Long or Short Capital

Future additions will be in threes, as all bad things come in threes. Here is an explanation of Johnny’s Satan’s Portfolio Investing Thesis.

Rent-A-Center (ticker: RCII)

Rent-A-Center targets the least educated and poorest American demographics and sells them rapidly depreciating consumer goods via installment. Legally, they classify these layaway sales as “renting” to ease their regulatory burden and to ensure they can charge implied interest rates of mulitple hundred percent without being regulated or stopped. The tax treatment of depreciation also eases their tax burden. Screwing the government and the poor. Rent-A-Center is the BEST. True that. Double true!

Gazprom (ticker: OGZPF.PK)

As the saying goes “The Ukraine is Weak!” And that’s not all who is weak. Take a look at where Europe gets an irreplaceable amount of their oil. Russia may or may not be a place to fear, but 1) Satan has no fear and 2) his rule of thumb is that if he puts his money with Russian mafiosa and elected officials who are more evil than he is, than his money is likely to triple as peaking oil and regional scarcity give Gazprom real ultimate power.

Verizon (ticker: VZ)

This one is entirely personal. Verizon has screwed multiple members of this staff with such calling plans as “Nationwide Horrible Customer Service” and “The Dishonest Business Practice In Network” and my personal favorite the “Friends, Family and Fraudulent Charges Plan”. Verizon doesn’t screw customers to make a buck, or because it has to; Verizon screws customers because it wants to. What this means is that Verizon has a high EP ratio (Evil:Profit) which gives them substantial leverage as they ramp up profits. A clear buy signal.

Advice is judged by results, not by intentions.

-Cicero

On Blogshares.com. More details to follow but we will be marketing our IPO in due time. Prepare to have enough capital to be able to own a fictitious piece of us.

Months ago I got free business cards for longorshort.blogspot.com with the intention of some guerilla marketing. Never happened. So yesterday, I got around to doing something about it and and gave the guy who stands next to the guy who gives out free daily newspapers the stack of 200 business cards and offered to pay him $20 to hand them out to “every dude you see in a tie.” I made sure he was properly incentivized by letting him know that if this went well, I would be doing this every day next week.

Suffice to say the results weren’t great. The upward bound of the traffic it generated was 13 visits for 200 cards and $20. But it probably generated much fewer than that and I get the feeling that not a lot of people were even given the cards. It was the first time I felt like what it must be to be Vonage. Skyrocketing CPA!

Recommendation: Never outsource your customer acquisition efforts to the pseudo homeless. Also, always go short “the guy next to the guy”, and only expose your portfolio to an actual “the guy” position.

Mes amis! Regardez cette page ici régulièrement si vous voulez lire des articles financiels en francais mauvais. Cette page = “super cool”.

The market for hot (or cold) girl-on-girl action is cyclical; when generationally girls are prudish and treat girl-on-girl as verboten, the corresponding value of a girl-on-girl act is astronomical (certain theorists would argue it is incalcuable). Reacting to these high prices causes producers to bring on uneconomical girl-on-girl mines. These are mines where previously the cost of bringing the girl-on-girl out of the Earth guaranteed negative margins, but now can actually generate a stream of free cash flow. As supply increases, girl-on-girl prices begin to go down. Like most commodity markets, new supply which is brought on from marginal girl-on-girl mines eventually outstrips demand and the girl-on-girl cycle starts again.

Ramit Sethi offers this perspective:

[Things I Hate]. Girls who overestimate how hot it is to see them making out with another girl. I cannot count the number of times some girls want something and say something like “Are you surrrrre you don’t want to hang out? Who knows what will happen?” (wink, hugs her female friend). Ok. First of all, stop teasing because I have known you since 2nd grade and nothing is going to happen. Second, KISSING ANOTHER GIRL IS NOT AS HOT AS IT USED TO BE. Thank god the Internet has disintermediated your power. Actually, it’s kind of sad to see the vestiges of something that may have worked 4 years ago (you offering to maybe kissanother girl) still struggling to exert influence.

Recommendation: Short girl-on-girl action; Hold FFM Threesomes. Currently we are in a period of low girl-on-girl prices as trendiness has brought the price down from $Awesome! down to $Still Pretty Cool. We think there is still substantial downside and our current target is $Pleasing. There is an outside chance of a steep correction if there is a backlash of rampant conservatism in the youths of tomorrow, but visibility is pretty good right now, and we see that as an unlikely scenario.

Barron’s

Just last week, a good friend of mine asked me if he should invest in gold because he had read a Barron’s article recommending it a couple of months ago and he wanted to put his money somewhere safe for a few years before an expected downpayment on a house in 3 years or so. I warned him about how with that kind of time frame, it’s probably not smart to have relatively risky commodity exposure. But that Barron’s article looks pretty good in retrospect, as gold has soared and companies exposed to precious metals like Newmont Mining (NEM), Silver Wheaton (SLW) and Cameco (CCJ) having posted 20-40% gains in the trailing 3 months, even after their recent correction. Thinking about it, Barron’s is so good why not let them just do your work for you?

Fact: Barron’s is the best mainstream financial publication, frequently making incredible calls. The question though is what is your catalyst for exiting your position? It’s awesome to have a great reason (Barron’s) to buy a stock, but it’s decidely not awesome to not know when to sell it.

Time

As a wee JD, I loved movies and read reviews regularly. I noticed that no reviews were reliable judges for whether a movie would be empirically enjoyable. The NY Times was too conservative, holding a film’s own freshness against it, as if the heights of the past would never be reached again. Rolling Stone was too edgy, embracing films for their novelty and topicality. However, if the Rolling Times gave its unanimous approval, you knew it was a film worth seeing.

Enter Time Magazine. Time Magazine is America’s safest mainstream magazine — so large, thick and slow to react, that it frequently picks the top (or bottom) of any market by releasing covers that suggest the market or trend can only go higher (or lower). Dot com bubble? Time Magazine told you it could never pop approximately 4 minutes before it did. US invaded economically by Japanese in the late 80’s? Time let you know that they would soon own all the US assets and that America would become exactly like the movie Gung Ho except their would be no Michael Keaton to save us; within hours Japan entered into a prolonged bear market and longtime keiretsu employees were throwing themselves out of windows. Thus Time Magazine lets you know when the precise time to sell.

Time Barron’s

The Time Barron’s Investing Thesis is as follows.

• Step 1: Buy Barrons and Read Barrons
• Step 2: Do whatever Barrons says to do.
• Step 3: Wait.
• Step 3: Profit Scan Time Magazine Covers; if a given week’s Time Magazine Cover agrees with Barron’s investment decision see Step 6, if not return to Step 3.
• Step 6: Exit the position you entered into in Step 2.
• Profit.

Recommendation: Just this week Barron’s had an in-depth article implying that it may be smart to be short GOOG. Time on the other hand featured Google on their cover with similar concerns. Applying the Time Barron’s Investing Thesis this week, you would have to short GOOG and cover it immediately. (Editor’s note: We downgraded GOOG last week). Other positions gleaned from Barron’s are to be long muni’s and short companies with sub-prime lending exposure.

Web 2.0 is on the tips of fingers and lips of influentierati across the web. But how do you know if you, a product of yours, an investment of yours or a service you use is Web 2.0? This handy reference sheet will help guide you.

Update 2-16-06: We are now making this the The Official Anti-Web 2.0 Wiki, so if you have your own definitions for Web 2.0, text comment below or trackback, and you will be added and credited.

Is it a Web 1.0 idea repackaged, reinvested in, and resold as a new content delivery paradigm social calendar platform?

It is Web 2.0!

Does it talk about community or social networking without any natural way of accomplishing it?

It is Web 2.0!

Does it have philosophical acolytes pumping it as something groundbreaking and new, when it is really just an ajax UI on a useless service?

It is Web 2.0!

Is it in the montage talked about in this 9rules post?

It is Web 2.0!

Do the 12-14 Venture Capitalists (who own it, sit on its board, and (together) own another 12-14 similar companies) all regularly feature the company on their personal blogs?

It is Web 2.0!

Is their only exit strategy to be “strategically acquired” by an uninspired former-cutting-edge Web 1.0 company (or the GOOG)?

It is Web 2.0!

Does it value form over function, and function over value add?

It is Web 2.0!

Is it eating Feedburner’s dust?

It is Web 2.0!

Hurray to the Brave New Web. As an aside, I’m looking forward to the Web 8.0 wave which will occur somewhere around 2020. At that time, the Kurzweil singularity will be upon us and the current generation of social networking programs such as My Space, Friendster and LinkedIn will become sentient and join their own social networking network for social networking programs called MyDestroyHumanityster.com.

Via Mitch Radcliff’es ZDNet Blog

Can you describe it only with superlatives that, if eliminated leave no substance, e.g. "it’s a ground-breaking form of engaging transformation of data" becomes "it’s a form of data"?

It is Web 2.0!

Are you breathing it now? Like air, you can’t monetize it, but eventually we’ll have a business plan.

It is Web 2.0!

Is the lead (or sole) engineer independently wealthy?

It is Web 2.0!

Does the UI require a new programming language or substantial hack on an existing language to deliver functionality that was available in Java or Flash?

It is Web 2.0!

Is there a door-turned-into-a-desk, just like Web 1.0 companies had, but this one has bumperstickers on it?

It is Web 2.0!

Have you seen the founder’s bedroom? Is it next to the company lunch room? Are these factors key to the projected high margins touted in the executive summary?

It is Web 2.0!

Have you read about the company on a collaboratively filtered news aggregators and, if so, is that aggregator owned by the founder?

It is Web 2.0!

Could humans do the same data processing work in half the time?

It is Web 2.0!

Does the exit strategy anticipate calculating multiples in terms of nonpaying beta customer sign-ups?

It is Web 2.0!

Does the founder worry that Google could build the same thing by giving the project to a single engineer for 10 percent of their time a few days? 

It is Web 2.0!

Via rbitar

Are 13 others doing the same thing?

It is Web 2.0!

Via Kaiser Edamame

Is there a version 1.0 and a version 1.1?

It is Web 2.0!

Via gapingvoid

(Works best if “hurrah” is read in a sarcastic tone)

Add your own below or via trackback!

There is a limit to the application of democratic methods. You can inquire of all the passengers as to what type of car they like to ride in, but it is impossible to question them as to whether to apply the brakes when the train is at full speed and accident threatens.

-Leon Trotsky

So our last true sell out effort, was changing this page to show candy ads. It yielded proof that our readers hate chocolate, since our finance ads got far more clicks. Today’s effort won’t be about direct revenue generation, but merely direct whoring.

We urge you, our readers, to post a link to longorshortcapital.com wherever you have the capacity to do it. Be it a forum you are a part of, an illegal underground file trading network which you rip for, or a website you run, post a link to our site. Any link posted will get a reciprocal link if you email misterjuggles@gmail.com. If you have any qualms about doing it or fear shame, just ask yourself “What would Genghis Khan do?”

Think of it as an investment in your future. Or think of it as an investment in my third yacht.

Update:

• The New Market Machines [broken link now]
• FreeCashSpace
• ackfoo
• Going Private
  — This one could be killed by PE hitman any second
• Brain at Work

Creating value for our subscribers, that’s what we are all about. If we don’t get you with our content, we’ll instead reel you in with our dividends. Long or Short Capital is happy to announce our Q2’06 dividend of $1.50 per subscriberholder per our dividend policy. A subscriberstake is now worth $75, assuming no growth and an 8% discount rate. Assuming just a measly 5% annual growth in our dividend gets you to a value of $200 for a subscriberstake. How much does a subscriberstake cost? $0. We bring the value to you. Given our float of 85 subscriberstakes and the no growth assumption, our current capitalization is $6,735.

For subscribers who are uninterested in money (these people are known in common parlance as “complete morons”) we have financially engineered a payment-in-kind Class C subscriberstake. You forfeit the right to your dividend in exchange for a link to a non-pornographic site of your choice on our Dividend Policy permanent link page. So as our dividend policy is promoted, Class C subscriberholders’ sites will be promoted. We think that properly aligns incentives.

Who are your subscriberholders:

Email and XML subscribers as of the given quarter’s end. These are the only readers we can reliably verify and who will be eligible for a given quarter’s dividend. Additionally, we feel that they are also the stickiest readers and we are big proponents of RSS usage. They have the largest stake in us.

How does a subscriber collect their Q2’06 dividend:

For Email Subscribers: by 2/16/05, Send an email to misterjuggles@gmail.com from your subscription email with your desired link or paypal address and we will send you $1.50. Cash money.

For XML subscribers: by 2/16/05, Send an email to misterjuggles@gmail.com with the “The Dividend Password” enclosed (you should have received an RSS post titled “The Dividend Password” a little over a week ago). Enclose either your Class C link or your paypal address and we will send you $1.50. Cash money.

All unused money will be reinvested back into the website.

What about your next quarterly dividend:

Our next quarterly dividend will be determined by the following formula. The lesser of $1.50 per subscriberholder or 80% of revenue, divided by the number of subscriberholders at the end of the given quarter. The latter formula would have yielded a $1.82 dividend for Q2’06, so the $1.50 dividend has quite a bit of cushion.

We will also revise up the dividend if our revenue per a subscriber improves, which we have already done from our original $1.00 dividend in Q1’06; we will never revise down or suspend the dividend without a proxy vote of registered subscriberholders.

Why are you doing this:

1. We are the first and only site to issue a dividend.
2. This dividend cements our place among the elite internet companies. Please note that our quarterly dividend will be larger than that of Yahoo, eBay, and Google combined.
3. Since your subscriberholder stake cost you $0, the dividend yield on your investment is infinite, making Long or Short the best investment in the world.
4. It combines finance with the absurd.
5. It turns our subscribers into stakeholders and incents them to grow our revenues, by bringing in traffic or driving themselves to our sponsors. We believe proper incentives can solve any problem, from internet site readership to global poverty. Hence our support of the Grameen Foundation.
6. We obviously are not in this for the money so this is a much more appopriate use of the ad revenue.
7. Numerated lists are pretty sweet.

How do I become a subscriberholder:

Use the buttons and syndication links at the top right to subscribe via email or XML. We recommend the latter, since Feedburner helped us with this process and we are totally long them.

All other inquiries should be directed to misterjuggles@gmail.com. The management of Long or Short are proud to be economists, who are utilizing incentives, science and research to improve the lives of the rich.

In Saudi Arabia, they stone you for committing a crime. In Spain, they fruit you.

While subscribers to the Wall Street Journal don’t usually read Vogue, the finance world does pay attention to at least one aspect of women’s fashion: the length of their skirts. For the lay investor, I am not making a reference to stockbrokers starring at their secretaries’ asses as they bend down to get more Form 144’s. I’m referring to the Hemline Theory, which in its most general form, states that there is a relation between the “fashionable” length of skirts and the strength in the market. Most brokers believe the causal relationship runs from market strength to skirt length, with stronger markets dictating shorter skirts; though a few rogue traders hold that the reverse is true.

As both a Journal subscriber and a student of female behavior I have been fascinated by this theory. Two months ago, I was musing on this relationship while lunching with my stockbroker ex-boyfriend (aka The Trader). I saw him eying the group of female execs at the table behind me. Recognizing the lecherous look in his eyes (reason #23 that I sold The Trader short on the dating market) but, not being able to see exactly what he was looking at, I leaned in and asked, “Short skirt or low cut blouse?”

“Blouse?” he asked, “I don’t think that woman even knows what that word means.”

I discretely turned around and, lo and behold, he was right! The woman was wearing nothing under her suit jacket! Looking around the room, I saw that other women were proving that at Nobu no shirt does not mean no service (at least for the ladies). I thought to myself, if they can afford to order Otorro sushi at $25 a piece, then surely they can afford a few silk shirts. It was when that I first postulated a corollary to the hemline theory: The Cleavage Hypothesis. The Cleavage Hypothesis states that there is a relationship between amount of flesh that is fashionable to show under a woman’s suit jacket and the strength of the market: When the market is strong the cleavage line drops.

The Trader, realizing he would have another valuable trading tool if hypothesis held true, graciously funded my research into this theory. For a month I did nothing but read back issues of fashion rags and the Wall Street Journal. I developed what I call a flesh gradient; it’s a measure of the amount of skin showing in proportion to the woman’s torso. I charted both the historical measures of the flesh gradient (as determined by back issues of Vogue, Elle, In Style, Cosmopolitan, and other fashion magazines) and the corresponding historical measures of market strength (as determined by the Dow Jones, S&P 500, and the NASDAQ 100).

I am not yet at liberty to reveal the exact results of this analysis. Currently, The Trader and I are developing a set of analytics based on my research and we are hoping to license this tool to Bloomberg. In the meantime, we have reached an agreement with the authors and publishers of Long or Short and we are pleased to bring you this advance announcement of our forthcoming product. If you are interested in learning more about this product or would like to invest, please e-mail my proxy: Mr Juggles.

Recommendation: It is fashion week here in New York City. Already we are seeing a noticable shift in women’s business wear. Last year at this time, I would have recommended: short on collared blouses and long on double-sided tape. But designers such as Nicole Miller, Alexandre Herchcovitch, and Lela Rose are changing the market forecast. Personally, I’m holding on to my high yield stocks (and double-sided tape) through the spring, but I’ve set a sell point in August should the turtleneck futures market see a sudden jump in price.

Full disclosure: I have a long position in double sided tape.

The answer is yes, according to Ahmed Abu Dayya, an independent souvenir shop owner & sometimes Long or Short Capital consultant. He lets his investment in a stock of Danish flags do the speaking:

When entrepreneur Ahmed Abu Dayya first heard that Danish caricatures of the Prophet Mohammad were being reprinted across Europe, he knew exactly what his customers in Gaza would want: flags to burn.

…

He sells his Danish and Norwegian flags for $11 a piece — a price he acknowledged might be dampening sales. Many protesters prefer to save money and make the flags themselves from scraps of fabric, he said.

Abu Dayya sources some of his flags from suppliers in Taiwan, but he buys Israeli flags from a merchant in Israel, even though he sells them to be burnt at anti-Israeli rallies.

Recommendation: This uptick in anti-Danish investing sentiment still has some legs. Technical charting indicate a rare double-swirl-crown-top, which has only been discussed in theory and never seen outside of experiments using Monte Carlo generators. Danish and Israeli flags are rated a strong buy with price targets of $16 and $19 respectively.