Archive for November, 2005

Pillow Pair Trade

Long or Short Capital has completed extensive fundmental analysis of the pillow market. After surveys, studies, and focus groups a few conclusions have become obvious:

  • Pillows are most often used by consumers for sleep-assistance purposes although they can sometimes be used for back support and/or playful fights in sorority houses
  • The optimal Full Pillow Equivalent (FPE) to Human Head ratio is approximately 1.0x
  • Pillow pricing is directly proportional to the average number of frills per pillow as well as the number of fabric colors per pillow. Pricing is generally inversely correlated to the utility and comfort of a pillow.
  • Some of these conclusions are surprising given the current state of the pillow market. For instance, in the US, FPEs per Human Head are running at almost 3.4x vs. the 1.0x optimal level. Note that this estimate includes almost 6 decorative pillows per household (or 1.2 FPEs). Meanwhile, FPEs per Human Head are approximately 0.1x in developing economies such as Malaysia and Zimbabwe and around 0.6x in China, the world’s most populous country.

    We feel strongly that these trends will converge in the long term with the US (and Europe, to a lesser extent) reducing their consumption of frilly, non-functional pillows and developing countries upgrading from rocks to pillows for head support. Our surveys of starving third world citizens find that pillows run fifth on desired items following only clean water, freedom, blond hair and Pampers for the kids. This presents an attractive investment opportunity.

    We are recommending a pair trade: Go long pillow makers with emerging market focus and short domestic pillow makers.

    I Can’t Agree More… Unless I Change These Words

    People who decry the fact that businesses are in business “just to make money” seldom understand the implications of what they are saying. You make money by doing what other people want, not what you want.

    This is Thomas Sowell’s succinct and accurate rebuttal to all those who decry the manifold splendor of capitalism and stuff. Amazing.

    But this statement is equally true about monkeys throwing feces. Especially when I change the words.

    People who decry the fact that monkeys who throw feces are throwing feces “just to throw feces” seldom understand the implications of what they are saying. Monkeys who throw feces throw feces by doing what other monkeys want, not what they want.

    Germany is Ynamreg spelled backwards.

    In the middle of a European trip I have discovered that Germans are trying to take over the world, again. The combination of their industrious efficiency and unquestionable respect for authority caused the first two world wars and it’s only a matter of time before it happens again.

    Signs Germans will take over the world:
    1. I can choose the exact temperature of the water in my shower here

    2. They all open and start their cars with fingerprints instead of keys

    3. The most popular station at the spa is the ice cold bath (it’s really f-ckin cold, only people plotting world domination would wait in line to be that cold)

    4. The women are slightly attractive, but the whole talking in German thing kind of ruins it, thus the ugliness of the language will prevent the men from becoming distracted.

    5. The floor of the mini-fridge is a scale, when I pick up a bottle, the fridge knows how much each product weighs and shows me the price on a screen. If I pick up two items at the same time, it says “Only touch one item at a time”

    I would tell you to brush up on your German in preparation for their rise to power, but don’t bother they all already speak English anyway.

    Recommendation: Long the German military industrial complex.

    Sellout Saturday Dos

    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???

    Architecture and Tourists

    I’ve often heard that you can spot tourists in NYC or San Fran because they are the ones staring up at the buildings. But I realized today that if you follow that advice, you always end up mistaking architecture students for tourists.

    Long or Short Capital Increases Quarterly Dividend to $1.50 Per Subscriber

    Quarter-to-date performance has been excellent and revenue is growing in the low triple digits. The subscriber base has been growing at a modest rate, so Longorshort has exhibited significant dividend growth leverage. Via my model, the implied current market capitalization of Longorshort is $12,545 and each subscriberstake is worth $193. To be fair, my model wasn’t designed to analyze this kind of investment, but it is otherwise incredible in its brilliance and accuracy.

    Sellout Saturday

    Cash flow. We all know what it is. Everybody wants some. In light of our new Long or Short Capital dividend policy, we need it. But how do we get it?

    Simple. Sell out as much as possible. Each Saturday we will try and take it down a notch and whore ourselves in new and shameless ways. As part of the deal, the following Saturday we’ll let you know how successful our greed was.

    This week’s sellout: Download the limited edition Firefox through the button on the top left of the sidebar. This only applies to people who don’t have Firefox installed already.

    You can put cash money in our pockets and make us rich beyond your wildest dreams. Don’t know what the Firefox browser is and why it is good to use? Well we don’t know either, but rumor has it that it turns html into gold and sends it directly into your bank account. Either that or it makes you 4 inches taller and 3x as smart.

    Each time you download Firefox and install it, use it, and love it, Google issues us a single share in their company. Or gives us a dollar. We’re unsure about that part.

    Download it now before Google runs out of Firefoxes and has to make more.

    Update: This will no longer work, since we removed the button.

    The Game Over Paradigm for News Reporting

    This Marketwatch headline just caught my attention.

    Game over for Chinese Internet game operators?

    I have no opinion as to the veracity of that statement, but it got me thinking: why do these silly little journalists even bother hiding the fact that they don’t actually do any sort of journalistic research? Instead they just take the subject matter for an article, figure out a pun title and and have a team of monkeys* fill the rest.

    Do newspaper firms even do old-school style journalism anymore? Why not shift the paradigm overtly and stop paying lip service to research? Just report the world based on low hanging puns. Think of the brave new world we could create! Everything reported would be thin slice reactions based not on events but the visceral vocabularic responses which they inspire.

    You wake up, put on your mumu and go straight to to see the latest news:

    RIMM results are Berry Good

    Revlon Attempts to put a Good Face on Results

    Caterpillar Demolishes Estimates

    P&G Numbers Need a Swiffer Picker-Upper

    SC Johnson Results Go Down the Drano

    Analysts Examine ConAgra 3Q05 Net Income and Wonder: Where’s the Beef?

    Ipod Competition Seeks to Take a Bite Out of Apple

    Investors are Stone Cold as WWE Wrestles With Declining Ratings

    Rob Glaser Rhapsodizes on Real’s Future

    Lack of Toy Sales Spell ‘Dr Doom’ for Marvel

    When I buy a newspaper company, or, more likely am handed one for free as I walk up from the subway, it’s going to be amazing. Investors will thank me, ladies will love me. Truth is much harder to produce and less marketable than superficial entertainment.

    Recommendation: A savvy private equity firm should pick-up some newspapers on the cheap and apply the Game Over Paradigm; it would be Game Over for the competition.

    Mr Juggles advised on this article

    * People know monkeys for their proclivity for eating bananas and flinging their feces, but few know of the unparallelled productivity which a properly incented monkey is capable of. A few bananas go a long way

    Long the Million Dollar Homepage

    Combining the web, real estate speculation and networking effects, the is a tribute to abstract brilliance. That is precisely the kind of thinking that leads to oversized wealth or companies built direct marketing and affilliate relationships like Cendant. Creating value from thin air. Awesome.

    For people thinking about buying a 10 pixel square for $100, think about 1) the value of an inbound link from a Google Page Rank 7 site and 2) how many clicks over the 5 year holding period which you would need to come out money good. 5 clicks a day for 5 years brings you at capital cost of $0.01 per click.

    Recommendation: Long the milliondollarhomepage, buy buy buy

    Breakthrough in Pharamaceuticals

    In a throwaway article about drug trafficking (link) on, I noticed something that I found to be amazing.

    GBL, or gamma butyrolactone, is sold under the counter at retailers and gyms with claims to build muscle, improve physical performance, enhance sex..

    Seems consistent, nothing interesting…but then we continue..

    ..reduce stress and induce sleep.

    These things seems to be in opposition. How can something enhance sex/improve physical performance AND induce sleep? But, wait, there’s more…

    When taken orally, GBL is converted to the “date-rape” drug GHB, or gamma hydroxybutyrate.

    It’s also a Forget-Me-Now pill! What’s a Forget-Me-Now? According to Gob from Arrested Development:

    pills that create a sort of temporary forgettingness. So if somebody finds out how you do a trick, you just give ’em one of these, and they forget the whole thing. It’s a mainstay of the magician’s toolkit, like how clowns always have a rag soaked in ether.

    These pills are the right mouse button of pharmaceuticals, capable of anything depending on the context. GBL — the one stop drug for a man who wants to enhance his sexual performance to perform date rape via the “Forget Me” method, and then still be able to sleep anxiety free later on.

    Recommendation: Pending FDA approval, which we assume will come any day now for a pharmaceutical product with so many important uses, our massive stockpile of GBH will become liquid gold.

    Outsourcing My Thoughts On Outsourcing: Part 1

    I believe strongly in applying six sigma to everything, from ironing my dress shirts to creating this website. But, there is a limit to how much efficiency improvement I can squeeze out of my creative stone and past that limit I have to look to source my content from other channels, even overseas. Thus, my official position on outsourcing is brought to you by Jack from EZGone in New Delhi whom I hired through He has has prepared a series of short speeches on outsourcing, which he has injected with humor, rhetoric and truth, according to my exacting specifications. What follows is Part 1. Read it aloud with a Brtish accent for maximum effect.

    Outsourcing Outsourcing: What Is Outsourcing And Why It Is Growing?

    Friends, I hope that I am not sounding vague to some of you. I know, I know most of my learned audience knows about outsourcing, but let me give it a try.

    In purely religious terms, it could be seen as one of believers and non-believers. And both sides, there is no doubt in my mind, have very strong, logical arguments as why they are believer and non-believer.

    Friends, at the outset, let me make clear to you that I belong to the camp of believers and I would like to focus on a crucial strand of this outsourcing business — why it is great for firms who believe in outsourcing and actually do it.

    The making of things was outsourced decades ago to foreign nations such as India, China, Japan, Philippines etc. Today, we Americans are hardly aware that most of the things that we see today around us, like our TVs, computers, cell phones, underwear, dentures, cartoons, financial analysis, investment advice etc., must come from somewhere, but we have no real clue who is making them, or how. We are really busy in hiking, trekking, vacationing or any other activities of our choice that we hardly get time to consider these things seriously, and perhaps, we have enough trouble figuring out how to remove the packaging.

    Experts believe that even humor is being outsourced.

    Perhaps, the modern day hip-hop youngsters won’t believe this, but there was a time when Americans actually made physical things called “products” right here in America. Once upon a time, right here, workers would go to large grimy and encrusted buildings called “factories,” where they would take a raw material such as iron ore and perform industrial acts on it, such as “forging” and “smelting” to make their own things. And, as you can easily imagine, by the end of the day, they smelt terrible (not perfumed) but they were satisfied that they had turned the ore into something useful, for example a bicycle.

    But now, we don’t make anything. Rather, we have learned, intelligently, how to get the things done at much lower cost and much faster speed. Credit, of course goes to outsourcing.

    Long or Short Capital Announces 1st Quarterly Dividend of $1.00

    Pending the routine audit of our 1st quarter results, Long or Short Capital plans to begin paying a quarterly dividend, using the cash generated by our hilarious operations to create value for our subscriberholders. The board considered a number of strategeric options including: a hostile takeover of Marginal Revolution, paying bums to advertise for us, and blowing all the cash on hookers and coke. Instead, we have decided to initiate a quarterly dividend of $1.

    Our reasoning was simple: We realized that we value you, our readers, and now you will finally be able to value us. Literally. Assuming a $1 quarterly dividend, no growth, and an 8% discount rate, being a subscriberholder is worth $50.

    Who are your subscriberholders:
    Email and XML subscribers as of 10/28/05. These are the only readers we can reliably verify and who will be eligible for this 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 a dividend:
    For Email Subscribers: Send an email to from your subscription email with your paypal address and we will send you $1. Cash money.
    For XML subscribers: Send an email to with the “Subscription Verification Code” enclosed (you should have received a “magical word” on Sunday in our feed). Enclose your paypal address and we will send you $1. 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 per subscriberholder or (80% of revenue) divided by the number of subscriberholders at quarter end. The latter formula would have yielded a $1.50 dividend, so the $1 dividend has quite a bit of cushion. After this quarter, we will require people to fulfill some sort of registration, as of yet undetermined, to be eligible. It shall be light.
    We will also revise up the dividend if our revenue per a subscriber improves; we will never revise down or suspend the dividend without a proxy vote of registered subscriberholders.
    Why are you doing this:
    1. We will be 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. It combines finance with the absurd.
    4. 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.
    5. We obviously are not in this for the money so this is a much more appropriate use of the ad revenue.
    6. Numerated lists are pretty sweet.

    How do I become a subscriberholder:
    Use the buttons and forms at the top left 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 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.

    Risks and Uncertainties
    Neither the SEC nor any state securities commission has approved or disapproved of the subscriberholdership securities or determined if this prospectus is truthful or complete. As a subscriberholder, you are being granted Class B shares in Long or Short Capital LLC. You should probably realize that Class A shares (there is actually only one Class A share and it’s held by Mr Juggles) have perfty-perf votes per share compared to 1.25 votes per share for Class B.

    Long or Short Capital Q1’06 Results

    Our fiscal quarter ended on 10/31/05, and we had a banner quarter, our best quarter ever, thanks to the stalwart efforts of management and their compensation package which was heavily weighted towards long dated options in the company’s non-existent stock. We have a lot of skin in the game, so you should trust us.

    Unaudited Financial Results for Q1’06

    Income Statement
    Revenue $109.03
    Cost of Sales $0.00
    Operating Income $109.03
    Balance Sheet
    Cash $0.00
    Accounts Receivable $430,000,109.03
    Inventory $3.99
    Accounts Payable $3.99
    Cash Flow Statement
    Operating Cash Flow $0.00
    Capex $0.00
    Distributions $X.00
    Performance Metrics (mix of Kanoodle/Blogads/Adsense/Yahoo)
    Visits 81,431
    Pageviews 143,151
    Clicks on ads 402
    Ad impressions served ~268,000
    Subscribers by Email 30
    Subscribers by XML 33
    Inbound Links per Technorati 26
    Inbound Links per Google 7

    Readers are to submit questions by email to misterjuggles; if we get enough questions and of enough quality we will post a quarter end conference email in which we promise to cuss out any analysts who ask pesky questions. As a preface, let us just say that our own Project Propeller was an unmitigated success. We feel great about our first quarter, we are proud to have delivered earnings per a share of $DIV/0 and we will continue to build on our resume of greatness.