Long or Short Capital

The so-called “Intelligent Surveillance and Guard Robot” uses visual and infra-red detection to distinguish between humans, trees, and vehicles, and can do so from 2.5 miles away during the day and about half that at night.

“Until now, technology allowed these robots to conduct monitoring function[s] only. But [now] our robots can detect suspicious moving objects, literally go after them, and can even fire at them,” said Sang-Il Han, principal research engineer at Samsung Techwin.

Once the target is within 10 meters, it will demand a pre-programmed military secret code. If this code is not provided, it could give three possible responses: sound an alarm, fire rubber bullets or open fire with a K-3 machine gun.

-From ABC News on the rollout of South Korean Robot Sentries (interest seeded by Collision Detection)

It took 20 years for the premise of the futurist 1986 film Short Circuit to become realizable in the real world, but that day is now upon us. Unmanned robot sentries are being rolled out by the thousands in Korea at $200k a pop, a price within the range of the US consumer market.

Recommendation: Short human soldiers, Hold Militaries (on watch for downgrade). The cost savings generated by eliminating human cogs from the war machine are likely to be offset by increased competition from rival militaries, as the barriers to entry to creating a robot army to take over the world are smaller than those required to create a human army to take over the world. Current R&D costs maintain a distinct competitive advantage in favor of the incumbent suppliers of highly engineered killing conquest services, but this could abate over time and the move away from a labor intensive industry to an idea intensive industry creates opportunities for disruption by nimble militaries or evil geniuses.

W4M Details and instructions into Lucy’s Party (In Lucy’s Pants)

Dear Potential Lover,

I am excited by the opportunity our future potential sexual relationship may present us. Please read ALL the following to ensure your entry into my pants.

We meet for a light dinner at the Ritz in Mayfair at 8:17 PM. You wear a tailored sports coat, a Pink shirt (a pink Pink shirt is acceptable but not advisable) and smart looking shoes.

Advice 1: It goes without saying that the more upper-class you dress, the less likely you shall be denied entry into my pants.
Advice 2: Photos will be taken between X:00 and X:30 depending on how the date proceeds.

INSTRUCTIONS FOR ENTRY INTO MY PARTY (IN MY PANTS):
When you arrive at the Ritz, take the Hotel entry on the opposite side of the Green Park tube station. When asked by the Ritz doorman “how can I help you Sir?”, you reply “I am here for Lucy’s Party (In Her Pants)”, otherwise you may be turned away. You will be escorted to the lounge area, where you will see me. We will proceed to the dinner table and open our menus. Do NOT order salad. That is what I am having and were you to have it too, it may introduce an element of awkwardness into our dinner. Order either the foie gras or the faux foie gras as an appetizer. After we finish a 150ml cup of cappucino for desert, we must immediately stop talking at which point you are to exit through the front entrance. You are to begin your voyage home.

If you have been chosen for further activies of the night, you will receive a call from my P.A. Ms Gill informing you of such.

Those activities may include:
10:17pm-11:34pm Dancing at the Rock Garden
11:35pm-11:58pm Taxicab drive back to my apt in Notting Hill
11:58pm-12:02pm Entering my apartment
12:03pm-12:09pm Foreplay
12:10pm-12:11pm Entering my pants hehehehe
12:12pm-02:49am Dry Humping

ARRIVAL DATES:
Oct 19th: Andy
Oct 20th: Sanjay, Yves (Late timeslot)
Oct 21st: JingJing
Oct 22nd: [You]
Oct 23rd: Gharzi
Oct 24th: Chase

Here is what I look like upside down:

Please respond with a little bit about yourself, a faceshot and your qualifications for the party in my pants.

P.S. No fatties.

Lucy Gao
Citigroup Real Estate Equity Research
4th Floor, Citigroup Centre (CGC1)
25 Canada Square, London E14 5LB
Direct Line: +44 207 986 4116
Fax: +44 207 986 4341
Mobile: +44 778 220 5450
Email: lucy.gao@citigroup.com

Dear Lucy,

There have been many claimants to the crown “The Greatest.”

• There was Muhammad Ali, a boxer who stood up to the impossible force of the Vietnam war and knocked it out.
• There was Martin Luther King Jr, who shouted down the impossible oppressive power of culturally ingrained racism and had an impossible dream about red clay hills.
• There was Gordon Gekko who used his intelligence, worth ethic and lack of ethics to make millions in the 80’s against impossible odds.

But have these men benched pressed 495lbs? No.

Have these men defeated Chuck Norris in mixed martial art combat? Again, the answer is no.

Do these men have the power to move you….with their minds? No.

Lucy Gao, if you were to allow me entrance into the party in your pants, I will fill your body with an enlightened state of being. You will come to know real ultimate power. In my grasp, you will find that your dreams can come true. And you will ask yourself, maybe he was born with it? No I was not born with it. With the power of positive thinking, I have molded myself into a dynamo in the gym, on the courts, in the boardroom and even in your pants.

Before last week, I was basically nothing having only started my own investment fund, won the grand slam of men’s tennis, outdrinken and outskiied Bode Miller in the winter Olympics, won the Nobel peace prize for the charity which I started, held the Street Fighter II machine in my local arcade for 15 straight hours and bedded 5,437 women. This week, I have accomplished so much more and been named the CEO of Vayner Lehman Stern UBS, after I brokered the deal which brought them together in a merger. The key was getting them to focus on my revolutionary “never lose money” investment strategy.

Now that I am somebody, I can with conviction proclaim that if you let me into the party in your pants, I will defeat the impossible. If I am going to be in your pants Lucy, then I am going to be in your pants with PASSION.

The Greatest,
‘Seksey’ Aleksey Vayner
CEO of Vayner Lehman Stern UBS

Prompted by this article about how Entourage creator/producer “Entourage” creator-exec producer Doug Ellin is writing a new show, “a mature version of ‘Entourage’ set on Wall Street”, Mr Juggles sent this email to Kaiser and me.

To: Kaiser and JD
From: Mister Juggles
Subject: we should be writing this

BTW, who are his friends who are making $40-50mm a year on Wall St?
Did he grow up with Stevie Cohen?

“Entourage” creator-exec producer Ellin is writing an untitled half-hour he described to Daily Variety as a “mature version of ‘Entourage’ set on Wall Street.” The action revolves around a fortysomething hedge fund trader and his circle of guy pals.

Project is the first to emerge from Ellin’s overall development deal with HBO, which renewed “Entourage” for a fourth season last month.

Ellin will exec produce the pilot with Stephen Levinson. Idea was hatched by the pair after they realized several of their friends from college — “regular, fraternity brother-type guys,” Ellin said — were banking $40 million-$50 million a year on Wall Street.

“They make Vince look like a peasant,” Ellin joked.

I wrote back:

I don’t find it very believable that they have mulitple college friends banking $40-50mm on “Wall Street”. What are they, “Stock brokers” or “business men”? Maybe they are “executives”.

Does anyone even have multiple friends from college who are pulling $10mm per year before 30?? How many people in finance total are pulling $40-50mm per year? Why go this route when they could get actually get some authenticity with the already scripted Murray’s Hill 101 Pilot.

Time Value of Money Sample CFA Exam Question

Larry Ellison, CEO of Oracle, is deciding how much to tip at his local Benihana. He comes to the conclusion that the fried rice was so delicious and the onion ring volcano flamethrower so impressive, that he is going to tip with a large interest bearing note. The note will have a future value (FV) pf $9,107,369. The rate of interest on it is 9%, and it compounds monthly until it comes to term 6 years in the future. What is the present value (PV) of the interest bearing note? Bonus what does the number spell out on your calculator when your calculator is vertically inverted?.

A) $5,318,007
B) $5,318,009
C) $5,318,008
D) ¥256

Explanation:

The correct answer is C. The questions gives us this informtion

FV = 9107369; I/Y = 9/ 12 = .75; N = 6 × 12 = 72.

Using your non-HP12C but still CFA approved calculator you should utilize these key strokes to achieve success:

-9107369 [FV] [Enter] .75 [I/Y] [Enter] 72 [N] [Enter] [CPT] [PV]

*Bonus Answer is contained within the comments.

From Carter’s Adventure, here is a list of three habits of billionaires:

1. Exercise daily.
2. Follow your passion.
3. Read. A lot. At least two hours a day, but many said they read four or more hours a day.

This type of advice always makes us reflect back on the McSweeney’s piece, 7 Habits of Highly Successful People:

1. Skiing
2. Yachting
3. Snorkeling
4. Golf
5. Polo
6. Dinner parties
7. Shopping

In our professional opinion, the best way to become obscenely wealthy is still the old fashioned way in 4 simple steps.

Western World Version

1. Take outrageous risks with extremely high upside.
2. Be the 1 out of 500 million for whom it pans out. This one is key so focus on it.
3. Attribute your wealth creation to your own hard work, your own genius and the power of your business plan. Be sure to stress how your wealth was singularly made possible by your unique endowment of elbow grease, street smarts, common sense, all of which your competitors obviously lacked (proven by how poor they are compared to you).
4. Buy a mega yacht and/or athletic team.

Russian World Version*

1. Acquire assets illegally either from or with the help of the state. Extra rubles for seizing commodity related assets
2. Kill all your rivals.
3. Buy a mega yacht and/or athletic team.

* The Russian version is only 3 steps reflecting certain “efficiencies” in the Russian billionaire market.

Last night, the news program 60 Minutes, had the Hewlett-Packard (NYSE: HPQ) twins, Pattie Dunn and Carly Fiorina, on back-to-back.

Lesson learned? Self delusion is incredibly powerful.

Pattie Dunn thinks she is the bestest. Nobody can take away the fact that she is now a member of the Bay Area Hall of Fame and she wears it in her disposition. Not even the light exposing her pretexting and corporate board spying can stop her internal propaganda machine.

She maintains:

1. She never did anything illegal or unethical.
2. She does not deny pretexting or spying on board members (how are these not at the very least unethical). She insists it was all vetted through lawyers and done with the board’s approval (if there was a leak, why would he approve these acts?)
3. As to the attempts to spy on/pretext board members which grew into spying on and pretexting journalists, Patti Dunn had no knowledge of nor involvement in the latter activity.
4. This entire affair is just Tom Perkins out to get her. Dunn’s version: After the legal ethical board-approved (according to Dunn) spying and pretexting revealed that George Keyworth was the leak, Pattie let Tom know that she was going to have him removed from the board. Pattie says that then Tom was outraged, and that he thought all along they would just let the leak know they found him out and make him promise to never do it again. Keyworth was a friend of Tom Perkins, and in retaliation of Dunn’s removal of Keyworth from the board, Perkins created a massive PR campaign about the spying/pretexting and brought it to the authorities, spinning it against Dunn just as a big FU. Perkins version: he quit the board as soon as he learned that Dunn had authorized spying and pretexting.
5. She shrugged her shoulders when asked by Lesley Stahl why it was that HP had to settle with Keyworth, after they removed him from the board. She said she didn’t know why. Certainly not because settling is something you do with someone you don’t want to sue your company for illegally violating their privacy, right Pattie?

Dunn thinks it’s all about her, Perkins is out to get her, spinning it against her. She takes no responsibility for acting in a way which is clearly unethical and likely illegal (even if it was vetted by HP’s legal department). She bears all the hallmarks of a bureaucrat, an executive’s executive who rose not by adding value or by being a leader of men, but by protecting herself, controlling her battlefields and using poltical tactics. She had the same look on her face as one of the people featured on the To Catch a Predator Dateline series, steadfastly sticking to the idea that she had done nothing wrong in the face of explicit contradictory evidence.

After a commercial break, 60 Minutes trotted out Carly Fiorina, who has a fortuitously-timed book coming out on Tuesday. Carly is well known as the CEO who was like the pilot of the Hindenburg, making HPQ stock soar from the the 60’s to below 20 and making accretive acquisitions (e.g. Compaq) go smoothly. She claims she was blindsided by her firing. Given that she did such an incredible job at the helm of HPQ, it was very odd that HPQ stock bumped 10% on the news of her firing and that HPQ has done very well after changing course from her corporate direction.

Carly on her firing:

“There were no improprieties. I can only conclude it was personal in some way.”

Here is an article from the day she was fired titled Fiorina out, HP stock soars
.

“The stock is up a bit on the fact that nobody liked Carly’s leadership all that much,” said Robert Cihra, an analyst with Fulcrum Global Partners. “The Street had lost all faith in her and the market’s hope is that anyone will be better.”

When faced with a resume of illegal and unethical acts, Pattie believed the opposite to be true. When faced with a resume of ineffective leadership, poor stock performance and questionable corporate direction, Carly maintained that the opposite is true. At no point during either interview did either woman give a hint that they were operating a reality based existence. Both women are referred to as “strong” but if you watched them, their strength was their craziness that allowed them to function completely adrift from the the ship of reality.

Anyone who even thinks about deserting this mission will be cut up into 198 pieces. Those pieces will be stamped on until what is left can be used only to paint walls. Whoever takes one grain of corn or one drop of water… more than his ration, will be locked up for 155 years. If I, Aguirre, want the birds to drop dead from the trees… then the birds will drop dead from the trees. I am the wrath of god. The earth I pass will see me and tremble. But whoever follows me and the river, will win untold riches. But whoever deserts…

–Don Lope de Aguirre, but also possibly the mission statement for Pirate Capital

Past Quotes Entirely Relevant to Investing

Molybdenum has been making the rounds as an alleged additive for making steel alloys and as a catalyst in the production of certain petrochemical products. As a metal with consumable uses, limited substitutes and a limited supply, it tends to have inelastic demand….allegedly.

I allege that much like the sasquatch, molybdenum does not, in fact, even exist.

Points Which Point to the Non-Existence of Molybdenum:

• Has anyone ever touched molybdenum? Or seen it? I’ve seen or touched platinum, silver, gold and most metals, except uranium which I am willing to take on faith. I’ve never met anyone who had a molybdenum cufflink or a a ring with a molybdenum setting.
• Molyjhkldjaslkdjaslkd. Not a name you would give to a real substance, much less a metal. It seems like an inside joke about Molly B’s Denim. Who is this Molly B? And where are her denim dungarees?
• The price has gone up from $2 per pound up to over $40 in just a few years (currently in the mid-20’s). It is clear as to why the market hasn’t corrected itself — it is difficult to bring on formerly uneconomic molybdenum mines or copper mining trailing operations (where molybdenum can allegedly be found) when molybdenum does not actually exist.

Recommendation: Per Mr. Juggles Investing Commandment 5b you must verify that that which you think exists in an investment, actually exists. The non-existence of molybdenum could prove a crushing blow to stocks of firms who allegedly mine the possibly fictional metal.

Farm animal assets valuations should rise on news of new alternative uses, specifically in the Norwegian and Danish markets:

The Norwegian Food Safety Authority’s section chief for animal welfare, Torunn Knævelsrud, could not rule out that such a bordello could be legal here as well.

“It is difficult to say yes or no,” Knævelsrud told Aftenposten.no.

As long as basics like shelter, feed and care are in place, and injury or suffering to the animal can not be documented, there are no other ways to attack an animal bordello under existing Norwegian law.

…

A farmer who sells animal sex said he is extremely surprised that foreigners are ready to travel so far for it.

“But the clients tell us that it is much simpler to buy animal sex in Denmark than in their own country,” a horse owner from Nord-Jylland told the newspaper.

We will leave it to you to read the rest of the article. Suffice to say that if you own an attractive animal, you have definitely experienced asset appreciation from the opening of new end markets. This only strengthens our Camels, the Next Big Thing thesis, especially for camels with all the right curves.

I just called [unnamed European I-Bank] with questions pertaining to a deal they are banking and in which my firm is participating. [European I-Bank] had sent my office a document, requesting my reply on a certain issue in the aforementioned deal. They listed two contacts at the bottom of the memo, numbers for London capital markets types who wanted to get feedback on the issue and answer any potential questions or problems we had. Bear in mind, this issue needs to be resolved today and they sent us the memo yesterday afternoon.

So I contacted the first number.

“You have reached the line of [Guy No.1]. I am on Holiday until Octobey 9th, please refer any questions you may have to [Guy No.2] at extension [5555].”

I call [Guy No.2] at extension [5555].

“Sorry, this is [Guy No.2] and I am out of the office until October 16th. Leave me a voicemail and I will get back to you when I get back.”

I then look back to the document and dial the 2nd listed contact’s number.

“You’ve reached [Girl No.1] and I unavailable to answer your call. I will be back in the office on October 4th.”

Recommendation: Short Europe and their non-stop Holiday-taking investment banks. You can’t get it done or make it happen, if your team is never at work.

All man to woman (M2W) relationships reduced to a simple easy to follow chart. We endorse all attempts to simplify all complicated human interactions into charts and numbers. Especially when they are dead on accurate.

(Via Typhoon Ahlwoon)

In response to sluggish ad sales through BlogAds, we did a thorough SWOT analysis of the situation, hiring innumerable consultants and people with impressive titles. What we found through this research is that Long or Short Capital advertising is a Giffen Good.

Giffen Good

A Giffen Good is a product for which a rise in price of this product makes people buy even more of the product. [Per Wikipedia]

Upon the recommendation of our consultants, we increased the price of all our BlogAds to double their existing levels. We needed to communicate that advertising on our site was a good value, and the best way was to increase the price of the ads. This dovetailed nicely with an integral life lesson that my father taught me as a young child: if something costs a lot, it must be better than something which costs less. (Why is this the best bike? Because it was the most expensive one son, that’s all you need to know). By raising the price of advertising, we signalled an increase in quality of our product. And, if we signal it enough, this will eventually become an accepted truth (The Goebbels technique).

The evidence is now in and the results are clear. The number of BlogAds purchased in August under Price Regime X was 0. The number of BlogAds purchased in September under Price Regime 2X was 1. We now project that the number of BlogAds purchased in the next 30 days under Price Regime 4x will be 2. Note the incredible positive elasticity of demand (+1). Below is the actual demand schedule for the number of 1 month BlogAds which were submitted to us vs a leading competitor.

LongorShortCapital.com Demand Schedule

As compared to: BrandX.com Schedule

Long or Short Capital — 1 out of 1 leading analysts agree that our advertising beats BrandX.com’s advertising in getting out even the toughest household stains in having a positive elasticity of demand.

Robert Burton, CEO of Cenveo (NYSE: CVO), gave a tour de force performance in strong-arming a company into accepting a takeover offer. The target of Cenveo’s $47 per share bid is Banta (NYSE: BN), a printing company about the same size as Cenveo. Some choice cuts from the Cenveo CEO’s letter:

Dear Ms. Streeter [CEO of Banta]:

As you might expect, following our prior proposals to acquire Banta, we were amused to read in your press release on September 14th that Banta has adopted “strategic initiatives” to “create value for shareholders.” At Cenveo, we are always working to create value for shareholders and do not wait until we have received proposals from third parties to do so.

The fact that you continue to dismiss our proposal as “illusory” is outrageous and further demonstrates your entrenchment. I personally believe that you and the Banta board have breached your fiduciary duties to shareholders by taking actions to entrench yourself by not responding to my September 5, 2006 letter and the $47.00 per share proposal to purchase Banta.

Further, to say, as you did on your call, that we were unable to reach an agreement on the terms of a “standard” confidentiality agreement is a joke. We have offered to meet with you and to provide you with information about our commitment from Lehman Brothers and Wachovia WITHOUT OBTAINING ANY CONFIDENTIAL INFORMATION FROM YOU.

…

The fact that you and your board continue to hide behind your poison pill is in my view 110% un-American.

…

I also find it comical that overnight you have come up with a $35 million cost savings plan. This plan has significant execution and market risk as compared to our fully-financed offer.

…

I am again requesting you to consider our proposal as a way to save Banta for the long haul and deliver immediate shareholder value. You should do what is best for your shareholders, not what is best for you and your board. Thank you.

Sincerely,
CENVEO, INC.

I recommend reading the whole thing. It comes close to but doesn’t cross the Patrick Byrne line of executive overboardedness.

HP-12C. I wanted to liked you. I wanted to love you.

I grew up seeing you in the hands of rich elite men of finance, men so powerful they could choose any model to calculate bond payments or whatever it is exactly people use financial calculators for these days. And yet they all chose you. Your gilded metallic head and your firm tightly constructed box conveyed elegance. You were refined yet sleek enough to look good in your leather case. I wanted to be a man so I could press your buttons and create binary reactions in your core logic.

But then that day came, when I pressed your buttons for the first time, receiving tactile feedback on the tips of my fingers as your LCD lit up with numbers. The experience was entirely incomprehensible. I knew the first time would be different, that it would take getting some used to before it felt natural, but I never knew it would be so complicated, so radically different from my intuition and a complete departure from every single calculator I had used up to that point. I cannot calculate interest payments on you, I can’t even add 2 + 2 on you. I gazed at you for 15 minutes in my CFA Prep Class, the impenetrable enigma of your buttons glaring back at me and I couldn’t make anything happen. I could not get it, or you, done.

My cohort is the first to be digital natives, so the problem doesn’t lie with my tech literacy. Manual? In these times, if you can’t be picked up and understood, then you are a relic. Usability, intuitive design, all that junk are Now.

You, like many childhood fantasies, are a busted balloon, timeless in my youth, somehow extremely dated in my manhood. No one calculates like you do, you are backwards and twisted, hewn by men who used punch cards to learn computing. I am not even sure what purpose a calculator really servers in a world of ubiquitous computing power. But I do know my CFA Exam mandated model, will not be you, but instead be the TI BA II Plus.

As the fire dims in the old men of finance, as they retire to super-yachts and cheating on their mistresses with their mistresses, so too will you dim further, HP-12C, your place obsolete, your model changed for the new or the different and your glory a distant memory of a time past.