Archive for April, 2006

Could Not Be Shorter on Coca-Cola Blak

My position is so short, it may actually go negative short, which would be a long and would be terrible for all. Just like this horrendous disgusting concoction from Hades. Coke with double the caffeine, half the carbs and infinitely more “rich coffee essence.”

Just as a service to the Coca-Cola Company (KO) here are some other combinations which, if you care about your shareholders even a little, we recommend you should never combine.

  • Mayonnaise, beer and walnuts.
  • Corriander and Bette Middler.
  • Chocolate and plutonium.
  • Bubble gum, strawberry and post-modern feudalism.
  • The phrase “lack of internal controls” and my money.

Recommendation: Short Coca-Cola for producing the first product that could be accurately described as “swill.” Long red wine & coke and a double huzzah for green tea & whiskey.

Long Japanese Bathroom Technology

Returning from a recent trip to Tokyo and enamored with Japanese technology in general — and bathroom-related technology in particular — I recommended that an acquaintaince of mine pick up a few shares of Toto. Two weeks later, I find out that he has invested in a comeback attempt by Toto, the multi-platinum, Grammy-winning band responsible for the hit, Africa.

I suppose I should have been more specific, especially since US investors are typically skeptical that a toilet maker can sustain a $3.6bn market cap and a 37x P/E. To clarify and rectify my mistake, I hereby formally recommend a long position in Japanese toilet technology plays. Our extensive field testing indicates that the new features such as the Cyclone Flushing System and the integrated rear warm water washing in products like the Neorest 600 will allow Toto to increase market share and deliver solid returns, as well as encourage me to stay regular.

It’s Direktanlage Wednesday!

Everyone post your insider information in the comments section of this post. There is no way the SEC will find out about us this time! Make sure your comments follow our specific Direktanlage Trader checklist as outlined below.

Comments must:

  • Contain insider information that will let us reap fraudulent (and likely abstract) profits.
  • Be highly illegal.
  • Be sourced from a Croatian, German, Russian or someone of evil descent.
  • Give guidance on alleged inside-trader Monika Vujovic, who we have conveniently marked with our insider trading lasso: I would share way more than 50% of the “fraudulent proceeds” with her; further analysis is pending.

I Will Teach You to Be Rich: Clean Tech Pure Play

Readers are always emailing me, asking me to explain exactly how I maintain such an enviable track record. So here’s a step-by-step case example of how to make money on a startup.

Step 1: Find a hot sector
Investors often talk about the “rising tide” law of investing: better to own a mediocre company in a great sector than a great company in a terrible industry. When a sector gets hot, the crap often rises as fast (or faster) than the cream.
No sector is hotter right now than “CleanTech.” How hot? Big name venture capitalists are now raising cleantech-only funds. Bush discusses clean energy in every address he makes. And solar power — solar! have I gone back to the future? — stocks like Evergreen Solar (ESLR) and SunPower (SPWR) are doubles coming out of their IPOs.

Step 2: Create a pure play
Investors love pure plays. When a sector is hot, they want as much exposure as possible. Take online advertising. Sure, News Corp (NWS-A) owns MySpace — the fastest growing web site and community — but you have to buy a whole bunch of newspaper, cable, and satellite TV assets too. The performance of those assets will drown out any positive developments at MySpace. Instead, investors clamor for stocks like Yahoo (YHOO) and Google (GOOG) …they’re pure plays.

So for cleantech, I will start a company from scratch to ensure it’s a pure play.

Step 3: Find a great name
Now that we’ve found a hot sector and, we need to find a name that will inspire the masses. SunPower works well, conveying a sense of action and virility. Fortunately, the stars have truly aligned in this case as Pure Play connotes both a provider of cleanliness as well as a streamlined stock. Perfect!
A star is born:

Step 4: Find a strong management team
I, Mr Juggles will run this company. Done and done.

Step 5: Profit

Disruptive Jobs of the Past

The new X-Men comes out this summer and on scanning the cast list, I noticed that Psylocke will be played by Mei Melancon, who has done little other work of merit, except for an appearance on Deadwood. Her exact role:

“Deadwood” – Childish Games (2005) TV Episode (as Meiling Melancon) …. Chinese Slavewhore

If ever there was a disruptive industry, slavewhoring would have to be it. Back in the good old days, being a land (capital) owner meant you would have your labor done by your slaves and your sexual needs satisfied at the local whorehouse. This was just how it was done, and never the two met (except maybe an ancilla or two in the days of ancient Rome).

Slavers and pimps enjoyed high margins and pricing power over their customers. But then in the 19th century, the Chinese, peering out from behind the veil of their opium dens, saw that by combining slavework with whorework, their slave or whores could command a premium on the market as opposed to if they were just single-use assets. This innovation destroyed the market for suppliers who could supply either only slaves or only whores. It is a classic example of disruption utilized in MBA classrooms to this day. Thank you.

Quotes Entirely Relevant to Investing

The job of a Russian man is to plant:
His house in the ground (sic).
His seed in a woman.
His neighbour in jail.

-From Ruminations on Russia

Short Dick Grasso

Today, a recurring Dealbreaker feature involving Dick Grasso has spurred our analysts to break another aspect of the scandal involving David Delainey and Mark Davison, first exposed by Long or Short and threatening to engulf Wall Street: Star Trek Celebrity Imposters on Wall Street.

The Dick Grasso article clued in one of our staff who, on further investigation, has revealed that Mr. Grasso is also involved in the imposter scandal. Mr. Grasso has reportedly been taking fees for appearances at various Star Trek functions as “Arturus,” a guest character on Star Trek Voyager played by Ray Wise, reknowned for his role as Leland Palmer on Twin Peaks, and more lately, as the Vice President of the United States on 24.

Alien Imposter Dick Grasso?

Recommendation: Short Dick Grasso, Star Trek in all forms. Underweight “Alien Nation”. As always, accumulate the Wookie.

Maybe Not Marketing

From a very earnest, deep-voiced P&G (PG) advertising executive on a recent conference call:

“When a girl starts menstruating, we want to be there…on the radio, in print, and on the web sites with relevant advertising.”

From a very earnest, eager McKinsey consultant:

“Now we’re focused on figuring out what it is about Metamucil that makes it so attractive.”

Satan’s Portfolio: MO, RMBS, DLM

Here is an explanation of Johnny’s Satan’s Portfolio Investing Thesis.

Altria (ticker: MO)

Why would a $145bn market cap company change its name? If it’s business was selling products to slowly kill its customers through addictive fire-lit tobacco. Satan knows that even that kind of mortal churn is capable of generating a stream of free cash flow to reward its stockholders. He also relates personally to the business strategy implicit behind the name change:

“They are trying to bury themselves. This is a name and brand the objective of which is to make themselves invisible.”

Invisible merchant of death. Play to the Dark One’s ego, Altria, while selling your murderous and addictive macaroni & cheese.

Rambus (ticker: RMBS)

The joys of trade conferences. Open bars lead to both professional and non-professional miscegenation, with ideas and STDs flowing as much as well-liquors. Every company benefits from these exchanges, but some companies realize you can benefit a little more; by attending them, illegally secreting away your patents and watching as the trade conference seek to adopt open standards based on your non-disclosed patents. This is know as THe Rambus Way.

Even better when a company can supplement this by negotiating incredible lock-in contracts with the largest OEM in their industry despite an expensive and laggy product. Rambus was also a pioneer of the “professional patent hostageers” business model that has been adopted by publicly traded firms like the SCO Group (SCO)and private ones like NTP and lawfirms across the country. In Satan’s dream world, no one would create anything, people would only fight over what already exists.

Del Monte (ticker: DLM)

Del Monte is known as a diversified food brand, selling everything from bananas to pet food. But not only are their bananas harvested in the same unethical conditions that permeate the business, but they even operate the acquired assets of the former United Fruit Company, an all-time great. Del Monte also recently acquired Meow Mix for a 12x multiple, a huge discount to the number of times “Meow” occurs in their insidious jingle. You need to fear the the Power of Meow.

Biopiracy Downgraded to “Not At All Pirate Like”

The recent Captain Hook Awards for Biopiracy do not play into the piratery investing series, because they are not truly piracy. If so-called “Bio-Pirates” were using frigates, sloops and galleons to plunder the likes of Genetech (DNA) off the Barbary coast, then aye, we could approve on the basis of demonstrated piratery.

But a mere interest in applying manipulated genes to grow 400lb watermelons and create a personal synchronized swimming team comprised solely of cloned Scarlett Johannson’s does not a pirate make. Despite that, the status of Monsanto, the genetically modified crops company, as a previous winner of the Captain Hook Award is a definitely a buy sign for MON per our Satan’s Portfolio thesis.

Short Cocaine, Heroin, Microsoft

Recent research by Long or Short questions the purchasing power of the Family of Four (“FoF”). During the process of investigating pricing changes relevant to the decline of FoF purchasing power, Long or Short also identified several trends in the wholesale and retail drug trade.

Increasing prices in Cocaine and other “A-List” narcotics have jump-started online disintermediation of street dealers and spawned a growing industry in price comparison for illicit drugs. MSN is the first internet provider to jump into the fray as the links below show:

Heroin in the Age of Crack-Cocaine price comparison at MSN Shopping Compare Heroin in the Age of Crack-Cocaine prices before you buy to make sure you get the best deal. (link)

Free Cocaine price comparison at MSN Shopping
Compare Free Cocaine prices before you buy to make sure you get the best deal. Find a list of Free Cocaine prices from multiple vendors at MSN Shopping. (link)

MSN’s entry into the marketplace will exert strong downward pricing pressure and is sure to bring other entrants (GOOG) into the market. This loss of pricing power compounds the pressures on the The Big Three (cocaine, marijuana and heroin), as the more nimble, efficient and market responsive meth, as well as a host of other addictive drugs, continue to grab market share. With their high legacy social stigma costs, the Big Three may very well not be able to adjust their position to compete effectively with the upstarts.

Recommendation: Short Cocaine, Heroin, Microsoft (MSFT). Long Investment Bankers (due to increased disposable income from dropping cocaine prices).

Quotes Entirely Relevant to Investing

That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.

-Abraham Lincoln

Past Quotes Entirely Relevant to Investing

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