Long or Short Capital

Economists can go on at length about how inefficient Christmas gift giving is and how much deadweight loss is born from the rituals of Saint Nick. The solution is simple and two fold.

1. Replace all gifts with money
2. Buy stuff for yourself and give it to yourself according to our schedule below.

We have provided to you, our reader, a sampling of things which our sophisticated proprietary algorithm indicate that you may like. We recommend you buy them all to improve global Christmas efficiency and buy this stuff for yourself to have right after Christmas.

Money Art

It’s pop art created by a Anthony White, who is both a former Australian stock broker (for real, an actual stock broker) and a genius. The pieces are affordable as far as art goes, and they will only get more expensive on a nominal basis due to the structure of the product, and paintings on the secondary market have been selling for mulitple hundreds at a minimum. It comes in four flavors: USS, Sterling, Euros and AUD’s. It makes a great gift for oneselves and it looks great on the walls of your office. “What is up with that painting?” “It’s money.” You’re damn right it is.

The majority of the LoS staff own multiple paintings and we are satisfied investors (see our earlier report on Anthony White’s Money Art).

Things and Gaming

If you can get a Nintendo Wii, get it. Now. There is no reason anyone who travels and enjoys video games should not have a DS Lite — you can play Mario Kart on it, you can rock a new version of 2D Super Mario Brothers on and it lends itself to picking up/putting down playing. Playing a DS up in first class says: “I’m am so good at my job that I can play video games while you slave away on Powerpoint.”
Meanwhile, the Bunn MyCafe creates delicious caffeinated morning fuel that obviates a Starbucks detour. And the Sonicare will change your life, even if it is only a toothbrush.

Movies

The list below consist of awesome movies that you may have missed. We figure that is more value add than just purely the best movies. Grizzly Man is a must watch, and Murderball teaches you not to feel bad for guys in wheelchair because they probably pull more tail than you do.

Music

These are the prettiest album covers. That is how we pick our music. You will like all this music, that is what our gut tells us from looking at the album covers.

Books

“You Can be a Stock Market Genius” is the best investment book we have read, period. “A Heartbreaking Work of Staggering Genius” is just that, and is by the man behind LoS fav McSweeney’s. “Fooled by Randomness” addresses how most people are stupid about probabilities. “Peace Like a River” is awesome fiction.

Amazon’s Proprietary Stuff You Should Buy Algorithm

Below is what Amazon says you will like based on the content of our site. Which one is better? We will leave that one to your discretion.

LoS’ Amazon Prime Search Engine Partnership

Lastly, LoS is partners with ShipHopShop which provides a site which searches Amazon.com but only returns items which meet the search criteria AND are elibible for Amazon Prime. This saves you the hassle of searching Amazon only to find that your stuff doesn’t qualify for Prime.

Disclosure: LoS gets a % of all revenue created through all the above Amazon purchases. We take that % and distribute it back to our readership via our dividend policy or use it to advertise for the site. We may also, from time to time, embezzle that money to buy more staff yachts.

We loved Strategic Craps. World domination is fun and an important skill to develop for finance. But there is something lacking when you know the opponent you are mercilessly crushing is not alive. A fellow Strategic Craps fan created a solution by making Multiplayer Strategic Craps (which he erroneously branded “KDice”). We recommend spending your entire Friday sharpening the skills for which you are being highly compensated: grasp of probabilities, valuation analysis, strategic and tactical wizardy and most importantly, willingness to roll the dice.

LoS is listed on the 1st page of Google Results for “hot boobs” and it is our most powerful search engine term according to the trailing two weeks schedule from Google Analytics. All thanks to our research report Save These Hot Boobs from Cancer.

Long or Short Capital’s fiscal 1st Quarter ended on 10/31/06, and the company reported its results in a press release:

Mister Juggles: “Good morning everyone, let me welcome everyone on the line to hear me talk about our best quarter ever. Last call I introduced you to what I think is a really swell statistic, sequential same store traffic, and I put it forth as the key metric we use internally to gauge our success. Last quarter the figure was a strong 21%; this quarter that metric came in at a Googlesque (google that word with MSN Search or Yahoo if you don’t know what it means) 146%. When you consider that 146% came on top of a 21% comp, you really see the power of our model. We have maintained the highest same store traffic rate of the entire Online Financial Humor/Abstract Investment Recommendation Industry.

We generated earnings per subscriberholder of $0.60 compared to $0.38 in Q4’06 and $0.32 in Q3’06. We generated $350 in revenue for the quarter, a 222% increase YOY, and 178% sequentially. We continue to faces headwinds in our contextual advertising due to low click through rates and our experiment with Adsense has yielded lower than historic ECPM’s, but we leveraged our increased traffic volume to increase segment revenue 185% on a sequential basis.

Our strategic focus has been on growing our static ads, specifically the text link ads. Text link advertising accounted for 40% of our Q1’07 revenue, and on a runrate basis, it should rise to 50%+. This revenue is such a focus to us because of how the associated revenue tends to be recurring and very sticky, while the ads themselves are unobtrusive. Our subscribership increased from 282 to 381.

We continue to work on getting better payment terms from our ad vendors; we have had some challenges in this sector with some of suppliers of static ad inventory but we are optimistic that we can bring working capital down to 10-15% of sales. Historically, it has ranged from 25-35% of sales. In terms of liquidity, we reduced our PIK (“Payment-in-kind”) debt to zero and now have cash on the balance sheet of $114.38, despite working capital being relatively flat.

We had our best quarter ever in terms of revenue, free cash flow and qualifying traffic. We think we have established the platform both operationally and financially to build an online powerhouse, and our goal is to do 5-7% better than your expectations every day, on every post and in every quarter. If not, we will cook the books to make you think we did that.

Note that the financials below are unaudited and may contain non-GAAP measures. All numbers comply with Seldom Accepted Accounting Principles (SAAP).

Unaudited Financial Results for Q1’07

Income Statement

Contextual CPC Revenue $109.45

Static Ad Revenue $214.33

Other Revenue $27.31

Total Revenue $351.09

Cost of Sales $19.55

Marketing Expense $100.15

Operating Income $231.39

Balance Sheet

Cash $114.38

Accounts Receivable $140.36

Inventory $0.00

Prepaid Marketing/Hosting/Reg $163.05

Accounts Payable $0

Cash Flow Statement

Operating Cash Flow $222.17

Capex $0.00

Dividends $X.00

Performance Metrics

Visits 16,900

Pageviews 31,850

Clicks on ads 100

Ad impressions served 55,000

Subscribers by Email 68

Subscribers by XML 313

Inbound Links per Technorati 345 from 65 Sites (+65 on Blogger)

Inbound Links per Google ~214 sites (plus 62 on Blogger)

Past Results (due to our reliance on SAAP, previous unaudited financial results are not reliable)
Long or Short Capital Q1’06 Results
Long or Short Capital Q2’06 Results
Long or Short Capital Q3’06 Results
Long or Short Capital Q4’06 Results

This post is sponsored by ReviewMe.

ReviewMe is a service created by Text-Link-Ads founder Patrick Gavin to offer advertising within blog posts. I don’t mean contextual ads like those offered by Google or Yahoo, I mean actual content created by the authors of a site that is written purposely to exclaim the delicious taste of Lucky Strike cigarettes or the powerful advertising platform that ReviewMe will be.

And now I will tell you why I am short this very concept.

It’s a simple process to get paid to review something.

1. You submit your site to ReviewMe, filling in a brief form containing details about your site.
2. They approve your site and list it on their marketplace.
3. SiteX.com or Service Z browses the marketplace and decides that your site would be perfect to review their product.
4. You get a notice that SiteX.com or Service Z wants you to write a review of them on your blog. You accept the proposal.
5. You have 48 hours to write 200 words about SiteX.com or Service Z and place it on your site and you will be paid 50% of whatever they paid ReviewMe.

But they pay you TO write on something not for WHAT your something says. So they are paying LoS $50 to give the LoS subscriber base the recommendation to SHORT them along with the entire Web 2.0 Index. They just paid me to write that! Genius or Madness? I would definitely opt for the latter.

From their FAQ:

Can I require a positive review?

We do not allow advertisers to require a positive review. The vast majority of reviews are measuredly positive, although many do contain constructive criticism. We view this as a bonus: how else can you quickly and cheaply get feedback on a product or service from influencers?

ReviewMe pays money for people to selectively write from the gut on a product, which is the way things should be. What business worth investing in does things the way they should be? That whole premise runs counter to everything we have learned from the Satan’s Portfolio Theory of Investing, namely that the best way to make money is to make/produce/offer products with the least amount of ethics possible. By these standards, ReviewMe is set to underperform the market and we recommend backing up the short truck.

Long or Short Capital is having its strongest quarter ever in terms of revenue and expect that working capital has improved significantly. The results should be a strong growth in the dividend pool available to qualifying subscriberholders. We have also poured a significant amount of our cash flow into advertising spend but that does not affect the dividend pool. We will release our Q1’07 financial results on November 4th.

Bill Burnham,former venture capitalist, former Wall Street analyst, current blogger and now founder of a tech fund, took a 6 month hiatus from his blog but now is back. We mention it because back in February his post about Long or Short Capital is what gave us the momentum, both mentally and traffically, to keep this site going when our momentum at its lowest. He highlighted how much he enjoyed different articles on our site and basically spun some lies about how amusing we are.

Here is his current plotted course:

I suspect I my have some commentary on the hedge fund industry from time to time, but given that my new fund will continue to be deeply embedded in the high-tech venture capital space I will continue to write about venture capital and interesting new technology trends.

So if you were a former Bill Burhman reader, flock back to his site, and if you haven’t read him in the past, read him now @ Burnham’s Beat. His commentary on the internet and tech industries is as sharp as occam’s razor.

Long or Short Capital’s fiscal 4th quarter ended on 7/31/06, and the company reported their results for both Q4’06 and FY’06 in a press release on their site:

Mister Juggles: “Long or Short had 4th quarter performance in line with management’s expectations for the slower summer months. Sequential same store traffic of 21%. This is the key figure I would like to share with you in today’s call, and while there are other figures that would show what we have done, these figures would be much more ambiguous, some could even be used to make our results look “not so hot.” Sequential same store traffic is a like-for-like measure of our number of visits in Q4 compared to Q3. As you can see, we were 21% more trafficked than last quarter, a growth rate which is the best in the Online Financial Humor/Abstract Investment Recommendation Industry.

We generated earnings per a subscriberholder of $0.38 compared to $0.32 in Q3. Our accounts receivable is a little higher than we’d like it to be due to unfavorable payment terms and a one-off timing issue with one of our largest accounts. Working capital was also challenged by our securing of a 5 year extension of our domain registry costs, which was payable up front. Revenue was flat sequentially but our reliance on Yahoo CPC advertising has been reduced and our runrate revenue should be at a higher level. In the Yahoo segment, our click through rate increased 20% sequentially, but that gain was offset by a 34% decrease in our revenue per click. Our suscribership increased from 161 to 282.

We now have $115.56 of Payment-in-Kind (PIK) debt which is off-balance sheet and was previously undisclosed. Management has experience operating in a leveraged environment, and the debt should be reduced substantially by the end of Q1’07 from working capital.

We passed several milestones in our first year, including our 30,000th visit to our new storefront, as well as 100,000th visit overall. We also fell in love. We hope that in the coming year we can repeat what we did well last year, and improve on it, by approximately 5-7% in every measure.

Note that the financials below are unaudited and may contain non-GAAP measures. All numbers comply with Seldom Accepted Accounting Principles (SAAP).

Unaudited Financial Results for Q4’06

Income Statement

Contextual CPC Revenue $38.47

Static Ad Revenue $78.50

Other Revenue $14.11

Total Revenue $126.08

Cost of Sales $19.55

Marketing Expense $0.10

Operating Income $101.43

Balance Sheet

Cash $0

Accounts Receivable $190.14

Inventory $0.00

Prepaid Hosting/Reg $115.05

Accounts Payable $0

Cash Flow Statement

Operating Cash Flow ($34.83)

Capex $0.00

Dividends $X.00

Performance Metrics

Visits 16,900

Pageviews 31,850

Clicks on ads 100

Ad impressions served 55,000

Subscribers by Email 50

Subscribers by XML 232

Inbound Links per Technorati 154

Inbound Links per Google ~71 sites

Past Results (due to our reliance on SAAP, previous unaudited financial results are not reliable)
Long or Short Capital Q1’06 Results
Long or Short Capital Q2’06 Results
Long or Short Capital Q3’06 Results

Long or Short Capital’s fiscal 3rd quarter ended on 4/30/06, and the company reported their results in a press release on their site:

Mister Juggles: “Following our best quarter ever, Q3’06 occurred amongst a background of industrial turmoil, rising oil prices, the month of March and global uncertainty. In that context, we are satisfied with our results and if we continue to pour our beakers full of managerial brilliance into this frankenstein we are confident that our Q2 performance will be more predictive of our future results than Q3. While management’s options were underwater at quarter end, a board approved “Put the Options Back in the Black” KERP plan was initiated ensuring that management will continue to be properly incentivized.

We generated cash earnings per a subscriberholder of negative $0.22 a positive increase of negative 46% over last quarter. We were cash flow positive for the 1st time in history with $35.14 of cash flow before dividends and tax distributions; this is mainly attributable to an improvement in working capital. Revenue decreased 38% sequentially, but increased Div/0% year-over-year. We faced both a 50% decrease in our click through rates for our contextual advertising and a 50% decrease in revenue per click. Our suscribership increased from 85 to 161, almost doubling.

Operation Sir-Click-A-Lot was an abject failure, and had no effect on our top line. Traffic wise we performed in line with expectations. The first full quarter at our new storefront @ longorshortcapital.com has proven to be all we expected, and its strategic location between longorshortcapitak.com and longorshortcapitam.com has given us a steady flow of captive readers.

Note that the financials below are unaudited and may contain non-GAAP measures. All numbers comply with Seldom Accepted Accounting Principles (SAAP).

Unaudited Financial Results for Q3’06

Income Statement

Contextual CPC Revenue $71.58

Static Ad Revenue $38.02

Other Revenue $11.00

Total Revenue $120.60

Cost of Sales $15.00

Marketing Expense $50.00

Operating Income $55.60

Balance Sheet

Cash $55.83

Accounts Receivable $88.10

Inventory $0.00

Prepaid Hosting $30.00

Accounts Payable $0

Cash Flow Statement

Operating Cash Flow $82.96

Tax Distributions to Partners $80.00

Capex $0.00

Dividends $X.00

Performance Metrics

Visits 13,950

Pageviews 26,150

Clicks on ads 90

Ad impressions served ~43,874

Subscribers by Email 34

Subscribers by XML 127

Inbound Links per Technorati 108

Inbound Links per Google ~40 sites

Past Results
Long or Short Capital Q1’06 Results
Long or Short Capital Q2’06 Results

So I was clicking on our banner for the Grameen Foundation, because it’s a great cause and I like to check it out every couple weeks, and when I clicked through, I saw a woman, probably a very poor one, holding up a phone right at me and I couldn’t figure out why. I looked closer at her phone and realized it was NICER than my phone.

I’m not sure if this a reason to be bullish on Grameen as way to reduce global poverty through microfinance or more of case for Shorting JD because his phone sucks and is out of date. There is probably even a case to be made about the sorry state of domestic wireless options compared to the rest of the world, thanks to lack of competition, regulation and the Great Satan.

Either way, she’s really rubbing it in my face.

This is a secret sell-out. I struggled forever to get a small form factor site search module from either Yahoo or Google. At first, I opted for Yahoo as it seemed to be the more flexible code and hoped it would boost our Yahoo search ranking which seemed to blow. I settled on Google once I stripped out a bunch of different aspects of it and got into the smallest size possible. So if you want to add Google Site Search to your Site and in the slimmest fashion, use the code below. Be mindful that you need to replace the three bracketed portions (“yoursitehere.com”) with your own url in the format as it is in the brackets. But remove the brackets. Works great in a sidebar, as you can see at the bottom of ours.

Here is the code: Link to Google Search Module Code

Here is a picture of an orangutan:

By using this code, you are essentially leveraging yourself to my coding skills. Which plays into my self-involvement meme.

Long or Short Capital’s fiscal quarter ended on 1/31/06, and the company reported their results in a press release on their site:

Mister Juggles: “We completed a watershed first Half to our 2006 Fiscal Year. Q2’06 was our best quarter ever, thanks to the genius of management and a compensation package which continues to be heavily weighted towards long dated options in the company’s non-existent stock. We have an ever increasing amount of skin in the game so you should trust us, subscribe your friends to our site and find ways to generate more free cash flow for us which will turn into dividends for you.

We feel great about our 2nd quarter and our 1st half, and we came in at the high end of our recent guidance. We are also proud to have delivered cash earnings per a subscriberholder of negative $0.48 an increase of some sort of imaginary number over last quarter’s EPS of $Div/0. We have taken a cash hit from working capital due to our 79% quarter over quarter revenue growth. In response, we have taken the steps of sourcing advertisements from vendors with more favorable payment terms. This should lead to an opportunity for w/c to be a substantial source of cash going forward. We also enjoyed a nearly 50% increase in subscribership from 60 to between 85-90, breaking 101 at points.

Our marketing spend increased by infinity% quarter over quarter, a steep rise. Our “Project Propeller” brought in roughly 350 visits at a cash cost of $100. We expect it to continue to generate 100 hits per a quarter for 5 years, so we are looking at a visitor acquisition cost (VAC) of under $0.10 on a discounted basis.

We have transferred successfully to our new WordPress 2.0 Content Delivery Platform. And more noticeably, we have altered our storefront from longorshot.blospot.com to our new longorshortcapital.com site which is strategically located between longorshortcapitak.com and longorshortcapitam.com.”

Unaudited Financial Results for Q2’06

Income Statement

Contextual CPC Revenue $116.37

Static Ad Revenue $66.91

RSS + Referral Revenue $12.02

Total Revenue $195.30

Cost of Sales $55.00

Marketing Expense $100.00

Operating Income $40.30

Balance Sheet

Cash $29.69

Accounts Receivable $132.64

Inventory $0.00

Prepaid Hosting $45.00

Accounts Payable $0

Cash Flow Statement

Operating Cash Flow ($42.52)

Capex $0.00

Distributions $X.00

Performance Metrics

Visits 7,639

Pageviews 11,093

Clicks on ads 175

Ad impressions served ~42,703

Subscribers by Email 30

Subscribers by XML 55

Inbound Links per Technorati 60

Inbound Links per Google ~16 sites

“Readers are to submit questions by email to misterjuggles or in the comments section below the post; if we get enough questions and of enough quality we will post a quarter end conference email/chat thing that will allow all of the sell-side analysts out there to fill out their models with the really important metrics like ARPU, maintenance capex spend and whiskeys per post. We will answer all questions provided they inspire humor. Our updated dividends will be announced later this week, as soon as tomorrow, if JD wakes from of his alcohol induced slumber.”

Subscriberholders are locked in; moneys to be distributed as well as a new “In Kind” non-monetary payment.  Email subscribers we have your email; RSS subscribers got secret squirrel messages.  Glee abounds.  Our future is bigger than LiveDoor.

This post could have been titled “We tried to sell-out but Google wouldn’t let us.” Why wouldn’t they let us? Because Google’s Firefox referral is a complete abject failure — we didn’t get paid for any of our referred downloads. Live and learn. Bye Google referral, we’d rather invest our money in lime futures than waste sidebar space with your link.

This week we have better sell out. Adverts in our RSS feed. Yahoo finally has them and we’re going to stick them in, and report the results one week from today. And you’re going to love them because who doesn’t love ads???