Archive for June, 2007

Piratery Bags: Are they a bottom or are they a top?

Long or Short has long covered the piratery sector. Recent retail hand bag developments have mandated we review the sector, using our patented “Bottom or Top” analysis.

Pictured above is the Ralph Lauren Pirate Motif Billfold and Integrated Credit Card Holder ($355.00) captured in the wilds of Ralph Lauren display cases.

We think this kind of pirate pandering is starting to point to the the fact that while the seas are still frothy for piratery, a correction will create a fashionable buying opportunity. The CTA we don’t have indicates that such an opportunity will present itself in 18 days. If you look at this bag you can see a clear 18 day skull and cross bones formation, which any technician worth his salt knows means:
“Day 1-12: Do not buy
Day 12-17: Prepare yourself and your portfolio with jolly ranchers and Mount Gay (have you got a little Captin’ in you?)
Day 18: Buy”

Long the Pantry

Prices for certain foods are up big. On its last conference call, Costco — in response to a question on where they were seeing price inflation — cited blueberries (up 20%), cheese (mozzarella up 25%), chicken (up 12-15%), coffee (up 12-15%), and butter (up high single digits). These are excellent returns if you’re holding food inventory.

Recommendation: We advocate buying large quantities of cheese, coffee, and butter. Rent temporary storage if necessary. But the best way to play this is probably through live chickens. Own the inventory (chickens) for price appreciation while clipping the dividends (eggs) in the interim. It’s a no lose proposition.

Quotes Entirely Relevant to Investing 06-10-07

Luck is a dividend of sweat. The more you sweat, the luckier you get.
Ray Kroc

Past Quotes Entirely Relevant to Investing

Long or Short Capital Announces Q3′07 Dividend of $0.75

Long or Short Capital’s third quarter of fiscal year 2007 closed on April 30th, 2007. After reviewing our financials, we have determined that the quarterly dividend will be at the formula level of $0.75 per a subscriberholder as of 4/30/2007. To qualify, all you need to be is a subscriber, either by XML or E-mail, as of 4/30/2007. If you were not, you will not be eligible.

For more information on how to collect your cash or cash equivalent dividend for Q3, please refer to our Dividend Policy. Given our float of 1012 subscriberstakes (as of 4/30/2007), a 5% growth assumption and our trailing twelve months total of dividends of $3.65 per subscriber, our current capitalization is $193,925 using a dividend discount model.

Stocks Stocks Stocks: Week in Review June 8th 2007

Everything you need to know about what happened in the stock market this week. The market moved 43 points on news of oil supply increasing or decreasing, important economic reports indicating things about the economy and housewives all flushing their toilet at the same time and causing a run on plumbing during the commercial breaks of the season finale of the Bachelor. That may all have happened two weeks ago, but if it did, the impact was felt on this week’s market.

Avaya (NYSE: AV): If a spin-off from a spin-off of Ma Bell goes private but no one knows what they did, does anyone really care except a bunch of deal measuring PE firms? Avaya is like that guy you know from state colleges (play along with me and pretend) who was a “communications major”. What the fuck is that? I don’t know man, I just don’t know. I think it’s the study of “Future Mortgage Broking.”
Market Impact 17

Krispy Kreme (NYSE: KKD): Donuts are delicious. But dough nuts are frightening. Consider yourself warned.
Market Impact -2

Chinese Stocks (SSE: SSE): All look the same to me.
Market impact 12

DynCorp (NYSE: DCP): Up 15% on news that they captured Saddam Hussein and/or Jason Mewes and fed them to Knut the cute polar bear cub, increasing their Q4 earnings a lot, approximately.
Market Impact 3

Dow Jones (NYSE: DJ) and News Corp (NYSE: NWS): When it comes to strippers A-Rod likes the she-male, muscular type. In this, instance, it’s unclear whether Rupert Murdoch is the petite stripper who spun around once for Bancroft-Rod and got rejected, or the she-male muscular type with whom Bancroft-Rod wants to text dirty.
Market Impact 8

NYSE (NYSE: NYX): The Stock Exchange sounds much more with it than the cumbersome and unmemorable The New York Stock Exchange. Why not go further, drop all vowels, throw in some umlauted e’s and become the mistress to a swanky London Banker. European pandering financial slut.
Market Impact -6

Gazprom (NYSE: OGZPF.PK): At the G8 summit Vladimir Putin said “Gazprom is Gas plus Prom, like high school dance but more gassy. I am DJ and I play songs that tell everyone that I control Gas so begin making dance, comrade.” George Bush responded with the comment “I don’t dance,” but he was later seen dancing. Stock rose 3% on this news.
Martet Impact 30

Long Hopelessly Spoiled Blonds, Medical Professionals

This brown thing isn't all I eatThe Legal profession is a mature industry that has recently entered the “decline” phase of the service offering life cycle. This analyst expects significant decline in the industry and a “Short Legal Professionals” recommendation is a key part of this research.

Though once a critical industry key (even essential) to unlocking value in several areas including:

  • Large and unwarranted money damages (pure windfalls)
  • Access to key decision makers in the highly liquid and competitive market for favorable legislation (lobbying)
  • Freedom (from incarceration after pressing the limits of the capitalist system to the edge)

Legal professionals and the industry show several signs that compel us to “call the top.” These include:

1. I. Lewis “Scooter” Libby (J.D. Columbia, 1975).

Indicted on five felony counts and subsequently convicted in March 2007 and sentenced in June 2007 on four of the counts despite strong evidence that the underlying offense never took place and the recanting of at least one grand jury witness. Even Mr. Libby’s close ties to the most powerful man on earth (Vladimir Putin) failed him and a pardon, usually par for the course and despite his connection with the second most powerful man on the planet (Dick Chaney), seems unlikely. Most concerning, one of the counts was “obstruction of justice,” an ignominious allegation for any lawyer to endure. (Perjury and “making false statements,” by contrast, are absurdly common in the field).

2. Jack Abramroff (J.D. Georgetown, 1986).

Pled guilty on January 3, 2006, to three criminal felony counts in a Washington, D.C., federal court, then on January 4, pled guilty to two criminal felony counts in a separate federal court, in Miami. Subsequently sentenced to five years and 10 months in prison and ordered to pay restitution of more than $21 million. Abramroff’s connection to the second most powerful man in the world also failed him.

3. Richard A. Hutton (J.D. University of California, Los Angeles, 1970).

Who, despite vigorous argument that his client was a “victim of an unfair and unjust legal system,” failed to secure more than a 20 day reduction in sentence for Paris Hilton (despite a six-figure legal bill).

4. Dr. Charles Sophy (Medical Director for the Los Angeles County Department of Children and Family Services and Associate Clinical Professor of Psychiatry at the University of California Los Angeles Neuro-Psychiatric Institute).

Has with a few choice words has managed to extricate Ms. Hilton from:

A. Testifying in a civil suit against her brought by actress and diamond heiress Zeta Graff. (“She is too emotionally distraught and traumatized over her sentence.”)
B. Arriving on-time to her various DUI hearings. (“Ms. Hilton cannot effectively respond to examination as a witness or provide any significant input into her defense.”)
C. Being interviewed by correctional officials to determine her eligibility for a “special needs unit.” (“Ms. Hilton is not capable of any meaningful participation.”)
D. Serving more than 70 hours of her 25 day jail sentence actually IN the correctional facility. (Via close consultation with a correctional review board).

The aggressive move of the medical profession into areas once served by the legal community is a huge indicator and prompts our very strong Long position in the industry.

Investors should consider the arbitrage opportunities of going Short the United States as more and more consequenceless behavior is encouraged, “undisclosed medical conditions,” become trump cards for any offense and annoying, hopelessly spoiled blond girls gain significant market share.


Long Medical Professionals owing to their newly developing powers and wealth transfer from the United States.
Long Annoying, Hopelessly Spoiled Blond Girls owing to their close channel marketing relationships with Medical Professionals and the consequent wealth transfer from the United States.
Short Legal Professionals owing to the decline in their influence, power, wealth and freedom.
Short the United States but more Short Canada, because Canada still sucks.

If Only Water Wasn’t So Fattening

This will work as there is a definitive unmet market here:

Diet Water

Recommendation: Formulated with a unique mix of nothing at all, Diet Water is a compelling sell to health conscious consumers who are weary of being force-fed waters that aren’t not dripping with no calories. Now they have a healthy alternative that allows them to consume as much water as they want without gaining any weight. Long diet water. Porkers and women will buy anything, even if it’s nothing. In fact, they will frequently pay a premium for products with high levels of nothing content.

I’m Calling the Top, today. My ten signs:

  1. Shares of Odyssey Marine Corporation (NYSE: OMR) recently doubled when they announced they found sunken treasure.
  2. Microsoft (NASDAQ: MSFT) (supposedly smart people) paid 38x EBITDA for a company that has half its earnings from a product that Google will probably offer for free.
  3. Sotheby’s (NYSE: BID) stock price has predicted the last two recessions and is predicting another any second:
  4. Dog Yoga
  5. Shares of the Berlin Zoo (BBERG: ZOO.GR) recently doubled due to the birth of a baby polar bear named “Knut“.
  6. Private Equity firms in search of stable cash flows are buying Qantas and Iberia – they are airlines. In case you’ve been dead for the last 50 years, airlines are not in the steady cash flow business.
  7. Blackstone, a company built on the advantages of private vs public ownership, is going public.
  8. Actual NYTimes headline: “At Cannes This Year, the Bankers May Outnumber the Movie Stars”
  9. Michelangelo Volpi left his position as the head of an $11 billion division of Cisco (NASDAQ: CSCO) to become the CEO of startup Joost, which just raised $45mm of VC funding. And he isn’t crazy since Joost will likely be acquired for $40 billion in 2 months, or roughly 5 billion times revenue or negative 30 million times their projected 2010 cash flow.
  10. Chinese solar company LDK Solar traded down after its IPO. That was a disappointment since two weeks ago China Sunergy shot up 51% after its IPO. In fact, there have been 9 solar-cell IPOs since Dec05 with yet another — Yingli Green Energy Holding — coming this week. Point of interest: LDK’s CEO was a shoe salesman 5yrs ago. Today he is worth roughly $1bn.

Addendum: Ours go to 11.
11. China.

WTF is a Gilt Strip? Congrats on taking the CFA Exam Level X

To all those who have been released from the bonds of merit badge exam taking, most of you only temporarily, I salute you. Know that the knowledge which you learned, from Durbin-Watson test statistics to swaptions to neoclassical growth theory, will never in your life ever again be useful to you nor advance you on your quest to spread your seed (or eggs) as wide and far as you can. Welcome, to the day after yesterday, which is one day closer to the day when you can declare “I can and will guarantee superior future returns because I, am a CFA Charterholder.”

Quotes Entirely Relevant to Investing 06-03-07

Skepticism is the chastity of the intellect, and it is shameful to surrender it too soon or to the first comer.
George Santayana

Past Quotes Entirely Relevant to Investing

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