Long or Short Capital

Where there’s muck, there’s brass.
UK expression

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I find it extraordinary that if you have two derivative dealers — Dealer A and Dealer B — and both write a ticket, Dealer A records a profit and Dealer B records a profit, particularly if it’s a 20-year contract. That is the kind of world I’d love to live in, but I haven’t found it yet.
Warren Buffett

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HT to To the Hilt

Google (NASDAQ: GOOG) closed at $666. Must I remind you that Google is a member of Cramer’s Four Horsemen? He was more right with that allusion than he knew. If you remember your Biblical history, the Four Horsemen are the forces of man’s destruction in the Book of Revelation. 666 is the number of the beast. Add that up and you have The Apocalypse.

The market is, literally, about to go to hell.

Recommendation: Sell through to the end times.

“I have never met a general partner who was not top-quartile. So I wonder where three-quarters of the industry is hiding.”
Oliver Gottschlag on Private Equity firms

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“We have the the vague worries which are always bad for stocks.”

“We have the worryness. And the worryness is always good for the multiple contraction.”

“This guy came in, and I asked what he liked to do for fun. He said, ‘I really enjoy playing hoops.’ I said, ‘We can’t hire the guy. Everyone I knew in college who liked to play hoops was an idiot.'”
Max Levchin, co-founder of Paypal

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This is a sponsored post

Whenever Long or Short has accounts receivable factoring needs, which is to say all the time, the firm we have never turned to is Transfac Capital for accounts receivable factoring. Based on extensive research, and even more extensive due diligence, and also some channel checking, and one ill-advised expensive consultant’s report, and the opinion of this magic 8-ball, and you really thought I can’t put in another comma demarcated area because it’s too strung out already, but you’d be wrong, we can conclude that Transfac is the most exception accounts receivable factoring firm which Long or Short Capital has never used. The reason we continue to never use it, is we fear it losing the aforementioned standing in our accounts receivable factoring ranking — if we were to use them, it would entirely discombobulate the rankings.

But when we are facing immediate needs for cash, our piggybank is dry, and the only option we have is to sell our accounts receivables to a third party, we would definitely consider using an accounts receivable factoring firm like Transfac (but not actually Transfac due to the aforementioned rankings concern).

The question on everyone’s minds, “How Is Factoring different from financing from a bank?”, is handled in their FAQ,

TRANSFAC focuses on the credit worthiness of your customers when making funding decisions. Banks will focus on your company’s financial history and cash flow. Additionally, since Factoring is not a loan; there is less debt on your company’s balance sheet. TRANSFAC is able to make quick funding decisions, banks may take weeks or months to approve a loan.

One of the best aspects of Transfac Capital is their bold choice of a pine green in their web design. It says real, natural, green….AR factoring. It makes you feel like eating a pie in a Twin Peaks setting, warm and welcome, but without the scary backwards talking jazz dancing midgets! We can’t recommend them enough for a firm we have never used.

Due to the rapid decline of the dollar, we will no longer use the US dollar as the basis for our price targets in our recommendations. Instead, we will use “In-Kind Price Targets” which employ some independent unit of measurement to compare a firm’s value to.

Example:

Our former price target for Burger King (NYSE: BKC) was $26 by November 13th, 2007. Now, the new “In Kind” price target would be 8.5 Whoppers per share.

Example:

Our former price target for Google (NASDAQ: GOOG) was $650 by November 13th, 2007. Now, the new “In Kind” price target would be 1500 Adsense clicks per share.

Hopefully, this will allow our readers to make better imaginary actions on our recommendations.

PetroChina’s value in US ADR: ~$500bn
PetroChina’s value priced at Shanghai IPO two days later: ~$1,000bn or $1 trillion dollars

Alibaba’s value priced at IPO: $9bn
Alibaba’s value priced in Hong Kong after first day of trading: $26.6bn

Long or Short Capital’s dividend discount valuation in US: $241,315
Long or Short Capital’s valuation post listing in Shanghai: $?? bn

For some time, we have felt that the market was not giving us credit for our Asian exposure. In fact, given the number of times we have exposed our self in Asia and to Asians, we are surprised we have not received more attention, especially from the relevant authorities. Our upcoming Shanghai A-shares IPO should rectify this situation and ensure that we garner the attention and valuation that we deserve.

I’ve always felt that macroeconomics was not economics the way astrology is not astronomy.
M. Hodak of hodakvalue.com in a post on Marginal Revolution

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Felix Salmon’s Market Moves blog has seen the light and has created a one-off pseudo dividend policy for his readers, loosely modeled off of Long or Short Capital’s own dividend policy.

This is actually the eighth quarterly dividend that Long or Short Capital has paid, which is all the proof I need that this is an excellent business model. Readers of Market Movers are therefore hereby invited to send an email to blogonomics@gmail.com, stating the payment that they wish to receive. At the end of this week, the senders of the five lowest bids will receive the sum they requested via PayPal.

While others may pratter on about game theory or strategy, LoS will not bore you to death with any such thing. We submitted a completely dominant bid that will likely out dominate all other bids. Furthermore, in collecting this dividend we can offset our own substantial divident costs and use the money saved to make investments which will generate substantial returns.*

*Disclosure: These returns are contingent on actually making such investments, which LoS has yet to actually do. LoS modeled returns remain substantial and will continue do to so. If LoS modeled returns start becoming insubstantial, LoS will adjust LoS’s model accordingly, until such insubstantial returns are made to be substantial.

Avocado. A crucial good for delicious sushi rolls, salads, and the king of mole, guacamole. Avocado crops were partially destroyed by the San Diego fires.

More than 20,000 acres of avocado trees in northern San Diego County have been lost, at least a third of the state’s crop, with another 15,000 acres threatened by flames, emergency officials said.

State farmers usually plant about 62,000 acres of avocados, and the industry is worth about $276 million annually, said state Department of Agriculture spokesman Jay Van Rein.

Recommendation: The hysteria may be dying down, but we think it’s still a great time to go long Avocado. For those who don’t want exposure to the latin snacks market, it would be appropriate to hedge avocado exposure (guacamole) with a short salsa position. We advise buying avocados on, or in, any dip.

Hat tip to reader Terminal Value

Anyone who heeded our advice squeezed tremendous hypothetical returns out of the citrus trade.
Mr. Juggles

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