Long or Short Capital

It’s only art if someone will pay for it.

Anthony White is money. As a brash twenty-something living in a town of 11,000 people in Yepoon, Australia, he began his career as an artist. Shortly after becoming an artist he was tired of being poor. So he got a job at Credit-Suisse as a “stockbroker”. Most of our readers are probably saying a “stockbroker” isn’t a real thing, it’s just what ignorant people call everyone who works in the cut throat world of high finance. Unfortunately the only articles written about Anthony are by ignorant art critics, so he’s a stockbroker, and that’s that. This is where the story gets good.

After “broking stocks” for six years his girlfriend told him that he was too focused on money and he needed a hobby. So to appease his grilfriend he started painting again in February of this year, but he also wanted to teach his grilfriend an important lesson which was “Don’t pretend that you don’t like money, because everyone likes money.” That’s when he invented The Money Series.

In The Money Series, Anthony paints a picture and the only thing on the picture is a $ (or other currency) sign and a number like this:

He then sells the picture for only and exactly only the amount painted. E.g. the painting above was sold to Mister Juggles for $87. He only paints one of each number and he refuses to paint them out of order so he must have a buyer for every number in order to continue. In our humble opinion this is artistic tomfoolery and financial genius. A few things we like:

1) He is basically selling you a colorful price tag
2) He is limiting supply and via his self-imposed price control system he is nearly guaranteeing the paintings will be good investments. The $4 piece just sold for $500 in the after-market.
3) He is mocking over-priced art and giving you the opportunity to mock it with him when you hang it up in your house and proudly display to all your visitors how much you spent to cover your wall with a commisioned painting.

All of our staff is or will very soon be holders of his art and we love it. So if you have a non-artist income then go to his site anythonywhite.net right now and buy art that’s so liquid it’s practically M2.

I was looking for an email I recently sent to the other LoS writers where I attached a 42-page white paper that explicitly lays out the spending habits needed to achieve baller status, it’s entitled “A Psychographic Analysis of Luxury Spending” and if you’re serious about becoming a baller I highly recommend you read it.

I knew I must have used the word “baller” in the email so I searched for “baller, not mini” and gmail displayed messages “1-20 of 37”.  37 seemed like a respectable number of times to have talked about being a baller over email but was a little below what I might have hoped.  Luckily I was reassured of my priorities after the following searches:

get it done –  1-20 of 50
I searched for the phrase in “quotes” so it only picked up usage of the whole phrase and I think 50 is a respectable number of times to have told people to get it done over email.

mini-baller –  1-20 of “about 80”
Again searching in quotes, this was interesting as apparently I’ve used mini-baller 116% more often than baller by itself.  This clearly shows how far I have to go before becoming a baller given that one of the requirements of being a baller is not knowing what a mini-baller is.

LGA      –       1-20 of  “hundreds”
Now I’m getting somewhere.  The only emails where these three letters showed up in this order are 1) itineraries for my jet set lifetyle flights out of Laguardia and 2) email exchanges between me and a tight guatemalen chick I know named oLGA.  In either case the fact that there are hundreds of these emails is a huge win for me.

Below balance alert –        1-20 of “hundreds”
I have a “Below balance alert” from Chase set up that notifies me daily anytime my checking account balance is below $100, I set the alert in March 2005 so given that there’s only 545 days which I could have received this notice, I think “hundreds” is a pretty mini-baller outcome.

I loaded up the E and created this “Pie of a Pie” chart to represent the results clearly.

You may have learned some of the ins and outs of being a mini-baller, now it’s time we teach you about the newest mini-baller game of chance:  Mini-Baller Roulette.

You are probably familiar with “credit card roulette”: a bill comes for a shared dinner, everyone puts their credit card in a hat and one card is chosen at random thus “winning” the right to foot the entire bill.  You are also probably familar with “russian roulette” wherein you and a friend load a hand gun with one bullet and the two of you take turns putting the gun to your head and pulling the trigger until someone wins!

“Mini-baller roulette” takes from both the yuppie and eurasian variants to evolve the game to the next level.

Rules of Mini-Baller Roulette:

Players: 4 or more mini-ballers
Age:  Any age as long as all the players are mini-ballers
Object: To spend money and get it done
How to Play:  Mini-ballers should arrange themselves in a circle preferably in a public area.  Each mini-baller removes his gold or platinum credit card from his wallet and passes it to the player on his right while saying “Buddy, get it done”.  Then all mini-ballers go shopping for anything they’ve always wanted but never wanted to pay for. While shopping there is only one rule:  Don’t hesitate.  At the end of the game credit cards are returned to their original owner unless it is discovered that one of the mini-ballers has hesitated.  In this case the offending mini-baller must continue shopping using HIS OWN CARD until the rest of the players are satisfied that he has gotten it done.  The mini-baller who spends the most money on his friend’s card is the winner and it is his responsibility to organize the next game of mini-baller roulette.

Make it happen.

So I’m in Berlin on the day of the World Cup Final and it’s the busiest day in the city since World War II and I think these people hate money.

I’ve been trying to buy a French jersey:

• Went to big department store but they only carry German jerseys.
• Went to the largest sporting goods store and “World Cup Merchandise Headquarters” but they are closed because it’s Sunday.
• There is no one selling jerseys on the street, only lanyards. The supply demand balance in lanyards in Berlin is completely out of whack; I predict a 300% decline in lanyard prices.
• Went to Nike Town – they are open but they don’t sponsor France, adidas does.
• Went to adidas brand store and they are open but have 0 supply of anything french; they have been sold out for 3 days. I asked if they knew what FedEx was and they said ‘nine’
• Tried bribing a guy on the street with 100 euros for the smelly Zidane jersey he was wearing and he told me I was a typical American trying to buy everything. He told me Zidane hates Americans. I said that’s ok because at least he likes money.

Long: Anyone with a brain and ambition in Europe.
Short: Lanyards

Some of you may have heard that working at a hedge fund you can make “a lot of money”. Well it’s true. Now some of you might be saying to yourself: “Wow, how am I going to get a job at a hedge fund so I can make all that money?” which is a good question. But, there are a few of you who are more foresighted that are saying “Wow, how am I going to SPEND all that money?” And that’s really the more important question, because let me tell you, it’s not easy.

The first step you need to take to make sure you’re good at spending money is to properly categorize yourself, I believe there are two socio-economic groups which are important here: “Ballers” and “Mini-Ballers”.

1. You don’t have a savings account, just a HUGE checking account
2. You make use of private air travel
3. You have outrageously expensive clothes, all of which were given to you for free
4. You’re dating a smoking hot babe
5. You’ve never heard of a mini-baller

1. You choose to live paycheck to paycheck even though you have a six figure salary. You have a 1% money market savings account with a few thousand dollars, meanwhile you overdraft your checking account on a regular basis.
2. You buy your flights on expedia but you don’t like to, you use miles to upgrade to economy plus, you buy vodka tonics on the plane
3. You have outrageously expensive clothes, all of which you paid for and most of which you buy because you saw a mini-baller the previous night who was wearing that outfit and “getting it done”
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.
5. You aren’t dating a smoking hot babe but you want to, so on saturday nights you call your mediocre looking girl friends and ask them to help you get into Marquee hoping you can meet a hot babe there. You look at the liquor list and almost order Absolut, then you remember you’re here to get it done and so you pony up for the Goose. You always hit on the waitress and you always tip her over and above her 20% grat, then usually you go home with one of your mediocre friends. You like it, but you tell other mini-ballers that you regret it.
6. You refer to yourself as a mini-baller, you tell other dudes that you’re a mini-baller and suggest to them they start calling themself a mini-baller too.

As you can see, once you’ve established that you’re a mini-baller it’s important that you make some mini-baller friends. Then if you’re ever hesitating with a big purchase, you can count on one of them to lean over and tell you “dude, it would be so mini-baller if you got that done, chicks love that sh-t, get it done buddy”. And you’re off to the races . . .

Next week: How to Live The Jet Set Lifestyle.

In my unending search to uncover undervalued and badly named stocks I came across: “CAPEX SA” (CAPX.BA). CAPEX is an Argentinian electric utility serving the completely deserted but somehow still under-penetrated Patagonia region of South Ameria. We are initiating coverage of CAPEX with a SELL rating. CAPEX has a strong track record of raising and spending capital but that seems to be where the story ends.

A classic CAPEX investment:

CAPEX’s power plant in Neuquén Argentina; shown here along with the 10 people who actually live in Neuquén Argentina

If investors insist on putting money to work in the “companies named after financial statement line-items” universe, we recommend Revenue AG (which has a compelling top-line growth story) as well as Synergies Inc (which we view as a likely acquisition target).

We also reiterate our underweight rating of Diluted, Shares, & Co. which looks expensive as a result of perpetual equity offerings and excessive option issuance.

In the continuing spat over the investability of Russian equities, I offer the following picture which once again shows that Russian aircraft manufacturers (in this case Ilyushin) and Russian airlines (in this case Vaso Air) have everything under control.

Taken on January 10th, the mere inches of runway left before this plane gets airborne clearly depict two things: 1) Russians are strict stewards of capital only building as much runway as absolutely necessary and 2) Once in place, Russians focus on high asset utilization, using as much of the runway as possible to generate outsized returns.

Recommendation: Long the Russian aviation sector. We believe Russian airlines are likely to use 30% more runway than other carriers, 20% more runway than is legally allowed, and only 1% less runway than is possible. This will lead to profits.

With thanks to enplaned for the pic

Given Long or Short Capital’s international status, we receive a large number of unsolicited resumes. Most of these are of the standard I-work-at-an-ibank-and-hate-my-life-please-hire-me-so-I-don’t-kill-myself variety. However, we are sometimes contacted by extraordinary talent from obscure walks of life. I feel obliged to share some of these fascinating backgrounds. Most recently, we were approached by a former shepherd, interested in making a career change. He accomplished a lot as you can see from a few quotes taken from his CV.

• Personally tended to 300 sheep, including over 35 lambs.
• Shucked over 3,000 bushels of wool and sold 95% of bushels at market.
• Recruited and trained three sheep canines allowing my supervisor to double the number of sheep I was responsible for
• Increased wool yield per sheep threefold by augmenting roughage
  portions in standard sheep diet.
• Created new, multi-colored wool through inventive use of industrial dyes.
• Located and recovered 13 lost lambs without injury or death.
• Tended flock for four years without a single case of mad lamb disease and only one sexual harassment allegation (which was later dropped when the accuser was made into stew. Sheep stew.).
• Doubled revenue per lamb sold at market by implementing an innovative, double-blind dutch auction bidding process.
• Designed propietary DCF models of middle market farms ($15-60mm EBITDA) which drove external acquisition strategies.
• Outlined structure for successful comedic undertaking involving lamb milk, your sister and babaganoush.
• Hobbies include: Mountain climbing, world travel, milking, drinking milk and being milked

Later this month you will get to sample from additional elite applicants to Long or Short Capital, the oldest online financial humor analysis shop.

Well, it’s been a while since I’ve posted and that’s because I’ve been entrenched in some serious due diligence on mankind’s oldest profession: prostitution. While the nationwide debate over legalizing prostitution continues, one thing remains clear, the supply-demand economics around sluts show that the services they offer are priced significantly below fair value. To better understand this mis-pricing let’s analyze supply and demand.

Now, the demand for girls who are willing to have sex with me is infinite and as a result the market is in a state of hopeless under-supply. This should lead to perpetual upward pricing pressure, however, unexplainably, the market rate for a slut’s time is surprisingly low. In fact the price of a slut per hour is actually 30-40% less than the price of a stripper, and there’s no doubt which of the two provides a more complete service.

This unexplainable price structure creates an enormous consumer surplus (email me for graphs), and an obvious pair trade.

Recommendation: I view the price of sluts as unsustainably low and therefore am Long them. Keep in mind that every 1% increase in slut prices is 10% additive to slut earnings. Not wanting to be Naked Long Sluts, I’ve hedged myself with a Short bias on strippers which I think will see immediate price declines as the value propisition of good slut is realized in the market place.

JD has asked me to respond to his claim that Russia is not a good place to invest because they are “jockeying to try and do the only thing they ever try to do: nuke the USA and rule the world.”

Well I disagree.

Thanks for your time.

In the middle of a European trip I have discovered that Germans are trying to take over the world, again. The combination of their industrious efficiency and unquestionable respect for authority caused the first two world wars and it’s only a matter of time before it happens again.

Signs Germans will take over the world:
1. I can choose the exact temperature of the water in my shower here

2. They all open and start their cars with fingerprints instead of keys

3. The most popular station at the spa is the ice cold bath (it’s really f-ckin cold, only people plotting world domination would wait in line to be that cold)

4. The women are slightly attractive, but the whole talking in German thing kind of ruins it, thus the ugliness of the language will prevent the men from becoming distracted.

5. The floor of the mini-fridge is a scale, when I pick up a bottle, the fridge knows how much each product weighs and shows me the price on a screen. If I pick up two items at the same time, it says “Only touch one item at a time”

I would tell you to brush up on your German in preparation for their rise to power, but don’t bother they all already speak English anyway.

Recommendation: Long the German military industrial complex.

Combining the web, real estate speculation and networking effects, the milliondollarhomepage.com is a tribute to abstract brilliance. That is precisely the kind of thinking that leads to oversized wealth or companies built direct marketing and affilliate relationships like Cendant. Creating value from thin air. Awesome.

For people thinking about buying a 10 pixel square for $100, think about 1) the value of an inbound link from a Google Page Rank 7 site and 2) how many clicks over the 5 year holding period which you would need to come out money good. 5 clicks a day for 5 years brings you at capital cost of $0.01 per click.

Recommendation: Long the milliondollarhomepage, buy buy buy

In a throwaway article about drug trafficking (link) on ESPN.com, I noticed something that I found to be amazing.

GBL, or gamma butyrolactone, is sold under the counter at retailers and gyms with claims to build muscle, improve physical performance, enhance sex..

Seems consistent, nothing interesting…but then we continue..

..reduce stress and induce sleep.

These things seems to be in opposition. How can something enhance sex/improve physical performance AND induce sleep? But, wait, there’s more…

When taken orally, GBL is converted to the “date-rape” drug GHB, or gamma hydroxybutyrate.

It’s also a Forget-Me-Now pill! What’s a Forget-Me-Now? According to Gob from Arrested Development:

pills that create a sort of temporary forgettingness. So if somebody finds out how you do a trick, you just give ’em one of these, and they forget the whole thing. It’s a mainstay of the magician’s toolkit, like how clowns always have a rag soaked in ether.

These pills are the right mouse button of pharmaceuticals, capable of anything depending on the context. GBL — the one stop drug for a man who wants to enhance his sexual performance to perform date rape via the “Forget Me” method, and then still be able to sleep anxiety free later on.

Recommendation: Pending FDA approval, which we assume will come any day now for a pharmaceutical product with so many important uses, our massive stockpile of GBH will become liquid gold.

I go out on Saturday night and being that I’m awesome and that my company’s eye insurance lets me buy excessively expensive eyewear, I decide to wear sunglasses to the bar. I’m on the upper east side and there are hot babes everywhere. I’m chatting up one of the hot babes when a meathead from Long Island comes over and taps me on the shoulder. He says to me:
“Hey, only two kinds of people wear sunglasses inside, blind people and assholes.”

So I quip back, “I’ll give you one guess which one I am.”

Then he punched me in the face. Now I have two black eyes and a broken pair of really expensive sunglasses, but boy was I clever. What I learned is that being skinny, clever, good looking and rich is a tough combo in a bar full of meatheads with nothing to lose.

Recommendation: Long me and my sunglasses, short poor people and tough guys.