Cephalopod Valuation under SAAP

by User Submitted

Submitted by user Bean Counter

Long or Short Capital LLC (LoSC) has consistently maintained a long position in the Cephalopod Index (C.I.). Through anonymous tips and other sources (we believe that they are coming from the recently retained legal counsel of Pleb due to his jealousy in not getting into the C.I. early enough), Bean Counter Associates (BCA) decided to review the valuation of LoSC’s investment in C.I. according to SAAP, which calls for the value to be recorded at Lower of Cost, Market or Whatever We Say (LCMWWS).

During our analysis, we were tempted to recommend a write-down in the valuation of the holdings, just to shake things up a bit and to reflect the now-public knowledge of the squid invasion, which will drive up squid casualties to beer batter and lemon wedges. However, we then discovered that the valuation may be even higher than originally booked, due to a potential jellyfish alliance.

It appears that not only are the squids attacking, but they’ve been able to solicit the help of their fellow aquatic invertebrates in the assault against mankind. This can only bode well for the squid invasion plans as they form a modern-day Axis of Tentacles. Squids will be able to focus their efforts on the Americas, leaving the jellyfish to complete the Asian conquest with only Godzilla standing in their way.

BCA recommends that LoSC book a gain of (perf)*(initial investment) in its C.I. holdings and for all fellow long holders to do the same. This is entirely permissible under SAAP, especially the part where the accountant gets to make extremely subjective valuation calls about things it barely grasps.

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  1. jd
    August 3rd, 2009 | 9:21 am

    this is just a scare tactic.

    while initially the alliance may seem appealing, one has to remember that most jellyfish are passive and lazy.

  2. Nick
    August 3rd, 2009 | 10:04 am

    so what you are saying is that jellyfish are the vanguard’s of the ocean?

  3. jd
    August 3rd, 2009 | 11:44 am

    only if the opposition was heading directly into the current at certain tidal cycles. even in this scenario, they can only be effective as mines.

    the cephalopods know this. the real reason to enter treaty with the jellyfish is to gain open communication with the crabs that ride them.


  4. arbman
    August 3rd, 2009 | 12:19 pm

    So under SAAP, if you bought your Cephalopod index at 6, you have made perf*6 profit, whereas if you paid perf for it, you have made perf^2 as a profit. Since perf>6, you have earned a larger profit on your CEPH position if you have a higher cost base than if you have a lower cost base?

  5. Bean Counter
    August 3rd, 2009 | 4:51 pm

    @jd: Keep in mind that the squids want to dominate the world, which includes domination over the jellyfish. This may be the use of the jellyfish merely as cannon fodder against Godzilla. Communication with the crabs may be another reason for the alliance, we shall have to explore this further.

    @arbman: Your analysis is correct. Isn’t SAAP wonderful?

  6. arbman
    August 3rd, 2009 | 9:35 pm

    Ah, SAAP, still better than GAAP for determining the actual book value of any major financial institution today.

  7. August 3rd, 2009 | 11:02 pm


    I actually prefer the Cricket/Baseball method of financial institution valuation. Rules/methods are pretty simple and intuitive (to anyone who has spent more than a few hours in a pub (which should be anyone attempting to do such things, anyway)).

    1 bourbon, 1 scotch, 1 beer…

  8. HF
    August 6th, 2009 | 5:05 am

    They are attacking!!!

    “Coastguards have issued a warning after a swarm of deadly Portuguese Man O’ War were found washed up on Tregantle beach in Cornwall.”


  9. MR. G
    August 6th, 2009 | 5:53 pm

    Hello Friend. If you would, please tell me who I may contact about getting my company added to this Cephalopod Index. Regards.