Long or Short Capital

According to this ABC News article, Time Warner had this to say at last week’s National Cable & Telecommunications Association conference:

[My] favorite quote of the week came from Richard Parsons, CEO of Time Warner Inc., speaking at the annual National Cable & Telecommunications Association conference in Las Vegas.

According to Reuters — a fact that may give Parsons plausible deniability — Parsons said, incredibly, “The Googles of the world, they are the Custer of the modern world. We are the Sioux nation. They will lose this war if they go to war. The notion that the new kids on the block have taken over is a false notion.”

No one can say for sure, but the fact that the Sioux are all dead indicates that the Sioux didn’t quite win the war. I guess it really depends on what your definition of “win” is. Mine would include “not being exterminated with pox infested blankets” and “not having my land taken away and being forced into concentration camps in Oklahoma” and also “not being all dead by the hand of the white man.” I guess that makes me a purist.

Recommendation: When management doesn’t even know when they are about to be genocided, it’s probably time to short. Short Time Warner (NYSE: TWX). A catalyst for doubling down would be any raid on Google (NASDAQ:GOOG) initiated by Time Warner which results in the slaughter of 300 Googlites and one of Sergey Brin or Larry Page.

Hat tip to the value creating Newmark’s Door.

• Donating $1,000 in malt liquor money to each member of the US homeless population
• Making Spiderman 3 24.67 times
• Drowning a stripper by making it rain with $7.4 billion in singles. Sacagawea singles.
• Buying decaying shark corpse art for all your closest friends. Your 1,000 closest friends assuming you get a discount for buying decaying shark corpses in bulk (we have little information on the dynamics of the decaying shark art market).
• Purchasing Manchester United, Arsenal, AC Milan, Real Madrid, the New York Yankees, the Boston Red Sox, the LA Dodgers, the Chicago Cubs and the New York Mets with enough cash to probably buy half the NHL.
• Lifetime bottle service
• 1.75 billion golf balls to prep for that management consulting interview question
• A money bonfire

As you may or may not know, the esteemed Dealbreaker released a blind item hinting at the identity of the anonymous author of Going Private. That hint pointed to Kimberly Kravis, daughted of KKR founder, Henry Kravis. Having developed a website relationship with Going Private which includes internet tea parties, anonymous post swapping, and a friendly give and take, we too have come to know the true identity of the industrious and using-word-a-lotty Equity Private. It is this knowledge that allows us to strike down the Dealbreaker’s false claim of her identity and instead let the world know who Equity Private is through pictures.

Here is shot of Equity Privateer with Armin, her boss.

She goes by the nickname “Birdie”.

A candid shot of Equity Private engaging in one of her most favorite hobbies that don’t include anonymous blogging or being “very wordy”.

Here Equity Private is in the Hamptons after one too many. Never trust a man who wears a mask and steals hamburgers, ladies. If he has no problem stealing a burger, he has no problem stealing your heart.

And here she is at one of her private equity firms soirees discussing deals and getting sauced on expensive drinks. The Debt Bitch is the pink one with the siren-song eyes.

As you can see Birdie comes with a certain amount of pedigree. She has always been an “early bird” doing well enough to get accepted to Hamburger University and later getting her MBA from HBS, in this case the tastily named Hamburger Business School. As we have exchanged emails with Birdie, and gotten to know her, we have found her to be one of the good ones not like that horrible Hamburglar or that Grimace looking purple bastard, so we hope that despite our outing of her real real identity she will continue her noble goal of bettering the world one 5000 word sardonic memoir post at a time.

I have a wedding to attend and need to know the correct amount to spend on a wedding gift. They are registered in places online such that I can buy gifts ranging from $10-200 and more than one gift, to achieve the exact basket of flatware, plates, toaster ovens and bedding I desire to give as a gift.

What is the market price to balance the rational desire not to spend money and the rational desire not to insult a friend and his whore of a wife. I’m setting the price at $150 (too much, too little?) for what I should spend and will adjust it for whatever amount the comments indicate, ignoring extreme outliers. I will spend whatever the adjusted amount is as of market close May 9th 2006. Help me find my optimal level of wedding gift expenditure.

Price as of May 9th, 4:00PM: $140, down 15 points since market close yesterday, down 10 pts from its opening level at May 8th 1:45PM, down 5 pts since May 8th 3:45PM, up 5pts from the opening bell of May 9th on light volume

From a friend, I received this forward yesterday morning:

Subject: No gas on May 15

NO GAS…On May 15th 2007

Don’t pump gas on MAY 15th

In April 1997, there was a “gas out” conducted nationwide in protest of gas prices. Gasoline prices dropped 30 cents a gallon overnight.

On May 15th 2007, all internet users are to not go to a gas station in protest of high gas prices. Gas is now over $3.00 a gallon in most places.

There are 73,000,000+ American members currently on the internet network, and the average car takes about 30 to 50 dollars to fill up.

If all users did not go to the pump on the 15th, it would take $2,292,000,000.00 (that’s almost 3 BILLION) out of the oil companies pockets for just one day, so please do not go to the gas station on May 15th and lets try to put a dent in the Middle Eastern oil industry for at least one day.

If you agree (which I can’t see why you wouldn’t) resend this to all your contact list. With it saying, ”Don’t pump gas on May 15th”

The idiocy in this message is rampant. You cannot drop the price of gas by $0.30 by having some small % of drivers effectively defer their purchases a day. Drivers do not even make up the whole gasoline market! And that’s a 10% move in price per a gallon! Also the concept of “protesting gas prices” is akin to “protesting gravity.” These things aren’t set to gouge you, they are set to balance supply and demand for people who need gas even more than you do.

Then we get to the math. There are 78 million “internet network members” and it costs $30-50 to fill up a tank so that it would cost $2.3bn (since when is $2.3bn close to $3bn????) to the “Middle Eastern oil industry”. Except that the avg consumer fills up their tank about every other week, or 1 in 14 days. So if everyone who was likely to fill up their tank on May15th were to not fill up their tank on May 15th, ceteris paribas, there would be a ~$165 million impact. But what would this impact really entail? It’s likely that the majority of the people who didn’t buy gas on May 15th would have to buy it at some point, right? Or else how are the going to get to their job as Chief Pastry Engineer at Au Bon Pain? So say that 90% of that gas is deferred until at most two weeks in the future. Now we are down to a $16.5 million impact.

Who would this hurt? The “Middle Eastern oil industry”? Probably not, whoever that is. The most likely people hurt would be retail gas locations which are frequently run by individual entrepreneurs. These storefronts are are the dominant source of gasoline for consumers. Say there are 150,000 retail gas station in the US. On May 15th, they would have a normal business day except they would lose some small percentage of their normal volume despite having the same overhead costs. This volume would be mostly recouped later in the next two weeks. They would lose money. About $120 each. Way to stick it to the man…the middleman.

Recommendation: In order to combat the FUD of anti-market practitioners, we urge all Americans and all patriots to fill up your tank on May 15th. In fact, fill up all your tanks, your lawnmower, your scooter, your jetski, your gas power snow blower, everything that consumes gasoline should be topped off on May 15th. Let’s see how high we get these prices to go. Make May 15th national gas day. For every person you forward this post to, Microsoft’s Bill Gates will pay you $245 in naira.

We Spaniards know a sickness of the heart that only gold can cure.
Hernándo Cortés

Past Quotes Entirely Relevant to Investing

Mexico was “independent” indepedent after 1821 and none of the relevant dates associated with this independence fell in May. So unbeknownst to many tequila addled revelers, they are not drinking to Mexican independence. No, Cinco de Mayo is the celebration of a man, the Mexican Abraham Lincoln, my buddy Benny Juarez, and his success in dealing with the 18th century credit card countries.

Post 1821, Mexican government was volatile and fiscally imprudent. They didn’t have the tax collection revenue to support all the spending they were doing, so by 1861 their credit score was crap and they were way late on their payments to France, England and Spain. They wanted to handle it the right way, so they called up those countries and let them know “Hey, we can’t make the payments now, but we will work out a payment plan starting in two years so we can get our house in order. We’re good for it, our new president is Benito Juarez and he is basically the shit.” France, England and Spain sent armed representations to Mexico, and England and Spain walked away appeased after some negotiations.

France however planned to foreclose on all of Mexico because that was just how Emperor Napoleon III did things. They came en force and this was back before they were soft. The Mexicans needed to demonstrate to their collection agents that they weren’t gonna go down without a scuffle, and that collecting on their debt was bad business for any credit card country. General Zaragoza, who every US schoolchild doesn’t learn about, led a collection of Indians and Mexican soldiers to fight back and crush a French force that was 15-25x as large. That is an exaggeration but it is true. It was like the Alamo, but if we won and were also Mexican. It was a rough and tumble few years, but this victory, Benito Juarez and later the support of the United States, brought Mexico into good times.

The above is 100% truth 74% of the time.

Amongst all the deals that are fit to print, Deal Book reported yesterday that Citigroup (NYSE: C) has come out with a slogan that they hope can “Make it Happen” like the tagline of Royal Bank of Scotland (LSE: RBS) has made it happen (whatever “it” is). The slogan? A call to mini-ballers world around, “Let’s Get It Done”.

Cititgoup’s new tagline, “Let’s Get It Done”, could double as a rallying cry for the bank’s chief Charles O. Prince III.

Citigroup is expected to introduce the tagline and advertising campaign next Sunday in the company’s first global branding effort since it was formed nearly a decade ago.

…

The new tagline and campaign seems to be a call for action at a crucial time for the company and Mr. Prince.

Sounds familiar. Straight from Point 4 of How to be a Mini-Baller:

4. You say “get it done” all the time. You’re not sure what this means, but you know its important, and when you say it . . . you mean it.

This is a clear call to the mini-baller demographic:

• Want a bank account? Let’s get it done
• Want the best counterparty for your firm? Let’s get it done
• Need insurance or whatever crap? I am pretty sure that we can get it done
• Want a brokerage account? Let’s get it done, our Smith Barney brokerage account is specifically designed for customers who are rich, have low expectations and a deep self-hatred.

Recommendation: The mini-baller portfolio now should have only two stocks in it. RBS and Citigroup. These companies make it happen and get it done, and that’s all mini-ballers need to hear to buy something.

According to the AP, pirate attacks dropped worldwide in the first calendar quarter of 2007.

Pirates attacked 41 commercial vessels worldwide in the first three months of 2007, the lowest figure reported in the past decade, a global seafarers’ watchdog said Wednesday.

The January-to-March figure is a significant drop from the same period last year when 61 attacks were reported, the London-based International Maritime Bureau said in a statement through its piracy reporting center in Malaysia.

It was the lowest first-quarter total reported by the IMB since at least 1998.

Although many sell-side piratery analysts may have been surprised, readers of our research reports would not have been. This report comes on the heels of our 8-21-2006 report titled Peak Piratery: Time To Walk the Plank? in which we urged potential piratery participants to “Do Not Buy”. We of course, were correct and called the piratery market more accurately than any other investment research firm.

As our fiscal third quarter of 2007 comes to a close today, keep this in mind when deciding whether to continue to invest the time into our reports. We make the big bucks because we make YOU make the big bucks.

Norville: What do you do if the envelope is too big for the slot?
Ancient Mail Sorter: Well, if you fold ’em, they fire you. I usually throw ’em out.
-An exchange from The Hudsucker Proxy

Past Quotes Entirely Relevant to Investing

Reader WrigleyDog pointed us towards a press release from Pfizer (NYSE: PFE) today, which was so generic that it can only mean one thing: the company will stop producing anything but generic pharmaceuticals. Here is the press release in its entirety:

Pfizer Focused on Delivering the Value Customers Expect and Shareholders Deserve, CEO Kindler Tells Shareholders

SOUTH BEND, Ind.–(BUSINESS WIRE)–In remarks at the annual shareholders meeting, Pfizer Chairman and Chief Executive Officer Jeffrey B. Kindler said, “We’re operating in an incredibly dynamic industry environment – one that, day in and day out, presents us with a whole range of promising opportunities. To succeed in this environment, we must fundamentally change the way we’ve done business in the past – and eventually transform just about every aspect of our company.

“We’ve accomplished a lot already. But it’s clear we need to do much more to get to where we want to be. All of our efforts are focused on achieving our ultimate goal – making significant improvements in the company’s performance and generating greater total returns for you, our shareholders.

“While it’s clear we’re operating in a very competitive business environment today, I also believe that we have a very wide and attractive set of opportunities to drive our success in the years ahead and enhance returns to our shareholders.

“We are focused on driving revenue growth, executing better, controlling costs, instilling greater accountability across the company and making sure we deliver the value our customers expect and our shareholders deserve.”

In other business, 12 of the company’s directors stood for and were re-elected to one-year terms. In other voting, shareholders ratified the selection of KPMG as Pfizer’s independent auditor for 2007. No shareholder resolutions received a majority vote.

Recommendation: There is not one thing in that entire speech which could not be recycled by 95% of public companies, which is amazing even for a press release. We think this is clear evidence that Pfizer will eschew its focus on patented pharmaceutical and switch entirely to generics. If Pfizer does this and if they can drive revenue growth, execute better, control costs, instill accountability and deliver value to shareholders, we rate the stock a “Buy this Stock in your Portfolio”.

Related: The Stalwart discusses the disappointing guidance provided by the most generically named company the Corporate Executive Board (NASDAQ: EXBD).

Kellogg Co (NYSE:K), producer of Eggo Waffles of “Leggo my eggo” fame, finally made the logical step to tie-in Lego building blocks to their popular, nutritious, and delicious waffle product. The pronunciations of “lego” and “leggo” are identical and the overlap between the two consumer bases is high; it turns out that >86% of the people who build indoor structures using small plastic pieces also consume waffles regularly.

It also appears that as a secondary goal, Kellogg had hoped to capitalize on the real estate boom by positioning waffles as a substitute for common building materials used in new home construction. This belated effort is doomed to fail, not just because the worm has turned on real estate. I have personally attempted to build structures using their low-cost waffle material and have found that it fails to provide the necessary structural support. These issues are compounded when the waffle building supplies are covered in tasty maple syrup.

Recommendation: Only invest in Kellogg’s or any other cereal company as a housing and construction play, if you are looking for a big bowl of unprofitable investments with the high fiber ability to produce regular, large, soft, bulky investment losses.

The best lack all conviction, while the worst are full of passionate intensity.
William Butler Yeats

Past Quotes Entirely Relevant to Investing

If you encounter nattily-dressed males shaking, shivering or otherwise acting erratically, do not be alarmed. There has been a disruption to Research in Motion’s (NASDAQ: RIMM) Blackberry service, preventing customers from being able to send and receive email reliably from last night through to today. If this continues, Blackberry users worldwide will be unable to:

• affect the veneer of importance in public
• take time off from vacation to stay addicted to work
• ignore unwanted conversations at work-related social functions
• pay complete inattention during investment meetings
• achieve new high scores in Brickbreaker [ed note: 24k, bitches!]
• ignore their girlfriends in the name of “last-minute requests from the PM”

Global markets could crash as this morning has given market participants a rude wake-up call from the sedated state induced by their Blackberry umbilical tethers to the hard reality of their empty existence and the abyss that is their communal soul.