Ask Julia About Your Length

by Julia Mezzanine Tranche

Julia Mezzanine Tranche is an analyst at Long and Short, the author of Going Private, as well as a member of the Non-Certified Advice Columnists of America, the International Society of Bad Advice Columnists and Chairwoman of the Prestigious European Association for Paperclip Entrepeneurs and Analysts (PEAPEA).

Note: some letters may be “enhanced” for self-glorification.

Dear Julia:

Recently, Long or Short Capital’s Johnny Debacle wrote an [interesting and dynamic piece on Phantom Bonds totally characteristic of the brilliant analysis that typifies Long or Short Capital]. He indicates:

If you have a 20 year plus horizon, then you probably want an allocation that is heavily weighted towards equity, say 90-100%. But you could supplement a 100% equity allocation with an incremental 20-30% of phantom bonds, without disrupting your asset allocation.

As I am 102 years old, my own horizon is somewhat shorter. Can you recommend some Phantom Bond allocations that might be better for my needs?

Signed,
I’m Dreadfully Hearing Impaired in Tiny Ithica, Texas.

Dear IDHITIT:

You are right to notice that Mr. Debacle’s allocation recommendations are not for you. Since you are likely to kick the bucket any day now I have two alternative recommendations for you:

  • Put 100% of your portfolio in Phantom Bonds. It’s true that the commissions will be expensive but your tax burden will be very small (as all the returns on Phantom Bonds are also Phantom Returns) and your estate may well have NOL carry forwards.
  • Put 100% of your portfolio in Google. Admittedly, this lacks diversity but your time horizon is so short that you are CERTAIN to clean up on this trade before we run out of greater fools. Prescott R. Moncrief III over at Goldman is a good sell-side guy to know, I suggest giving him a call.

Dear Julia:

I am an Associate in a large bulge bracket banking firm the logo of which I’m sure you would recognize. I don’t want to name it but it rhymes with “Virgin Snacks.”

Two of the Vice Presidents there ask me out constantly, make lude gestures and spank my bottom when I pass by their desks. One of them asked me to do something called “bobbing the pole under my desk while I’m on a conference call with Spitzer.” I’m not sure what that means exactly (Does it involve wine spritzers? Because, I prefer Smirnoff Ice.) but it sounds like a violation of firm policy. I am at a loss as to how to handle the situation.

Both of them are extremely well regarded in the firm and they bring huge segments of business into their department. They are also both extremely well socially connected in Manhattan. Their offices are a literal revolving door of meetings for a Who’s Who in Finance and Business roster during the afternoon.

I’m sure you can understand my distress at their simultaneous overtures. Obviously, how I deal with the matter could have deleterious effects on my career. Can you help me decide how to handle the situation? I don’t know which one to sleep with first.

Desperately,
Bulgebracket & Tax Girl

Dear B&T Girl

Finance, like life is dependent upon the effective allocation of resources. You need to prioritize and allocate accordingly. I recommend picking the one who lives in the American Gardens Building.

Have issues for Julia? Email your special situations, turnaround questions, advice on unwiding complex positions, insider tips or merger complications to: Dear Julia Drop Box

Full Disclosure: Julia is Short Ann Landers and Long Ann Sather, which may bias her advice.
*Highly attractive portrait above may actually be of (and by) Noli Novak.
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