It's like Mardi Gras meets the bombing of Dresden...
Monday, October 31, 2005
I've decided that pornography is entirely too mainstream and prevalent. I'll give three examples.
  • I watched part of a special on HBO about porn star Katie Morgan the other night. Basically, it was Katie Morgan sitting naked in a chair for thirty minutes talking about her rise as a porn star. Besides her being butt ass naked, the format was one of the least sexual things I've even witnessed, short of amorphous blob Louie Anderson. Why did she have to be naked? It was totally unnecessary, but I guess I wouldn't have watched otherwise... Touche HBO.
  • While hanging out at Barnes and Noble last night, I saw the autobiography of Jenna Jamison situated adjacent to, you guessed it, the biography of Pope John Paul the II. The books weren't touching though, which makes sense, (insert Catholic priest pedophile joke here). You all knew that was coming, I shouldn't even have to write it out.
  • I just walked into my bathroom to take care of some urgent business, and I started flipping through the magazines on the sink. I happened to flip through, when I thought I saw what appeared to be the cover of a Superman comic book. I was momentarily excited, until I pulled it out and it was just another issue of Playboy. It wasn't a total loss though, it was the Denise Richards Christmas issue and c'mon, I'm not that desensitized. Yet.
Charlie Sheen is an idiot. I dare you to disagree.

If you aren't too upset about me not making a single, obligatory masturbation joke, then check out my updated SCOTUS post down below. Also, I bet the title of this post will help drive up traffic to my site!
Friday, October 28, 2005
Criminal Superposition
Lewis "Scooter" Libby has been indicted by a federal grand jury on five counts, none of which were related to the original investigation in the Valerie Plame leak. I'm all for prosecuting for perjury, obstruction of justice, and making false statements, but I think the whole thing is a bit ridiculous if there was NO ORIGINAL crime.

An expert on law I'm not, but does it really seem fair to investigate criminal wrongdoing, find out none existed, and then issue some indictments for crimes caused by the investigation? Perhaps the question we should ask is- do crimes exist prior to investigations? Granted, there could be a lot more going on underneath the surface here, and genuine criminal infractions may have been committed by "Scooter" Libby, but I have a hard time believing that you can attempt to cover up a crime you didn't commit. How would he even lie about this? Would he have to confess, knowing that he didn't actually do it?

Furthermore, I have misgivings about the "False Statements Statute"- the government catch-all that makes lying a crime even when not under oath. The statute has been interpreted to the extent that any false information given at any time can be prosecuted provided the false information ends up in government hands. The "Martha Stewart" clause works something like this... "Well, you didn't commit a crime, and you didn't lie under oath, but you lied at one point to some guy about information that is somehow relevant to the crime that didn't occur based our investigation, so... congratulations, you get five years in jail and we get to feel like we actually did something."

Also, apparently as a nod to CharlesPierce's summation of every headline in the last four weeks, the article was not complete without this nugget. "Libby's indictment came at a time when Bush's approval ratings already are at a low ebb. This week alone the president's embattled Supreme Court nominee, Harriet Miers, withdrew, and the number of U.S. military deaths in the Iraq war surpassed 2,000."

Also in the news, Clinton pardonee Marc Rich has been implicated in the UN Oil-for-Food scandal according to Paul Volkert's report. I think we all know where the real corruption lies when it comes to Presidential networks...
Thursday, October 27, 2005
Harriet Miers? Machine Gun Sammy!
Harriet Miers has finally been withdrawn. I think everyone can breathe a sigh of relief and join me in saying "Screw another nominee, let's have more confirmation hearings for Roberts and then give him two votes."

Does anyone else get the feeling that Bush just single handly owned everyone and their mother who would advocate for a Supreme Court nominee based on their gender? I don't quite feel sure enough that this is premeditated to declare it the single most brilliant political move since the Republicans stole an election with a worthless Warren Harding, but it's close. Maybe Bush, with a plethora of extremely capable John Robert-esque men, realized that giving one of them the initial nomination would cause an incredible amount of backlash from the quota-loving Dems, along with some spineless Republicans trying to become media darlings. To circumvent this, he nominates one of the least qualified women he can find, someone non-threatening to the left, ensuring her torpedoing by the right, so that he can finally nominate someone who really deserves it. By orchestrating that her downfall is initiated by the right, Bush guarantees the viability of the nuclear option. Do you really think that any House Republican will vote against Alito after the mushroom stamping Harriet Miers recieved at their... um... hands? Besides, Alito is from Philly, effectively castrating the bastard of the Republican party, Arlen Specter. After 15 years without a complaint on the Federal Bench, there can be no question as to Machine Gun Sammy's competence. Brilliant...

"Mmmmm... baccarat at you!"
Tuesday, October 25, 2005
Why Is This News?
CNN has taken a poll that states Bush would lose an election to a Democratic challenger if one were held this year. Besides being totally irrelevant, this poll suffers from one gigantic flaw. You can't have an election consisting of a person vs. an ideology. It isn't a logical comparison, it is a referendum on Bush, and with approval ratings well under 50%, it makes sense that he would lose. If we were to flip the poll question around and run any Democratic against a nameless, faceless Republican challenger, it is fairly obvious the challenger would win. Regardless of the fact that the Republican base is considerably larger (explained in Politics and Polarization), without a specific alternative, the poll becomes entirely subjective as to what people would regard as the virtues of the challenger.

Going back to the 2004 election, George Bush didn't win on a calculated matchup of political values, he won because John Kerry was a complete douchebag. I can't speak for anyone but myself, but I don't vote because I identify strongly with one of the candidates, I vote because in essence to pick the lesser of two evils. Like the election for mascot on South Park, I chose Turd Sandwich over Giant Douche. Would I vote for the Democratic challenger over Bush? Not likely, because when I hear Democrat I think of all the major flaws associated with a Kerry, Feinstein, Schumer, HRC, or other mainstream weasel-crat. However, if I changed my a priori conception of Democrat to match up more closely with a CharlesPierce, then the choice becomes tougher. Without some kind of definitive characteristics for the challenger, every single person polled is basically answering a different question once they read in their own personal beliefs associated with the label "Democrat", so I would say the question is entirely worthless.

On a different note, I got wicked drunk with a PGA tour player last night and argued about marginal tax rates on the rich. It totally kicked ass. I even got a job offer to drive his RV around next year from tour event to tour event, and I'm actually considering it...
Saturday, October 22, 2005
Does Palestine Deserve Independent Statehood?
What does the phrase, "We gave what? to who?" remind you most of? The Nobel Prize Committee a day after the 1994 ceremony? Ronald Reagan learning of Iran-Contra? Congress learning of the Clinton's relationship with John Huang?

It might be one of those for now, but pretty soon it will be the collective world the day Palestinian statehood is announced. In an article over at, it is reported that Palestinian Authority Chairman Mahmoud (I'm not Arafat) Abbas has stated that Palestinians could be ready for independent statehood by the end of President Bush's second term in office. Incredibly, President Bush has also agreed to this idea (no doubt making the Harriet Miers nomination easier, after all, one bad turn deserves another), although he has recently pulled back from his earlier statement in which he hoped to accomplish this by the end of the second term.

Do the Palestinians deserve independent statehood? Is Israel shortsighted enough to let this happen? No and hopefully not. Name one thing Palestine has done on any kind of level to deserve concessions from Israel and recognition on the world stage. Renounce violence? Nope, 66% of Palestinians support the murder of unarmed Israeli civilians, including KIDS, through homicide/suicide bombings. I've felt a little anti-semitic too from time to time (A $0.68 tip? You know what, just keep it), but even then I didn't feel like strapping TNT to my body and blowing up their children. Can Israel and Palestine even co-exist if Palestine was to get statehood? 51% of Palestinians do not wish for a Palestinian state alongside the Jewish State, but one instead of her.
"Being in the Hamas Color Guard helps me get chicks out of their burka"

Think back to the last time Israel made a concession to the Palestinians, within hours of giving up Gaza, Palestinian rockets were being launched at Israeli cities. My personal opinion (previously kicked around with Redhurt and Barnabas at a Pittsburgh Quizno's) is that Israel gives a foot from time to time in order to take back a mile (Barnabas sat through the Gaza pullout security briefing and said it was virtually indefensible).

Israel knows that they can't fight terrorists as aggressively as they would like without attracting global scrutiny, so to avoid charges of antagonism they are willing to suffer a rocket or suicide bomber from time to time in order to fly gunships over to the West Bank and take out everything they can find wearing a ski mask and carrying an AK-47. Want the easist solution to the problem? Send all the Palestinians to Jordan. Ethnically, they're the same anyway.
Thursday, October 20, 2005
Job Description
While at work today, I was instructed to write up a job description for my position (assistant professional) by my boss. Thinking he would actually check the description I wrote before turning it in to his boss, I put "A pittance" instead of a dollar amount in the wage section. As I later found out, apparently I'm the only one who thought this was funny.
My Favorite Shorts
Politics of Polarization not good enough for you? Fine. Here is what you'll get instead: Some pictures of my favorite shorts I bought in tenth grade that I threw away yesterday (now) and a bunch of screenshots from "The Venture Brothers" (not now, later). Have at it...

These shorts kicked ass...
Tuesday, October 18, 2005
I found this picture of Saddam in an article over at Voice of America.

The article really wasn't worth blogging about, but I wonder where these photos come from? My hypothesis-

US Guard 1: "God, I'm so bored. Let's do something..."
US Guard 2: "Ok, What do you wanna do?"
US Guard 1: "I dunno, let's play with Saddam. Saddam, what do you want to do?"
Saddam: "I bought a new suit. Let's work on my portfolio!"
US Guard 1: "For killing like a billion people, you sure are gay..."
US Guard 2: "Mmm.. that's good. Now pop your collar a little bit!"
Saddam: "Like this?"
US Guard 1: "Good, good. A little more pensive...Now give me Blue Steel... no wait... show me MAGNUM!"

...presto, there's the picture. Now read my preceeding post, it has the substance this one lacks.
The Politics of Polarization
William Galston and Elaine Kamarck have released a new study, entitled "The Politics of Polarization" that "examines the recent past, the present, and the foreseeable future of modern-day electoral politics." Drawing on the success of their first report back in 1989, "The Communist Mani..", I mean, "The Politics of Evasion" which helped shape the direction of the Clinton presidency, Galston and Kamarck appear to be on a mission to save the Democratic Party from itself.

By their analysis, the current Democrats have deluded themselves on four seperate topics.
  • The Myth of Mobilization- Galston and Kamarck state that previous Democratic strategies have been to energize the base and bring them out in record numbers. However, this has been failing for a number of different reasons. First, for every election since 1976, the Republican base has been around 50% larger than the Democratic base. Second, Republicans are becoming to be at least as effective as the Democrats in encouraging large numbers of their base to vote. Third, Republicans have been making substantial headway among women, hispanics, and Catholics. Also, the Democratic base has been increasingly hijacked by the extreme left, which finds itself increasingly at odds with mainstream America.
    "They are more likely to be secular in their orientation, only half as likely as other Americans to attend religious services weekly, and only one third as likely to participate in Bible study or prayer groups. 61 percent of Liberals oppose displaying the Ten Commandments, versus only 22 percent of all Americans. A remarkable 80 percent of Liberals favor gay marriage; less than one-third of their fellow Americans agree. In the area of defense and foreign policy, 67 percent of Liberals believe that the preemptive use of military force is rarely if ever justified, versus only 35 percent of all Americans. 65 percent favor cutting the defense budget to reduce the deficit; again, only 35 percent of the electorate would go along with them. Liberals are only half as likely to be military veterans as are Americans as a whole. Only two-fifths report that they regularly display the U.S. flag, versus two-thirds of their fellow citizens."
  • The Myth of Demography- This "claims that long-term, ongoing changes in the U.S. population will secure a Democratic majority for decades to come. Among the major components of this shift are: a growing class of post-industrial professionals; women (especially those who are single or highly educated) affected by the feminist revolution; and Hispanics and Asian immigrants, who have come to the United States in record numbers during the past generation." However, this doesn't agree with the immediate future where large numbers of people from predominantly blue states in the Northeast and Upper Midwest are moving to red states, shifting the demographic map Republican, and fails to consider Republican successes in attracting larger blocs of traditionally Democratic groups. While Democrats have been successful at attracting larger numbers of the educated (no doubt a result of their entrenchment in the Ivory Tower), they have been losing ground among lower income workers and Hispanics.
    "Experts agree that Hispanic support for Republicans was almost certainly higher than it was in 2000.xv In addition, the family income of Hispanics grew more rapidly than that of any other ethnic group during Clinton’s second term and Bush’s first term. Not surprisingly, attitudes of Hispanic votersare increasingly parallel to the attitudes of voters in the rest of the population."
    In other words, Hispanics are beginning to realize that in order to keep their money they should vote Republican, or it will be forcibly redistributed.
  • The Myth of Language- "The thesis that the problem with the Democratic Party is not what it believes, but rather how it speaks. This thesis comes in two variants — the simple-minded and the sophisticated. The simple-minded version says that if Democrats have a problem with observant religious believers, the solution is for candidates to quote the Bible as often as possible. The sophisticated version, most closely associated with the eminent Berkeley linguist George Lakoff, focuses on the need to situate issues within attractive "frames"—phrases, metaphors, and narratives that trigger favorable associations and persuade voters to go along." However, Galston and Kamarck quickly move on to say that the first is false because voters witnessing decades of irreverancy won't immediately change sides the first time Ted Kennedy says "Yeah, I believe in Jebus," and the second is false because John Kerry "could not 'frame' his way out of what the public saw as a contradiction between his initial vote authorizing the president to go to war against Iraq and his vote against the $87 billion supplemental appropriation needed to fund it." Duh. Furthermore, "Democrats are in trouble today in part because they lack a coherent approach to foreign policy, espouse positions on key social issues thatstrong majorities of the electorate reject, and have failed to offer compelling economic proposals that speak to the new economic challenges of the 21st century. Rhetoric cannot solve substantive problems such as these." I totally agree with that analysis. I'm just amazed it the Democrats until almost 2006 to come up with this on their own when I've been hearing it from Republican analysts on the Dems since shortly after Bush won the presidency.
  • The Myth of Prescription Drugs- "The Myth of Prescription Drugs is our shorthand for the proposition, which seems to bewitch political consultants, that Democrats can win present-day national elections by avoiding cultural issues, downplaying national security, and changing the subject to domestic issues such as health care, education, and job security. This proposition fails thetest of political reality in the post-9/11 world." As the chart below shows, Democrats are incapable of winning an election when national security matters. The only two elections won by Democrats in the last quarter century occured after the Cold War ceased to be an issue and before terrorism was taken seriously. "Moreover, Democrats’ focus on the details of domestic policy proposals comes at the expense of cultural issues, which for many voters are seen through the prism of candidates’ individual character and family life. As Democrats wring their hands over the partly mythical What’s the Matter with Kansas syndrome, Republican campaigns rarelymake this mistake."
Galston and Kamarck conclude their paper by laying out some criteria that the next Democratic candidate should fulfill in order to have any chance of success in the 2008 election and beyond. "We would argue that of all the tests national candidates must pass, the personality test is the most important. This test may be summarized in three questions that voters are asking and that candidates must answer to their satisfaction. First: Is the candidate a person of strength, with core convictions and the ability to act on them through challenges and criticism? Second: Is the candidate a person of integrity, who displays consistency over time, who tells the truth, and whose words and deeds coincide? And third: Is the candidate a person of empathy, who understands and cares about people like us?" My challenge is to name one person at the forefront of the Democratic party who espouses these virtues. Can't do it? Not suprised. The only person who failed to vote for the war in Iraq TWICE before deciding their political fortunes could be better served on the "Bash Bush" wagon was Russ Feingold.

"Take me seriously!"
Thursday, October 13, 2005
I Hate My Bank- Revised
One of my friend's sent me a check for $2,500 to become a partner in my Ameritrade account, so I deposited the money in my account on October 3rd. Knowing that it was a large check, I asked lady behind the counter how long it would take to clear so that I could access the money to deposit it in my Ameritrade account. She informed me that it would post by the next day. I wasn't sure about this, but I checked my account online the next day and my online statement showed that I had slightly over $4,000 available. Seeing this, I deposited the money into my Ameritrade account. However, a few days later I recieved the inevitable "unavailable funds penalty". Immediately pissed off, I sent this email.
I see that I was penalized $32.00 on October 7th for an unavailable funds penalty. I can only imagine that this is related to my deposit in my Ameritrade account (that being the only large withdrawal). However, I did NOT deposit the money in the ameritrade account until the $2500 dollar check showed up in my online balance. If the money was not available than it should not have been included in my balance. I would like that $32.00 replaced in my account as soon as possible.
This is what I received.
Thank you for contacting SunTrust regarding the transaction for $32.00 on October 7, 2005 to your account ending in XXXX.

This transaction is an Unavailable Funds (UAF) penalty. As soon as your check card is used, the purchase is placed on hold, or in a pending status. The transaction is immediately deducted from your Available Balance. When items are set to post, they post against your Available Balance. If items post against non-sufficient, unavailable or uncollected funds, a per-item penalty of $32.00 may be assessed to your account and the checks may be paid or returned unpaid.

There were not enough funds available for the $2,552.00 item. The item was paid and your account was assessed the UAF penalty per item.

If you have any additional questions or comments, please feel free to contact us again. We are available 24 hours a day, 7 days a week and look forward to satisfying your financial needs.
Wow, thanks for not helping me or answering my question at all. I'm going into the bank tomorrow and it is quite possible that I will close this account if I can't get my $32 back. Not because $32 is a big deal, because I hate when banks do this shit.


Before I went into the bank this morning I reread this post a couple of times along with some stories from realultimatepower to make sure I was sufficiently pumped up enough to demand my money back. As I stormed into the bank two things immediately happened, both not in my favor. First, I saw a midget trying to make a deposit and that made me happy because A) it's a midget and B) he was wearing a cowboy hat, and second- out of the four customer service people I happened to get ushered into the office of the really, really hot one. It's been a couple of hours, but I definately remember her looking something like this-

-except she wasn't wearing the HALO index for a necklace.

So basically instead of me tearing someone's face off, the conversation went like this.

Her (referred to as Famke the rest of this post): "Can I help you out with something?" *smile*
Me: "Uh... yeah.. um... I have this charge on my account, and I don't think it's right...."
Famke: "Let me take a look."

After that everything gets a little fuzzy, but I'm pretty sure before I left I apologized for taking up her time, admitted that it was my error in some way, and offered her the use of my organs if she ever happened to be in a bad car accident. I think she liked me because she gave me my $32.00 back. I rock.
Monday, October 10, 2005
In the Free Market Game of Life, Women are Commission (and Possibly the Capital Gains Tax)
I was looking for a way to make this story long enough for its own post, but there just isn't enough to it. After opening the shop on Sunday morning, I was feeling tired so I went home to take a nap. After letting Scrappy in from outside, I laid down on the couch, turned on the History Channel and went to sleep. I was awakened twenty minutes later by Scrappy, who climbed up on the couch and threw up on my head. Seriously, I wish I was making this up. He is lucky he isn't my dog, or I would have totally thrown him in the dryer for a few cycles.

The more I read and learn about the stock market, the more I realize it is EXACTLY the same as Texas Hold 'Em, complete with its own sweet lexicon. For example, "I hit my inside draw on fourth street for the nuts" easily translates to- "After an early breakout, I doubled down and caught a late rally eventually closing at a new high" regardless of whether or not Alan Greenspan uses the phrase, "Irrational Exuberance".

Also, both are zero sum games. In poker, for every winner you have a loser. It's the same in the market, although it doesn't make as much sense intuitively. It's obvious in poker, because every time you take down a pot you stare down the douche you took it from. It's a little different in the market. The reason the market is a zero sum game is because for every buyer, there IS a seller. It seems like you can just throw money in for thirty years and come out ahead guaranteed. However, this can only happen if you can find someone to sell it to you intially and to buy it at the end. In essence, some of the gains and losses aren't realized in the same timeframe, leading to the misconception that the market isn't a zero sum game. For example, I buy 100 shares of Bloaty's Pizza from seller X. If Bloaty's Pizza accumulates value, I win and the seller loses unless he uses the money from the sale to invest in something that makes as much or more money as Bloaty's Pizza. If that is the case, then the loser is just removed from me by any number of trades. I'm pretty sure this is correct, but if you can think of a valid counterexample let me know. I didn't think this was true at first, but I can't think of an example that contradicts it.

The great thing about zero sum games (my mom refuses to acknowledge this point, which led us to having the same talk about the market as we did when I told her I made over $1000 playing internet poker my junior year) is that provided you act on better information than half of the field consistently, you WILL come out ahead. Basically, if you can understand how the market reacts to company financial statements and technical analysis more consistently than Billy Douche-Donkey, you can exploit him for your own financial gain. For example, Warren Buffett vs. your average tech bubble day trader.

"I use the efficient market hypothesis and $100 bills to make Berkshire Hathaway brand adult diapers."

Another important similarity is the rake. Poker games have THE rake, the market has commission. The poker rake is different in that it only taxes winners at a percentage of the win (apparently that bastard Hoyle was a bleeding heart liberal), and commission hits everyone, sometimes negating a small gain. Also, if beating commission isn't hard enough for small volume investors like myself, I then have to pay capital gains tax, which I'm sure the government uses to pay government lawyers who make it illegal for individuals to trade without a broker, thereby making it inevitable that I'm hit with that damn commission.

Lastly, the most important similarity is that to win in both, you have to know how to lose. The most important lesson in Hold 'Em is to not get involved with less than premium hands, and to fold when the board comes out 9h,10h,Jh and two people raise into your Ad,As. The same holds for the market, it doesn't make sense to gamble on a stock that is trading at forty times earnings, or buy a company that employs the parasitic UAW. (Hey-O! Take that formerly impenetrable liberal fortress!) Fold marginal hands into big raises and keep a tight trailing stop-loss, because three small losses and one big win keeps you coming out ahead.

The Bikini Escort Company is on (read the review, it's hilarious), so I'm out. Besides, it's officially October 11th- so I'm off to the gas station to buy some beer for the first time with a real ID!
Saturday, October 08, 2005
Celebrating Diversity
I read this in Michael Yon's latest post the other day, "Humor can strengthen bonds. There were other times, when Kurilla would come in and talk about people we had captured or killed, and tell Eid, “You’re falling behind!” Or he’d bring in pictures of detainees and say, “Please circle your relatives so we can release them," and it reminded me of a story I had been meaning to post.

About a week ago I was hanging out at work with my boss watching TV, when Jose, our Puerto Rican chef, walked in and changed the channel to Emeril, who was *BAM* making waffle batter.
Daren (my boss): "Jose, how come your waffle batter doesn't look like that?"
Jose: "Yeah it does, just wait..."
Me: "C'mon, they don't eat waffles in Mexico"
Jose: "... I'll make some right now."

About ten seconds after I said that, Jose finally catches it and says, "Fuck you, I'm Puerto Rican!" and Daren starts laughing. Jose goes back to the kitchen and I went back into the shop. About thirty minutes later, Jose walks into the shop carrying a plate with a waffle along with some butter and syrup.

Jose: "I was trying these out for the breakfast tomorrow and I thought you might want one."
Me: "Thanks man. (I take a bite) Jose, this is terrible! What is in here?"
Jose: "I put a potato in, I thought you'd like it more..."

Fuck you Jose, I'm not even Irish.
Wednesday, October 05, 2005
On the way to work today, I heard this incredibly well written blurb from an anti-drug commercial. " foward twenty years, your child is sitting in your basement too stoned to move, after they dropped out of college, failing to get the good job they deserved..." Good job they deserved? Why exactly did they deserve it? I thought they wasted their youth smoking pot... it made me so mad that I punched John Kerry and Tom Brokaw in the face. Just kidding, I wasn't mad at all. But seriously, I still punched those douchebags.
Tuesday, October 04, 2005
Outback Steakhouse and Seagate Technologies

I was just sitting in the shop while it stormed outside, three quarters done with this post, when I noticed the lights flicker in the bar. I quickly hit the save as draft button just as the power went out across the entire building, saving this post for posterity. You'd think that the power would all go out simultaneously, but since I replaced the copper wires with praseodymium ones the electrical impulse was delayed long enough for me to save this post. And no, that really doesn't make any sense even if you read the article it's linked to, which is totally sweet since it deals with a breakthrough for quantum computing...

My blog is in some ways a reflection of myself, in the sense that what I blog about is a reflection of my interests. As of the past week, one thing I find myself becoming increasingly interested in is the stock market and investing in general, so don't be surprised if more and more of my posts relate to the current moves I'm making in the market- as opposed to things like why Ted Kennedy deserves a good dousing at the public urinal.

Case in point: After my initial killing on InFocus (infs), my next move was to acquire Seagate Technologies and Outback Steakhouse. For reasons as to why I bought Seagate, read Barron’s article. You can't access it without a password, so I'll paraphrase from the interview.

Seagate, the largest disc drive maker, is down to $15 from $21.
Marcin: The run rate of earnings is $2.20 a share (me: that is one of the main things we look for, apparently we'll buy just about anything if earnings are $2 a share.).

So this is a classic defiance stock? (me: A defiance stock is one that you buy when current opinion is against it, i.e. in defiance of prevailing market strategy)
Marcin: It is a classic stock where the P/E ratio is too good to be true. One of two things has to happen. The stock price has to go up meaningfully, or the earnings have to degrade materially. We believe that the investment community has it wrong this time on Seagate.

What's the knock against SeaGate?

Marcin: The knock is that the disc drive cycle is as good as it gets. And SeaGate is doing so well from a profitability and competitive perspective that it can't get any better. We think that is silly. Seagate is the market leader with a 30% share. Unit growth is accelerating because of consumer electronic applications and pricing degradation is slowing. For the first time in five years, the industry is experiencing double digit revenue growth, yet there are only two companies making money, Seagate and Western Digital. The other [4] are breaking even. There is no incentive for the industry to embark upon a price war when the industry on a whole is breaking even.

What's going right for the industry?
Marcin: The consume electronics market, which was only two million units two years ago, could be 75 million units this year. Disc drives are in mp3 players, set top cable tv boxes. The home run application would be cellphones. We don't know yet whether small disc drives or flash memory takes over the storage function of a cell phone handset. Nokia makes a fun that has a hard drive in it, if the industry gets 10% of the cell phone market in three years, that will be 100 million hard drives in cell phones. If that story plays out, Seagate, with it's 30% share would be a major beneficiary.

Could Seagate hit $25 in a year?
Marcin: It could be $30 a stock. The stock was at $30 two years ago when it had a run rate of $1.50 a share. It wouldn't be unreasonable to put a 13 or 14 P/E ratio on $2.20 of earnings for a globally dominant technology company with double-digit growth ahead of it.
Hmmm... interesting!

For Outback, I'm going to attempt to offer a simplified explanation from how it was explained to me. Outback sales have increased steadily by about 260 million dollars a year for the last five years to over 3 billion dollars last year. Basically, the Outback operating model is to generate ridiculous amounts of cash, use that cash to build more restaurants, and then create even more ridiculous amounts of cash. This cash is then kicked back to the investors in the form of ever increasing earnings per share (also total outstanding shares have actually been decreasing- which is basically reducing outstanding debt, further increasing EPS), which increases the overall price of the stock. The chart below illustrates the steady upward trend of the stock price.

From the chart, you will also see that Outback continually fluctuates around the average positive slope of the price based on momentum trading. You'll also see that right now it appears to be at a trough (draw a line through all the lows and you'll see they match up surprisingly well). While in no way is this a guaranteed indication that the price will soon rise, I like it. Also, the price/sales ratio is .82. Here is what Yahoo has to say about the P/S ratio-
As the name implies, the price/sales ratio is the company's price divided by its sales (or revenue). But because the sales number is rarely expressed as a per-share figure, it's easier to divide a company's total market value by its total sales for the last 12 months. (Market value =stock price x shares outstanding.) Generally speaking, a company trading at a PSR of less than 1 should attract your attention.

Think about it: If a company has sales of $1 billion but a market value of $900 million, it has a PSR of 0.9. That means you can buy $1 of its sales for only 90 cents. There may be plenty else wrong with the company to justify such a low price (like maybe it's losing money), but that's not always the case. It might just be an overlooked bargain.

O'Shaughnessy found that PSRs work best for large-cap companies, perhaps because their market values tend to be much closer to their massive sales to begin with. The ratio is less appropriate for service companies like banks or insurers that don't really have sales. Most value investors set their PSR hurdle at 2 and below when looking for undervalued situations. But, as always, we'd counsel that you compare a company's PSR value to its competitors and its own history.
Outback Steakhouses are most definitely are not losing money. Over the last five years, the P/S ratio has averaged around 1.13. Undervalued? I think so. However, today I lost money on both companies. My solution? I'm doubling down as soon as the new deposit clears.
Sunday, October 02, 2005
While up here in Grove City, I was hanging out watching TV with Georgie at 2:30 in the morning up in Alumni. I'm not sure what channel we were watching, but the show was the modern version of The Twighlight Zone. The first episode featured such entertainment luminaries as Method Man and Jonathan Davis from Korn, not to be confused with the Jonathan Davis who went to your high school (odds are there was one...). Besides having a budget roughly equal to the GNP of equatorial, pre-invention of the stick, New Guinea, the script was most likely plagarized from a C project that high school Jonathan Davis wrote when taking theatre as a required class at community college. I was having a wonderful time making fun of it until I was interrupted by a commerical break with noticeably higher production values. One of the commercials was a promo for a later episode of The Twighlight Zone that featured, among others, Shannon freaking Elizabeth.

I'm still incredibly hot even when exposed to flourescent bathroom lighting.

Yeah, the same Shannon Elizabeth with the ridiculously hot, manufactured foreign accent and magnificent breasts from American Pie. Apparently, Shannon was so wildly successful in American Pie that she was able to negotiate a no-nudity clause for her next (and utimately last) not premiering on television or DVD movie, Tomcats- thereby effectively removing her one piece of bargaining power from the table.

While I don't follow her career, I have noticed her from time to time and will attempt to chart her decline here, without the assistance of IMDB.

1) American Pie
2) Tomcats (Jerry O'Connell was also in this movie, destroying any possibility of success)
3) The Enron Movie on CBS
4) The Twilight Zone at 2:30 in the morning opposite the perennial favorite- whatever kitchen gadget Ronco is marketing

Apparently, she is very near to reaching rock bottom and I have decided (altruistically of course) to help her salvage her career by featuring her in the much anticipated documentary I am intent on making. Knowing she is desperate for any part, I plan to abuse my position as head of casting to make her sleep with me to cement her role as the star of the documentary, which, incidentally, will be titled- I Have Sex with Shannon Elizabeth.