Long or Short Capital

I’m back and fired up about organized labor again.  In their most recent display of genius employees at Chrysler have been attempting to secure financing in order to fund an employee sponsored bid for the automaker which is in being sold by the parent, Daimler-Chrysler (NYSE: DCX).  They claim that the interest of the employees would best be served if they themselves were the owners of the business.  I think this is the best idea I have ever heard.  I would love nothing more than the employees to buy Chrysler (Ed Note: too late, as the denizens of the 7th circle of Hell, Cerberus just acquired the Chrysler for $7.4bn), realize they are completely uncompetitive because of their own retirement benefits and wage structure and then proceed to lose billions of dollars while they sit around, point fingers and refuse to give up their ludicrous pension and healthcare benefits.

I think we should mobilize the capitalists and entrepreneurs of the world to help these employees along.  They deserve to be financially responsible for the disaster they created, they earned it, literally.  I am announcing a campaign to raise money to help these people buy their P.o.S. company.  I pledge $1,000.  Who’s with me?  Just think to yourself – how much would I pay to be part of a comedy of errors that bankrupts the UAW and embarrasses unions forever?  Then make a pledge.  Remember the money you’re pledging won’t get you a piece of Chrysler equity – it’s a pure donation.  I have however arranged for pledging members to get the rights to the reality TV mini-series “My Little Squirrely Union Boss” which will air immediately after “The Real World Detroit”.  These rights are likely to be worth division by zero percent more than the Chrysler equity anyway.

The AP is reporting that the Motion Picture Association of America has trained two labradors to sniff out pirated DVD’s. The dogs are named Lucky and Flo and they have reportedly help uncover 1.2 million pirated DVDs. As a result of this dog-gone amazing success:

Malaysian movie pirates have placed bounties on Lucky and Flo who have so far helped uncover $3.5million in fake CDs and DVDs during raids on warehouses….Theblack Labradors will participate in more Malaysian raids, but they also could be deployed to other countries for anti-piracy operations from time to time, Gane said. He declined to identify which countries were being considered, citing security. Lucky and Flo are the world’s only dogs trained to detect a chemical used in making discs, the MPAA has said.

I call bullsh-t. Bullsh-t. Bullsh-t. Bullsh-t. They are not the only ones. I recently trained my dog to smell forged signatures – now he sits at the bank teller and barks whenever someone tries to endorse a check that’s not theirs. He is the only dog in the world trained to smell a chemical used in forged signatures. He has put an end to identity fraud in New York City and he may be deployed to other cities which shall remain nameless for security reasons. He has a bounty and a blue bow on his head. Also he can smell fake orgasms, which was why I got rid of him in the first place.

Recommendation: Short lies and bullsh-t.

Kurt Vonnegut died yesterday.

So it goes.

It will be a while before we get another author like him. You need a f*cked up life to be as darkly and ingeniously satirical as he was. His mother committed suicide on Mother’s Day when he was 21. That same year he dropped out of college and enlisted in the army during World War II. He fought on the front lines of the Battle of the Bulge (one of the bloodiest in American history), ended up stranded alone behind enemy lines and wandered for days before being taken as a POW. He then arrived in Dresden shortly after the Dresden fire bombing, where somewhere between 35-100k people died in grotesque fashion. He spent three days dragging bodies into mass graves. After it became clear that there were too many bodies to bury he watched Nazi’s incinerate the dead with flame-throwers.

One would think all that would ruin your sense of humor but it instead created Vonnegut’s.

“I tell you, we are here on Earth to fart around, and don’t let anybody tell you different.“

Global warming has been a hot topic recently and everyone seems to be focused on the high-profile sources of carbon emissions: cars and power plants (see related research Make Emissions Delicious, Stop Global Warming).

What people are forgetting is how much of global warming is a result of flatulence, belching, dung, and other forms of so called “poop-lution”. Ever seen a steamy terd? We know they’re gross but more importantly they are warming the globe and ruining both the o-zone and your favorite ski area. Let’s take a look at factual graphs designed by science.

As you can see methane is responsible for 13% of greenhouse gases and 35% of methane comes from poop-lution, that means almost 5% of global warming is from steaming pooplets.

Recommendation: Until the ingenious Kyoto Protocol, collecting and burning dung was just a fashionable hobby. Now it’s an outrageously profitable enterprise and we want in. AgCert (LSE: AGC) is a $100mm market cap company who’s sole source of revenue is burning dung. We are long them. We also have put seed capital in an apparel company that sells hats that say “No Farting”. We think trendy fad marketing like this will generate millions of cubic cms of provable methane reduction which we can monetize on the European Emission Credit marketplace.

We are initiating coverage on the 4th dimension with a sector rating of “Yes Please“. We believe the 4th dimension is under-followed by the Street partly because it’s existence is based on string theory and currently, not empirically verifiable. When people get nervous about the existence of a company or industry, that is when LoS starts looking to lay down the big bones.* This thesis has previously worked well for us in the hot boobs sector where several years ago people were calling surgically enhanced boobs “fake.” Through extensive due diligence we determined that you could touch, taste, and smell silicon/saline boobs and hence they aren’t “fake” at all, they are just glorious, we’ve been long them and it’s paid off, HUGE.

This time it’s the 4th dimension everyone is calling fake and once again we don’t buy it (figuratively) because we recommend buying it (literally). We think the 4th dimension is the lowest cost location in the world. One artist in San Francisco is selling real estate in the fourth dimension realizing profit margins of 99.8% — without any expertise or track record as a 3D real estate broker.

Recommendation: We recommend anything you can get your hands on in 4-D, especially if you can get your hands on a pair of (3)4-Ds. If you’re having trouble identifying direct investment in the 4th dimension, try derivative plays in tessalation which lets you travel through the fourth dimension via a Wrinkle in Time or in 3-D glasses which look sweet and when used in the 4th dimension make everything 12-dimensional, i.e. decadimensional +2.

*This thesis is consistent with Mr Juggles Investments Commandments 5a and 5b because while we would never invest in a company with a fictitious CEO, if a CEO was nearly rumoured to be fictitious, this may well be the kind of mania we would like to bet against.

Ben Graham usually gets credit for being the inventor of value investing. Recently, we sat down with Jacob who says he perfected the art about 4,000 years before Mr. Graham came along:

LoS: Hi Jacob

Jacob: Shalom

LoS: How did you get into value investing?

Jacob: Well I have to say it started at birth. Actually that’s wrong, it started at my twin brother Esau’s birth. You see he was born first and by his birthright had claim to my father’s estate. He was stronger than I was so I knew even in my mother’s womb that he would probably push his way out before me. Right from the start I realized I wouldn’t be handed anything in life and would have to make my own way. I saw value investing as the best way to do that. I think recognizing my value bias while still in the womb has been key to my success.

LoS: Tell us about your first deep value pick

Jacob: My early career was unique in that I really only monitored one asset: my brother’s inheritence (NYSE: MBI). Having watched it my whole career I was well prepared when MBI fell out of favor with the street, at the time I thought the market in general was over-valued so I was holding a large portion of my assets in the “cash” of the day which was actually just soup. The largest holder of MBI, my brother Esau, always had a Food-At-a-Reasonable-Price bias (FARP). He was tired of waiting for the intrinsic value of MBI to be realized by the market, and he was hungry and wanted some soup. I saw an opportunity to buy MBI at 0.003% of intrinsic value so I sold my soup “and the rest is Old Testament” as they say.

LoS: That’s impressive, what are your best ideas now?

Jacob: Sorry but I never discuss my current portfolio, you never know when someone might dress up in wool and trick you into bequeathing your fortune to him. Or dress his ugly daughter up to look like his hot daughter and have you end up marrying the wrong one. I do have some advice for young investors though: Don’t live until you’re 180. It’s much easier to have lifetime 20% returns if you die at 75.

LoS: Great point Jacob – thanks for your time. Next week Noah tells us how one contrarian bet on weather futures changed his life forever.

Well, Ash Wednesday is coming up so I’m thinking about how some day I’m going to die, and so are you. I thought I should look into some posthumous procedures in order to make sure that I leave this world the same way I’ve lived in it: as a mini-baller. You can imagine my excitement when I found Celestis. Celestis will burn your flesh and bones into a dusty paste and then put it in a vial, tape you to the side of a rocket and shoot you into deep space.

You might think it’s pricey, but you’re wrong. The cost is only $495. Now naturally as a mini-baller I was hoping to pay more and luckily, there’s a premium product. For an extra $800, Celestis will actually put you in orbit around the earth for eternity. Better, closer, warmer. . . but still on the cheap side for my last huzzah. After some reflection I decided I would prefer that the earth orbit me. I sent them an email for an estimate and will report back.

Side-Note: Through a proprietary and patented process we call due-dili, Long or Short has discovered the reason that NASA has a $17bn budget, a staff full of “rocket scientists” and still can’t make a plane that won’t shed ‘suitcase sized debris’ every time it takes off. It’s all a scam. That’s not debris, it’s the dead, and NASA is KILLING IT by taking them to space, or sometimes just really high off the ground.

In mid-06, I added a new (additional) computer monitor to my desk thinking – MY PRODUCTIVITY COULD DOUBLE. HUZZAH!

I left my bloomberg ticker screen on one monitor and any work in progress on my other monitor. After three weeks my right eye was twitching which was worrisome since I’ve had the eyes of a falcon since I was two; literally my dad shot a falcon took its eyes out and replaced my human eyes with falcon eyes – it’s sort of like LASIK but more wild. So I went to the doctor and he told me I had an eye problem and it was either because I was using rotting falcon eyes or because there was a red and green flashing screen in my periphery 12 hours per day.

Well I fixed that, now my Bloomberg screen is directly in my line of sight and I moved any models or real work to my periphery at all times. My eyes feel better already. And I always know the most recent price of every stock I follow which comes in very handy for making sound investment choices and stumping your boss.

me: “Hey, Steve, you see what LEN did this morning? . . . Up 120 bps, yeah, bet you didn’t know that”
my boss Steve: “Falcon Eyes, you’ve stumped me again, give yourself a raise”

See? Amazing.

Recommendation:

Phase 1: Get yourself some falcon eyes.
Phase 2: Buy a Bloomberg subscription.
Phase 3: Open your launchpad, fill it with tickers and stare at it all day long.
Phase 4: Profits for your firm and for you.

This post was 80% true story.

I know you’ve all been wondering about the big question. Would it be possible to work the terms “skin flute” and “chief ankle grabber” into one SEC filing? Well you can stop wondering. Bob Chapman -the alleged inventor of the 13D letter– has done it. For a true Christmas treat please do read the full text of his most recent sketch comedy letter to management (last two pages of this Glenayre Technologies 13D).

A small sample:

On numerous occasions, Chapman Capital has received telephone calls from individuals claiming to be parties other than themselves (“pretexting”), with the occasional delivery of profanity as part of this impersonation. In fact, several months ago we received a call from someone apparently pretending to be “Jimmy Caparro,” who demanded that I personally “genuflect before [him] and play a song on [his] ‘skin flute’.” Though I do not have any knowledge of Mr. Caparro’s sexual preference, I was confident that Mr. Caparro was not the person making that call, even in the highly unlikely event that that this may have been his personal fantasy.

Not only can he write, but Mr. Chapman also claims to have charged wild gorillas, snapped two vertebrae while body surfing, snuggled with a cambodian jaguar in a hammock, and showed up for his first job interview bleeding from the head after a near-fatal motorcycle accident. I’m reading all this thinking, wow, this guy really understands risk and reward, I would like to give him all my money and trust him to prudently preserve and grow it.

As with any larger than life personality he has lovers…(quotes from TraderDaily.com (free reg required))

the best part of his whole persona is that any woman/girl who’s dated him knows what a sweet guy he actually is. My bet is that any detractor on this thread is simply jealous — what a life Bob has led and he’s not even 40 yet! Take it from someone who’s “been there,” the guy rocks.

…and haters

Bob Chapman’s ego is the size of kentucky. He is an over-rated piece of trash. Treats people like garbage and thinks he is a gift to the earth. He manages a small hedgefund in california because he can’t hack it in NYC. His attitude definitly is the cause from having a small penis and being a virgin. He needs a good ass kicking because he is one of the most horrible people I have ever met. I bet he got butt f*cked by one of those monkeys and liked it.

Recommendation: We think Chapman’s overexposure creates liquidity in the otherwise uninteresting hedge fund manager sector. We think there is easy arbitrage money to be made buying his sense of humor and bohemothic vocabulary while simultaneously selling his life insurance policy. This creates a synthetic long exposure to SEC-filed gay jokes but limits your downside risk in case he decides to go nude-snowboarding with the abominable snowman.

1. My fellow mini-ballers who taught me that mini-balling isn’t about how much money you make, it’s about your ability to spend way more than that for no good reason
2. The hot girls who work at the guess store and laugh at my jokes when I buy $300 jeans
3. The S&P for constantly underperforming my portfolio
4. Mutual funds for constantly underperforming the S&P
5. The potential energy of my bonus
6. My ability to learn new skills: I learned how to juggle in 10 minutes this morning using crumpled up $100 bills
7. My new RED Amex and its versatility: B&T girls think it’s like a black card and non-profit chicks think it stops AIDS in Africa (which happens to be a great way to push for unprotected sex: “don’t worry about that baby, my RED card eliminated AIDS.”). Also there’s no annual fee
8. My family who isn’t impressed by my income, my credit card debt, or by my profitable, dividend paying, financial humor blog

Please share things you’re thankful for in the comments.

The sell-side is full of hard working people and this isn’t meant to offend any of them, they usually have valuable information.  My gripe with them is that they are flippant, fickle, waffley, double-talkers.  The examples of this are countless, but today I’ll focus on two recent research report titles that have shown up in my inbox:

“Alstom: Full Steam Ahead – NEUTRAL”

Alstom’s earnings are going “Full Steam Ahead” just like the choo-choo trains they manufacture, but this analyst would prefer to wait for PROOF that margins are still going up before recommending buying it.  Good idea analyst, chances are the stock will stay at a full-steam standstill in the meantime and will only go up AFTER they prove margins are going higher.

“El Paso Corp. (EP.N): Initiation of Coverage:When Opportunity Knocks, It’s Time to Listen; Equal-weight”

Well done again analyst, after months of research and a lengthy initiation report he has determined that opportunity is knocking on his door in the form of El Paso.  Upon hearing this knock he recommends jumping out of bed, putting on your holdneutral robe, answering the door, and saying “Hi El Paso, I know you want to give me free money but these equalweight panties im wearing are all in a bunch, so you’ll have to come back later after you’ve appreciated 30%”.

Recommendation:  Short sell-side analysts, long analrapists.

If you have any good sell-side report headlines send them to us with our new submit form or by email at kaiser.edamame@gmail.com.

On my way to work on Friday, I got off the subway and was approached by a hot chick wearing a pink ribbon. She claimed to be collecting money for “the fight against breast cancer.” It was the first time such a pretty girl had said the word “breast” to me and the gears inside of my mind started turning.

Tim Harford’s Undercover Economist column on Charity expanded the idea for me further:

In fact, the closer you look at charitable giving, the less charitable it appears to be. A recent experiment by John List, an economist at the University of Chicago, showed that donations are less than magnanimous after all. Using controlled trials to compare different methods of door-to-door fund-raising, professor List’s team discovered that it was much more important … to make sure that the fund-raisers were attractive white girls rather than a dowdier assortment of males and females representing all shapes, races, and sizes. This dramatically increased the average contribution, because many more men decided to give money.

This led me to realize these two things:

• Breast cancer is a serious issue and warrants significant funding
• The best people in the world at getting/raising/borrowing/stealing money are smoking hot chicks.

Why not combine the indisputable nature of these two truths into a money tree for a good cause? My campaign is called “Save These Hot Boobs from Cancer” and it involves beautiful women with big hearts and bigger breasts appealing to the love all guys have for a great pair of tatas. Let’s pretend you’re walking on the street and a well-endowed blonde with a big smile says to you: “Statistically speaking my perky boobs have a 35% chance of being ruined by a malignant tumor, would you please contribute to the fight against breast cancer?” If you don’t give money to that girl then you probably don’t have a conscience.

Chartible organizations need to penetrate the industry leaders in solicitation — beautiful women. A first mover will have an enormous market opportunity.

Let’s do a little math:

• Incoming earning males in the western world = 1 Bn
• Percent of income earning males who would give money to a babe for a good cause = 100%
• Average donation per income earning male when approached by a “Save these hot boobs from cancer” representative = $20
• Fund raising potential = (1 Bn) x (100%) x ($20) x (% of incoming males approached).

If we can reach even 50% penetration we can raise over $10bn to fund research on hot boobs cancer. As noted above, these estimates are empirically proven using math and advanced probability techniques. With so much money thrown at the problem, the only remaining issue is what all these hot chicks are going to do a year from now when we announce we’ve found a cure.

So I was thinking over the weekend, what’s most important to me? I decided it’s my private parts. As I thought about these valuable assets I started thinking about how reckless I am with them. I realized I should either be more careful or take out an enormous insurance policy on them. I had heard of this being done before. I had also heard Lloyd’s of London was the place that could help me so I rung them up.

Lloyd’s operator: Hello, Lloyd’s of London how may I direct your call?

Me: Hi, I’d like to insure my privates.

Ll: Excuse me?

Me: My John Thomas. My knob. And my bits too.

Ll: What???

Me: My privates, I’d like to insure them, they are very valuable to me.

Ll: Sir, we can’t insure your privates unless they are income generating. They have to be valuable to someone else for us to insure them.

Me: Why? They’re valuable to my girlfriend.

Ll: It’s because of moral hazard, sir.

Me: Moral hazard? That’s a big word for a switch board operator.

Ll: Two words. We have to prove that you have an incentive not to let the goods be damaged.

Me: I’ll show you my incentive.

Ll: Are you hitting on me?

Me: Maybe. Depends on what you look like. What do you look like? And does Lloyd’s do field apprasials for their policies?

Ll: Cheers.

*CLICK*

I am naked long my privates and am looking to hedge out my exposure in the open market. Any ideas on how to do so would be greatly appreciated.

From our Mexican Desk comes this missive about the Pert Contagion which is posied to sweep the emerging markets in a way heretofore unseen.

You’ll all be happy to know that I sat down with a team of crack Mexican scientists and we’ve decided on the spanish translation of the number Perf. Or perhaps they were Mexican crack scientists… well, whatever, that’s not important. What’s important is that the number is “perdo” (pronounced “pair-doe”).

Polls show the acceptance rate in Latin American countries is an astounding ninety-perf percent overnight. Of course they also believe there are leprechauns that live in the hills beside their pueblos.

You can’t stop [Perf aka Perdo]…

Once an investing contagion starts, it continues forever (until it stops). We continue to be very bullish on Perf and see huge opportunities in the so-called “bottom of the pyramind” — the 4 billion poorest people in the world.