Burqa (Burka) Arbitrage

by Johnny Debacle

Value. Where is it? It could be in an underinvested collection of brands within Unilever; it could be veiled in a sleepy Government run regional waste operation in Montevideo. But could it be under the draping cover of…a burqa?!?

Fact: Middle Eastern women are hot, I know this because I have never hooked up with them. Scarcity, a valuable asset’s best friend.

Fact: Many hot Middle Eastern birds live their womanhood with their eminent hotness unseen by the entire market.

Fact: Competition breeds improvement and keeps firms (and assets) from getting bloated and inefficient. Burqas serve to reduce competition and endow a visual monopoly to one man. Only one man can view the holiest of holies. This limits the upside that a burqaette can experience by staying fit, looking hot and being aesthetically pleasing. Only one man can give her positive feedback, as opposed to the dozens of men who might check her if they could see all of her on her daily stroll to through the bazaar or to H&M.

Once you put what you want to see under the burqa, what you see under the burqa will not longer be what you want to see. I’m talking orca-sized “no longer what you want to see” based on a complicated visual regression analysis which we performed. Essentially, controlling for variables such as shoe size, wealth, age, the addition of a burqa adds approximately 30% to a women asset’s body weight and reduces beauty by 5 hklums. The end result is that burqas serve to control the property rights to a valuable asset but at the expense of the valuable asset’s value.

Recommendation: There is a potential arbitrage opportunity to acquire a burqa-veiled woman asset, remove the burqa, and flip it for 20% more on the spot. Alternatively, an investor could let the natural elements of competition cause her to firm up her shape while spending some capex on a makeover and then flip the asset for approx an 40-50% after 12-18 months. It’s important to do some upfront due diligience, specifically to verify that the asset has strong underlying fundamentals. Further value can be realized by “blonding” the asset.

Here is a sample of an asset as it was at FYE 12/31/05 and how it looks on a pro forma basis.

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