Long or Short Capital

I was getting into a cab and I may (or may not) have cut in front of a man who hitching for a ride. He said, and I quote, “You penis.” I was taken aback. I know myself. I am self-aware and I, anonymous other man in the city, I am no penis. I am a dick. So I said, without missing a beat, “I’m not a penis, I’m a dick. Get it straight.” Now put aside questions about how likely it is that my wit is that quick, sharp and nuanced. Focus on my package. Dick vs penis.

To be a “dick” is not always bad. Certain situations call for it. Waiting in lines requires it, whether those lines be traffic, or for takeout or taxis. Getting your best possible deal on a car? Dickhood is a must for the circumspect auto-shopper. Attractive female assets? The dick status is practically a down payment on fantastic strange. Sure, you don’t want your friends or loved one to think you are always a dick, but at the end of the day, a dick is more likely to have a great res at fantastic restaurant with a sexy broad on his arm than a Schmoe.

On the other (left) hand, a “penis” is irredeemably lame, a flaccid creature that brings none of the good qualities of a dick to the table while retaining most of the bad. A penis is immature and ineffectual but nonetheless a douchebag. A dick is aware of what it is, a penis thinks it is a dick and thus is an erroneous prick. “That guy over there with the double popped collars, he is such a penis.”

Recommendation: Long dick, short penis. From an insulting investment perspective, we’d be long “penis” as it should generate higher insult effectiveness returns. As an example, insulting someone with a “penis” can prompt them to onanistically wax for almost 300 words on the internet.

The recovery period for an anal fissure is roughly the same duration as the recovery period for taking the CFA Exam (any level). And I do mean roughly. I expect those of you who took one of the three levels are still relearning what certain sensations feel like. The taste of food, the liquid frothy texture of beer, the loving embrace of a stripper and the sisyphean rock that is your employment (keep pushing, you’re almost there, no really, keep going). These sensations are all new again, and you are well on your way to readjustment into life.

For those 65% of you who failed Level I last weekend, I futurely feel sorry for how much of your life you poured down this horrible Chartered drain. For those 50% of you who failed Level II, I used a time machine to send you well-wishing telegrams exhorting you to “Keep your chin up and next time, don’t be such a tard.” And for those 30-50% of you who neglected to pass Level III, I took a worm hole, dropped into your apartment and left a lifesize model of a failure of the last mile — when your opponent is weak, it’s incumbent upon you to go for the throat. CFAs have to be earnt. Then they have to be acknowledged to have minimal value in the real world and to have been a horrible call on the part of the newly minted CFAer.

Detroit News Editorial on Chrysler case:

Under the government-arranged settlement, Chrysler’s bondholders will receive $2 billion for their $6.9 billion in debt. That amounts to about 29 cents on the dollar. Nine-tenths of the creditors agreed to the deal, although most of them are banks and investment funds that are borrowers from the federal government.

Three Indiana pension funds, whose debt holdings amount to $42 million, contended that as secured lenders they should have received better treatment than such unsecured creditors as the United Auto Workers retiree health care trust fund. The UAW fund will receive 55 percent of the equity in a reorganized Chrysler while Fiat, which put up no money, will receive a 20 percent share as well as effective control of a new Fiat-Chrysler alliance.

Legal commentators have said the union received a better deal than is usual in a bankruptcy.

…

[The] decision on whether to accept the deal should have rested with the bondholders — not presented as a government ultimatum. Protecting the interests of secured creditors is the point of bankruptcy law

Au contraire! That WAS the point of bankruptcy law. Did you get that memo? Now bankruptcy is a place where secured creditors get screwed for political purposes and unsecured claims walk away with the keys to the company, while people ahead of them in line get a quarter for bothering to front the company money when it was needed most. In this case, the unsecured claims forced the filing by being so onerous and non-market, not unlike the market participants who took the most housing risk from 2004-2007, caused the US to file for bankruptcy protection (coming to a theater near you in 2021) and now are looking for handouts, so they can throw other people’s good money after their own bad. While it may be poetic that the UAW will own this slop of shit that makes cars that no one wants to buy, it’s also not fair.

What does this mean? I urge you to consider never lending any secured money to a troubled company, especially one in a political industry that employs a lot of people. It doesn’t matter what kind of collateral you have, or what kind of lien, or whether it’s Debtor-of-Possession or super ultra 1st priority magic loans, you’re risking your patient’s life investors’ money.

Recommendation: Short secured, long unsecured politically supported claims. Short existing bankruptcy law.

People care what I think. I have a prestigious blog, sir!
-Roman DeBeers on Party Down

Past Quotes Entirely Relevant to Investing

An email sent to JD on Monday

from:Hopman, Bret < [redacted]@condenast.com>
to: “Hopman, Bret” < [redacted]@condenast.com>

subject: Details Magazine

Good afternoon,
In the upcoming June-July issue of DETAILS (on newsstands Tuesday, June 2), we have a piece that looks at [something probably boring and that won’t be talked about on your site because there is a much better subject for your site].
Here’s the link to the story: [Redacted].
If you are interested in running something online, please be sure to show the cover (attached).

Please let me know if you have any questions or need anything else.

Thanks for your consideration!
Bret

My reply:

Bret Hopman,

I am confused. Is this a request that we run something online about it? Or are you giving us permission (thanks!)?

I’ll give you an idea of how we do things on the internet. You post something in your men’s magazine, I may or (more likely) may not give a shit enough to read it. If I were to give a shit enough to read it, and I was able to find some means of reading it, at that point I may or (more likely) may not give a shit enough to write anything about it on the internet’s most prominent satirical investment site. If, by some minor miracle, like the one that allows that oragutan in Australia to paint beautiful art or the one that allows people like you to navigate the internet and breath through your mouth at the same time, I chose to write anything about it on the internet’s most prominent satirical investment site, I would NOT in any way ask you how I should write about it nor would I care what your opinion was on the subject of whether or not to include the cover in the post. Bret Hopman of men’s magazine Details, get over yourself.

Sinceringly,
Mr. Juggles
longorshortcapital.com

Submitted by user The Paleofish

Conventional wisdom has held that the transportation of narcotics requires a suitcase for the purposes of concealment and convenience of carriage. Today we learn that Chilean innovators have thrown convention out the window and created suitcases made entirely of cocaine. Moviegoers and cocaine enthusiasts know that this was basically the plot of Traffic (spoiler alert!).

The benefits of this innovation will trickle down to all of us in myriad ways. Cocaine prices should drop as cocaine trafficking efficiency increases. Instead of carrying merely the cocaine they could fit into a suitcase, they carry that much PLUS the suitcase itself all in one trip! And for vacationing miniballers who agonize over the decision of “clothes or cocaine” when packing for their destination of chioce, they can just bring both in their cocaine case with the addeded benefit of being safe from Johnny law.

I know I’ll sleep easier tonight. What’s next, making people out of cocaine?

Recommendation: Long Chilean cocaine producers; short Bolivia and Bolivian pride; long chile (because it’s delicious).

When an observer with a trained eye looks at Exxon Mobil’s (NYSE: XOM) 3 month stock price chart, an interesting picture presents itself.

For those of you who do not have a CTA, you’d look at that and see a normal chart, nothing that screams “Trade Me.” But for those of us who are more gifted in the technical arts, we hear voices screaming in our heads saying “Buy Buy Buy” in the days surrounding April 20th. That’s because during that span of time XOM was trading within the “neck” range of a text book Bactrian Double Hump & Pump formation. Let me tease it out for you.

As you can see, the chart is clearly showing a picture of a two hump camel. And if you know anything about two hump camels, you know that when you are traveling from butt to head, after you clear the second hump their neck declines precipitously before a rapid ascent. If you can buy a stock in that desirable neck range, you are likely to experience a short term pop. This is a historically* proven tradeable phenomenon. Here is an overlay of an actual two hump camel:

Aside from the neck, after you plateau in the head range you enter an uncharted area. The stock price becomes dependent upon whether the man holding the reins of the camel decides to jump or not, something that is unknowable to even the most gifted technical analyst.

*Definition of “history” employed in this context is not universally accepted, but is permissable under SAAP

A contact named “Lilley” sent me an email with the subject title “Zoo auctions piantings by orangutan”. She had me at “orangutan,” I didn’t even have to open up the attachment called “fluoresent.rtf” that was appended to the textless message to know that I am very long all zoo auction piantings by orangutan. To show that this is a real investable trend, here is an article about orangutan art fetching as much as £14k.

After his death Nonja inherited his paints and carried on the good work, in spite of a boyfriend called Vladimir who eats her artwork if not locked away in his cage.

Keepers believe Vladimir, who tried painting himself but kept making holes on the canvas, is jealous of his girlfriend’s success.

Recommendation: This is not just chatter, but likely insider info, so be careful how you use it. “zoo auction piantings by orangutan” are likely to go way up, sky is the limit for all simian art. Hold’em if you got em, buy’em if you don’t.

We previously published a brief for investors on How to Hold Based on Insider Information that resulted in a lot of our readership profitting substantially. But correspondence we have received from some readers in jail indicates that some investors are unclear on a second important part about insider trading, the often neglected “getting away with it” part of the buy, sell or hold.

1. Have a position in a company which issues tradeable public securities (stocks, options, bonds, etc).
2. Obtain material non-public information from insiders of this same company.
3. Buy, sell, do not buy or do not sell any of this company’s tradeable public securities.
4. Send a letter to the SEC detailing at length the ways in which you are using material non-public inforomation to profit. The at length part is crucial so pretend like you are writing a doctortal thesis that you have to defend against people who will never read it because it was too long and too boring.
5. Profit.

Note: You might recognize Step 4 from How to Commit Financial Fraud and Get Away With It

Many young men and a few young women decide to apply themselves legally by obtaining their Juris Doctor, or as I call myself, JD. But the uptake of this path is generally based on flawed analysis that doesn’t properly align their objectives with their designation investment.

Most men seek the JD to “make a lot of money” which is really just a euphimism for “power over women.” This means you sign up for four years of college and four years of college debt, maybe a few years break doing something like teaching or navel gazing in Tahiti or some shit while you polish your LSATs, then three years of law school with its accompanying three years of law school debt. At that point you have a full on JD appended to your existence, and henceforth get to spend a lot of time to make a lot of money doing something you might not hate but probably will.

Over the entire course of this process the person who sought the opposite designation, the DJ, will be pulling more strange each night than the JD will in his entire life, all with a designation he obtained at no cost.

DJ is the actual opposite of a JD as not only are its letters the reverse of JD but it goes before someone’s name not after. It comes at virtually no cost, requires almost no talent or taste, and lends itself to sleeping in and having anonymous sex with women who not only are not wearing sweaters but likely do not even own sweaters. By sourcing the “power over women” directly the DJ obviates the need for the “make a lot of money” middleman. Plus the soundtrack of their life is actually the soundtrack of their life. They lived a scored existence.

Recommendation: The fact that so many men continue to shackle themselves to the JD and ignore the DJ is a market inefficiency that will overtime converge. We would change our stance were there to be signs that JD:DJ parity was closer to occurring, such signs being the emergence of three year DJ Schools, an increase in the amount of visible giant headphones, and an uptick in the cases of gonorrhea. For now long me, DJ JD, as I have it coming and going.

Veridian Dynamics. Every day something we make, makes your life better. Power, we make that. Technology, we make that. Cows. Well, no, we don’t make cows. Although we have made a sheep. And medicines. And airplane engines. And whatever this is. And all sorts of things. Veridian Dynamics. Every day something we make, makes your life better. Usually. Veridian. Life. Better.
-A commercial for Veridian Dynamics from Better Off Ted

Past Quotes Entirely Relevant to Investing

From Bloomberg, Treasuries Fall on Concern Record Sales Will Overwhelm Demand:

Treasuries fell for a fourth day, pushing the difference in yields between two- and 10-year debt to a record amid concern record supply will overwhelm investor demand as the economy begins to show signs of stability.

…

“We are in a bit of a freefall,” said Kevin Giddis, head of fixed-income sales, trading and research at the brokerage Morgan Keegan Inc. in Memphis, Tennessee.

…

The decline pushed 10-year note yields to a record 2.75 percentage points more than two-year securities, surpassing the record of 2.74 percentage points set in August 2003.

The yield on the 10-year note rose 18 basis points, or 0.18 percentage point, to 3.732 percent at 4:19 p.m. in New York, according to data compiled by BGCantor Market Data. That’s the highest since Nov. 17.

Apparently, there is a finite limit to increasing the supply of something such that it will begin to become less dear. Some refer to this reversionary force as part of the unproven theory “supply and demand” wherein the basic concept is that if there is demand X for some thing T-Bill and there is supply Y then there will be price Z. If Y is decreased, then a new equilibrium price will be attained that will be higher than Z. If Y is increased, then a new equilibrium price will be attained that is lower than Z. Except for Giffen goods, never forget about Giffen goods.

Some people, and most politicians, insist that such forces and theories are not only unproven but are unlikely to exist. If they were to allow that “supply and demand” may exist, they would stress that it’s important that we do what we can to obviate our need for such burdensome natural laws. Is that not the mission statement of Government? To not only protect people from nature, from other people and more and more from themselves, but also eventually from gravity and its ilk? Progress.

Recommendation: We’re not sure but we don’t think the lowest Treasury yields in American history are sustainable forever, and that pushing them down now comes at a cost later. Long gravity, short magic.

[Where the Guide] is inaccurate it is at least definitively inaccucrate. In cases of major discrepancy it’s always reality that’s got it wrong. This was the gist of the notice. It said, “The Guide is definitive. Reality is frequently innacurate.”
–The Restaurant at the End of the Universe by Douglas Adams

Past Quotes Entirely Relevant to Investing

Are you guys just going out quietly?

No final email, no guns ablazing?

It’s been over about ten days now…

A certain Orioles prospect with a broken arm left this in our comments yesterday. Just to dispel any rumors, no no and no. You will believe me more when you see the investigative piece we have been doing, althought you won’t believe that grown adults spent the time to write it, much less to think it, even much less to share it with investors, and least of all to make enormous profits by unethically front-running it. We would never leave without shorting ourselves, which we may have done for 10 days, and we may have recently covered. This was a very profitable trade we have no idea why you didn’t make it.

No, what happened, and we knew this would happen at some point it’s natural, was what you see in those cialis ads. You know, Dick (LoS) has a problem getting it it up (posts) and keeping up with his much younger wife (our mistresses), but now Dick has all the energy in the world thanks to this pill (cocaine and mango juice). We have every intention to continue to erect our body of content, so don’t worry.

Recommendation: Short Matt Albers, our own personal Roubini.