, technically, there is nothing about the Cheeseburger in a Can that does not make me want to back up the truck and load it with cans of Cheeseburger in a Can. People doubted us when we went long Two Girls One Cup (we didn’t release it to the public, but we are assure you that our private funds got in way before the mania), and we see this as a trend towards putting amazing things in cups or cans in order to make things which are even more amazing than the sum of their amazing parts. Long Cheeseburger in a Can.

SAAP Notice on Fiscal Year End

Long or Short Capital released this press release this morning:

Long or Short Capital Management intends to stop messing around and realign our fiscal year end with the calendar year end. The confusion the previous misalignment created allowed management to manipulate the firm’s financials and allowed us to report our earnings in such a way as to maximize our compensation. Despite these obvious positive aspects of the previous year end policy, we have also found that maintaining mildy accurate records that correspond to these dates to be slightly hard. This is, as far as we and our consultants can tell, “slighty hard” too hard given our endowments of work ethic and of managerial competence. Thus our new fiscal year end will be December 31st, and we will restate all of our numbers correspondingly in conjunction with the release of our fiscal year 2007 numbers. This does not and will not affect the level of dividends we have granted in the past and no refunds will be given; any such requests for refunds or compensations will be handed off to our counsel, Google Trash and Can. Subscribers will be able to collect their new dividends when we announce them and their onerous conditions. We have checked with our accountants and advisors, and they have informed us that everything we intend to effect is fully compliant with SAAP standards. The management of Long or Short want to thanks our subscriberholders for their continued support in this non-difficult time for the company and also for allowing us to pad our pockets and line the hull of our mega-yachts with carbon fiber. Good day, sir.

Quotes Entirely Relevant to Investing 01-27-2008

It’s a zero-sum game. If you put trades on that worked so well that you bankrupt your counterparty, you will not collect on those trades.
-Jim Keegan, a senior vice president and portfolio manager at American Century Investments (from Calculated Risk)

Past Quotes Entirely Relevant to Investing

OSTK Appoints Landmark 20th Century Writer to Board

Investors think Overstock (NASDAQ: OSTK) CEO Patrick Byrne is crazy. That’s why his ecommerce company trades at a 0.3x price to sales ratio while Amazon (NASDAQ: AMZN) sits at 2.3x.

Well, here was an email from the IR from last week: Overstock Appoints James Joyce to the Board of Directors

I am flabbergasted. I mean, when people are questioning your sanity, the ideal response is not to appoint a poet and author from the EARLY 20th century. Is this the man to turn around a troubled internet retailer?

Recommendation: Short OSTK; with James Joyce behind them, it will be almost impossible to invest in OSTK without an accompanying guide to help you understand. This will severely and negatively impact demand from institutional and retail investors alike, who may claim “We love OSTK! We think it’s one of the greatest stocks ever!” but actually do not hold any OSTK in their portfolios.

CIBC Downgrades…CIBC

CIBC May Take $4.1 Billion Writedown, CIBC Analyst Says (headline has changed but the original was as we laid out). This just speaks to credibility of CIBC’s (NYSE: CM) equity research department!! ….or the fact that their equity research department just got laid off.

Recommendation: Short the employment status of anyone who downgrades their own firm’s stock; double short any company who puts their employees in a position where they would have to do so.

Who Missed Their Earnings?

Is this a company that missed earnings or the index of the largest country in Europe?

The Economy in a Picture

How to End It

So your fund is down double-digits, the first number is a 1 if you’re lucky, and you are one more -3% day away from getting a margin call from your friendly brokerage house which has it’s own balance sheet disaster because of its in-house, levered long ‘hedge’ fund. You’re starting to think it’s just not worth it anymore and that the easiest, quickest way out is just to end it.  Put yourself out of this misery and give your wife/kids/fellow mini-ballers the insurance check they deserve. But you have to ask yourself: Do you really want to go out the easy, painless way? You’ve lived your whole life as a flashy, jet-set, new money rock star and you should go out with similar flair. Our top ideas for how to end it with a flourish that says “I was here and I got IT done”:

  1. Tie a Bloomberg screen to your chest and fight a bull ’til the death. If the markets get worse it’ll see red and you’re toast; if we bounce then you’re saved and you could say you fought a bull with nothing but a Bloomberg terminal and won. HUZZAH! Plus there’s symbolism if you die by bull, I’m not sure what it symbolizes but it’s highly symbolic.
  2. Chain yourself and a woodpecker to your desk. Train the woodpecker to peck the sh-t out of you every time he hears the words “we’re selling off” from your trader. This is advantageous because woodpeckers can’t be prosecuted for murder in most states (IANAL).
  3. Put a gun in the ear piece of your phone. Then do an update call with a highly cyclical company that has consumer exposure and oil as a big cost (like I don’t know, an airline) and every time the retard IR guy tells you “we haven’t seen any weakening in demand yet” shoot yourself in the head. Extra points if you figure out how to get the gun connected to your wireless earpiece via Bluetooth.
  4. Make a list of all the shorts you pitched in the last year. For every one that is down more than 20% from where you pitched it pull out one hair (if you are bald – go pubic). When you run out of hair scream and jump out your window.
  5. Tell your mom if she calls you one more time and says “every time I read about the markets going down I think of you, are you doing ok?” that you are going to put an ice pick through your eye. Then buy an ice pick and wait for her to call you.
  6. Apply online for an associate job at an investment bank. Believe it or not this will kill you, guaranteed.

Quotes Entirely Relevant to Investing 01-20-2008

Host: why does Ambac still have AAA rating?
-Jim Cramer in this CNBC video

Past Quotes Entirely Relevant to Investing

You Know You’re a Mini-baller…

…when you can’t remember what your base salary is but know that it’s just enough to cover your expenses.

Totally Rad Mini-baller Ski Lingo

A few mini-ballers went skiing over break and met some stoners in the gondola who taught them all some coloradical ski lingo. Of course the mini-ballers were enthralled with this new vocabulary and proceeded to overdose on the new found choices piece of diction. A brief guide in case you want to “make some convo” on the lift this year.

Shred the gnar – ski/ride in a totally sweet way. “Yo bra, we shredding the gnar today or what?” (can also use “shred the gnar-gnar” for additional emphasis on how much gnar you intend to shred)

Gnar-buckets (n.) – the receptacle for the gnar after you shred it. “Bra, I filled up like 6 gnar-buckets working my boards on that glade”

Hit the freshy pow-pow – Ski/ride in new-fallen snow. “Wake up kid, you looked outside yet? We’re gonna totally hit the freshy pow pow today!”

Sesh it up – definition unknown but if asked this the answer is always “yeah man”. “Did you sesh it up that time?” “Yeah man.”

Over-Under – a game skiers play whereby one skies under the other’s legs. “Dude over-under looks kinda gay but it’s actually pretty gnar”

Best in the Business: Names Edition

DreamWorks press handler: Terry Press
TomTom spokesman: Taco Titulaer

Five Simple Steps to Becoming a Billionaire: The Greenspan Method

  1. Become Fed Chairman
  2. Lower interest rates until you create an asset bubble. Hold them low until stagflation is in the air and a real estate bubble is floating
  3. Stop being Fed Chairman and release a book on how you didn’t do anything wrong and have no regrets. If possible, time it perfectly with the worst real estate market in generations
  4. Join the hedge fund which has profited more in % and dollar terms than anyone else has from your mess (which you didn’t create)
  5. Build a platinum statue of your muse, Ayn Rand, and sleep with it every night

It also helps if you are mostly unethical.

Addendum: Look at this quote from Greenspan from the WSJ’s Real Time Economics:

“Q: All three of your clients — Pimco, Deutsche Bank and now Paulson — were bearish early on housing and mortgages. Is there a connection?
A: I hadn’t [noticed] until you just raised the issue.”

Greenspanspeak is code for self-serving disingenuousness.

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