Long or Short Capital

Or at least short the kids graduating from this school. Their teachers have banned Legos on the grounds that they promote capitalistic behavior. These kids are going to have no clue when they graduate when they have to enter the real world which happens to be mostly capitalistic. And every child economy needs lego exchange, well defined lego property rights and functioning lego markets if it ever hopes to experience sustainable growth.

From the article Why We Banned Legos:

[The children playing with Legos] turned their attention to complex negotiations among themselves about what sorts of structures to build, whether these ought to be primarily privately owned or collectively used, and how “cool pieces” would be distributed and protected. These negotiations gave rise to heated conflict and to insightful conversation. Into their coffee shops and houses, the children were building their assumptions about ownership and the social power it conveys — assumptions that mirrored those of a class-based, capitalist society — a society that we teachers believe to be unjust and oppressive.

Recommendation: Short the Hilltop Children’s Center ETF, in size. For maximum exposure to this trade, travel to Seattle and barter directly with the children. Initial research suggests that 1 snack pack can be turned into 4 Ho-Ho’s and 3 apples can be arbitraged for a bag of Doritos AND 6 gummi worms. Ridiculous.

We are trying to find more quality finance blogs than the ones we have listed under “Best Resources”. Slants can include finance, investing, equity research, market commentary, private equity anonymous sardonic memoiring and any content which resembles the content we link to in “Best Resources”. We are especially interested in fresh site that not many people may be reading but are pretty good. The Epicurean Dealmaker is a good example. We do not care about current traffic, only current quality. Submit links below or by our submittal form or you can email them to misterjuggles@gmail.com.

We have read the Stalwart since they started and they are one of a few goto blogs we depend on to do the voodoo that we do so well. They are now back from an almost six month hiatus and we implore you to resume your reading of The Stalwart, if you had stopped. If it is new, commence your reading immediately. You will not be disappointed.

According to USA Today:

Californians appear willing to pay $4,000 more for used gasoline-electric hybrid vehicles that have state-issued carpool stickers than for hybrids that don’t.

We expect the markets for carpool-lane stickers to evolve, similar to the way the CDO market evolved for mortgages and other types of consumer debt. We see an opportunity for buying sticker-bearing hybrid cars, stripping off the stickers, and reselling both the sticker and the car separately. By selling the stickers to those who most want to avoid traffic — and the hybrid to those with the highest tree-hugging tendencies — one should be able to realize higher pricing versus the bundled buy that exists now.

The mortgage markets provide a clear path for success: hopefully, the collateralized sticker market will grow until it becomes completely out of control, encourages over-leveraged purchases of carpool lane stickers, and leading to a regulatory crackdown that starts an economic recession.

Recommendation: Short Prius cars, Long carpool lane stickers.

I gave money to my alma mater — against my better judgment since this money could have been spent at Marquee instead — and received an emailed thank you note a few days later.

The Annual Fund helped [an] assistant professor of mathematics host a program aimed at eliminating gender inequities in math and science. It helped the studio art department rent a downtown gallery space for student, faculty and visiting artist shows. It helped the women and gender studies department host an essay contest for undergraduate and graduate students. And it helped an associate professor of sociology, organize a conference on memory and trauma. It helped.

So apparently my money went towards helping girls who aren’t good at math, renting a studio in the most expensive part of town so that hippies can paint, and holding an essay contest in the women’s studies dept!?! Since when does it cost money to hold an essay contest!? Incredible. Reading that makes me wish there was a money-back guarantee. I thought the money would go towards scholarships for poor kids or research in the sciences.

Recommendation: Short my university’s fund-raising efforts. Judging by my sample (n=1), 0% of this year’s donors plan to donate again next year.

Taxes are due April 17th. It is April 7th. That gives you 10 days to create an elaborate tax shelter scheme involving Bermuda shell companies or a family of 740 phantom children you could claim as dependents to minimize your tax liability. This is a tight timetable even if you have top tier tax lawyers working around the clock billing you at $1100 a pop, so we recommend you start your taxes immediately.

Remember that if you don’t get your taxes done, you will die alone.

Seen in my hotel elevator today:

In the event that doors do not open, do not be alarmed. Please press the button labeled ‘Alarm’ and speak to the operator

Bill Bishop of Billsdue has a shocking first hand account of wealthy Chinese World of Warcraft players bringing the game to reality by using real people instead of orcs. We always keep an eye on Bill’s posts on online business in China, and this report may be his biggest blockbuster to date, suggesting that “The Most Dangerous Game” forms of entertainment may be making progress on their long path to legal recognition and social acceptance. Our long term stance has been that it is simply immoral to deny the poor the right for me to pay to hunt and kill them for sport.

Disclosure: We hold a substantial position in several shell companies which control Human Hunting and Human to Human Death Combat entertainment operations throughout the third world as well as several privately owned islands.

There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor — the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.
William Bernstein

[hat tip: Infectious Greed]

Past Quotes Entirely Relevant to Investing

Long or Short, mini-ballers, and effective executives all love the phrase “Get It Done.” It conveys the crucial point of business across: results matter, so make things happen now. Naturally, we also love a company that embraces this phrase and philosophy as their number 1 motto. This is taken directly from the Rakuten Group (TSE: 4755) annual report.

Goal of Rakuten Group: To be the No. 1 Internet Service Company
The five concepts of success at Rakuten Group:

• Get Things Done
• Complete Professionalism
• Hypothesize, Execute, Verify and Incorporate
• Maximize Customer Satisfaction
• Speed!! Speed!! Speed!!

Recommendation: Initiate a long position in Rakuten in the expectation that they Get Things Done with Speed!! Speed!! Speed!!

NCsoft management has emphasized that the Garriott brothers do not have plans to further sell down their stake. The company commented that Richard will use the proceeds for space travel. Robert did not state a reason for selling his stake.

Most executives sell stock. When you ask them why they’ve sold, they invariably give a generic answer about diversification, portfolio management, or taxes. These answers don’t usually vary whether the exec is selling 5% or 100% of his stake.

So we congratulate Richard Garriott of NCSoft, a Korean online video game company with operations in the US, for his candor. Richard, also known as “Lord British,” built a famous castle and haunted house named Britannia Manor in Austin. Now he has set his eyes on other pursuits and is not shy about listing them as reasons for his recent stock sales.

Cohort and comrade, Equity Private, has created the 2007 Going Private Awards “intended to recognize the contributions of individuals and organizations to financial and economic ignorance, the elimination of market economies and the destruction of economic efficiency everywhere.” These are the most important awards ever created. LoS readers should submit nominations for the awards below to equityprivate@hushmail.com. The deadline is August 1st, 2007.

The Enron M&A Prize

…Presented to the management team responsible for the merger, acquisition, sale or divestiture causing the most extensive financial damage to equity or bond holders.

The Daniel Loeb “Chief Value Destroyer” Award

…Presented to the senior executive most responsible for the destruction of shareholder value.

The Maxwell Smart Prize for Mediocrity in Financial Journalism

…Presented to the financial journalist issuing the most sweeping generalizations, possessed of the weakest grasp of finance and most the deficient command of economics. (Note: As the prize has already been awarded to Justin Fox of Time, only submissions for “runner up” will be accepted).

The Thai Medal

…Awarded to the individual or organization most responsible for fostering regulatory or legislative initiatives leading to the frustration of efficient markets.

You must have long range goals to keep you from being frustrated by short range failures

-Charles C. Noble

Past Quotes Entirely Relevant to Investing

When an actual, savvy hedge fund like Fortress (NYSE: FIG) goes public, the masses go nutty and bid up the price far beyond its worth. When Kenneth Cole takes his Hedge Fund shoes public, they are shunned and end up on markdown.