Let’s put aside all these ridiculous rumors and put a stop to the just as crazy emails I have been getting from IU basketball fans.

I support Mike Davis. Without reserve.

As much as anyone I would like to see us back in the NCAA Finals where Coach Davis took us a few short years ago.

I think Coach Davis shot for the moon in his recruiting a little too much and saw his best incoming players going to the NBA. I think now he has adjusted his recruting approach andI LOVE the nucleus of freshman that we have and the progress they made over the course of the season.

Good job Coach Davis.

Go IU!

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Came across my desk, thought it would add to the minutae of information

Number of lineups played per team through march 14th

1 Atlanta 434 lineups used
2 Boston 319 lineups used
3 Charlotte 597 lineups used
4 Chicago 292 lineups used
5 Cleveland 257 lineups used
6 Dallas 374 lineups used
7 Denver 347 lineups used
8 Detroit 324 lineups used
9 Golden State 396 lineups used
10 Houston 385 lineups used
11 Indiana 428 lineups used
12 LA Clippers 328 lineups used
13 LA Lakers 243 lineups used
14 Memphis 350 lineups used
15 Miami 251 lineups used
16 Milwaukee 298 lineups used
17 Minnesota 209 lineups used
18 New Jersey 527 lineups used
19 New Orleans 382 lineups used
20 New York 358 lineups used
21 Orlando 325 lineups used
22 Philadelphia 281 lineups used
23 Phoenix 233 lineups used
24 Portland 336 lineups used
25 Sacramento 306 lineups used
26 San Antonio 254 lineups used
27 Seattle 170 lineups used
28 Toronto 253 lineups used
29 Utah 386 lineups used
30 Washington 321 lineups used

The Mavs current injury free starting lineup of Damp, Fin, Dirk, Josh Howard and Jason Terry has played a total of 293 minutes together.

The Suns starting lineup of Nash, Marion, Amare, Richardson and Johnson has played a total of 1057 minutes together

Sacs New starting lineup of bibby, Songalia, mobley,Peja and Skinner has played 85 minutes together so far.

The Spurs starting five of TD, Rasho, Ginobbli, Bowen and Parker has played 575 mins together

And the Sonics starting 5 of James, Lewis, Allen, Ridnour and Evans has played 666 mins together.

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The Sport of Business.

I can’t go more than a week without shooting baskets. There is something about the feel of the ball coming off my hand, and the sound of the ball going through the net. It just feels good.

If I’m just standing in the gym, I can shoot pretty well. Playing in a game. Well it’s not quite what it used to be. I used to have a spin move that would work for me no matter who I was playing against or what level they were at. If I could get a pick and the defender went under, I didn’t have to think about it, I could hit the shot. These days, my mind knows what to do, but my body just laughs at me. Put me up against 20 year olds, and I won’t embarass myself but it’s only because I know how to set a pick and hit an open,a very wide open jumper, and spend the rest of the game getting out of the way.

I love to compete. I always have. Playing basketball was just something I had to do no matter how good I was and its something I will always do, no matter how old I get. It gives me a chance to blow off steam. It gives me a way to refocus.

But no matter how much I love to play the game or how involved and competitive I getduring aMavs game, it’s only a minor release. Real competition comes from the sport of business.

In sports, you know who your opponents are. You know when you are going to play a game. You know pretty much how long the game will last. It’s mentally and physically exhausting if you are at the top of the game, but it still pails at the effort required to be successful in business.

The sport of business isnt divided into games. It’s not defined by practices. It doesn’t have set rules that everyone plays by.

The sport of business is the ultimate competition. It’s 7×24x365xforever.

I love the sport of business. I love the competition. I love the fire of it. It’s the feelingof the clock winding down, the ball is in your hands, and if you hit the shot you win…all day, every day.

Relaxing is for the other guy. I may be sitting in front of the TV, but I’m not watching it unless I think there is something I can learn from it. I’m thinking about things I can use in my business and the TV is just there.

I could take the time to read a fiction book, but I don’t. I would rather read websites, newspapers, magazines, looking for ideas and concepts that I can use. I spend time in bookstores because 1 idea from a book or magazine can make me money.

I’m not going to go to dinner with you just to chat. I’m not going to give you a call to see how you are. Unless you want to talk business. Other guys play fantasy sports. I fire the synapses to get an edge.

That’s what success is all about. I’ts about the edge.

It’s not who you know. It’s not how much money you have. It’s very simple. It’s whether or not you have the edge and have the guts to use it.

The edge is getting so jazzed about what you do, you just spent 24 hours straight working on a project and you thought it was a couple hours.

The edge is knowing that you have to be the smartest guy in the room when you have your meeting and you are going to put in the effort to learn whatever you need to learn to get there.

The edge is knowing is knowing that when the 4 girlfriends you have had in the last couple years asked you which was more important, them or your business, you gave the right answer.

The edge is knowing that you can fail and learn from it, and just get back up and in the game.

The edge is knowing that people think your crazy, and they are right, but you don’t care what they think.

The edge is knowing how to blow off steam a couple times a week, just so you can refocus on business

The edge is knowing that you are getting to your goals and treating people right along the way because as good as you can be, you are so focused that you need regular people around you to balance you and help you.

The edge is being able to call out someone on a business issue because you know you have done your homework.

The edge is recognizing when you are wrong, and working harder to make sure it doesn’t happen again.

The edge is being able to drill down and identify issues and problems and solve them before anyone knows they are there.

The edge is knowing that while everyone else is talking about nonsense like the will to win, and how they know they can be successful, you are preparing yourself to compete so that you will be successful.

That’s what makes business such an amazing sport. Everyone plays it. Everyone talks about how good they are or will be at it. Just a small percentage are.

Every single day someone has an idea. Every day someone talks about some business they want to start. Every day someone is out there starting a business whose entire goal is to beat the hell out of yours. How cool is that.

Every day some stranger from any where in the world that you have never met is trying to come up with a way to put you out of business. To take everything you have worked your ass off for, and take it all away. If you are in a growing industry, there could be hundreds or thousands of strangers trying to figure out ways to put you out of business. How cool is that.

The ultimate competition. Would you like to play a game called Eat Your Lunch. We are going to face off. My ability to execute on an idea vs yours. My ability to subvert your businessvs your ability to keep it going. My ability to create ways to remove any reason for your business to exist vs your ability to do the same to me. My ability to know what you are going to do, before you do it. Who gets there first? Best of all, this game doesn’t have a time limit. It’s forever. It never ends. It’s the ultimate competition.

It’s the sport of business. It’s not for everyone, butI love it.

I’m fortunate. I have done well enough financially thatI don’t have to play 24×7x365. I can and have cut back to 18×7x365. Family first now.

But in those 18 hours, you can bet I’m competing, and loving it.

But that’s me. You have to figure out what works for you.

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Extend the story. That’s how scams usually stay alive. A Press Release. A law suit. Those are the easiest ways to keep a story alive. They give the scammers something to point to and say”see, I told you so. It’sa real issue”. In reality anyone can put out a press release or file a law suit. The fact that they are thereis what matters. Whether or not they have any basis is usually meaningless.

Another way to keep a scam alive is to get a politician involved. For some reason, rather than thinking it taints a situation, as I would, some seem to think it makes a scam stronger.

I dont know what it is about Utah Senators, but they always seem to be victimized to extend scams. In this case, my email inbox, and the blog comments, are being filled with “See I told you so. It’s real because Sen. Bennett of Utah says its real.”

Here are the comments from Sen Bennet as referenced in Dow Jones Newswires.

Donaldson fielded complaints from Sen. Robert Bennett, R-Utah, who said new SEC rules to combat short-selling abuses aren’t working. Short-selling, which involves the sale of borrowed stock, is legal, the SEC chief noted. But Bennett said it appears the SEC has failed to stop abusive “naked” short sales, in which sellers don’t borrow stock and have no intention of borrowing it. He also raised concerns about stock-option accounting.

Call me a cynic, but is it just a coincedence that Sen Bennett and Overstock.com’s resident Naked Short Crusader CEO Patrick Byrne are all officed in the same city and state?

I won’t jump to any conclusions, I will let the facts come out. I will however add that just because a Senator asks a question, particularly a Senator from Utah, doesn’t give the topic any validity.

As I said above, to me it makes the argument more suspect.The smell gets worse. The harder someone tries to convince me the sky is falling down, the more I smell a scam. The Naked Short Crusaders are trying way to hard to convince me and anyone who will listen. The volume of “if you were only on our side, we would have a voice” emails is way too loud.

My scamdar is pretty good, and its vibrating loud and clear on this issue.

The good news is, that where there is scamming going on, there is money to be made on the other side. I thinkI will start in Utah to look for companies that letworrying about Naked Shorts take time away from running their businesses.

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With all thediscussion on the blog about Naked Shorting, much of which was more like a spy novella than a market discussion, I have gotten too many emails asking what my positions in the market are.

First, the disclaimer. Do your own research. None of the mentions are endorsements or suggestionsfor you to trade the stocks I have positions in. Although I believe that stocks are marketed and sold, with the louder the shouting about a financial instrument, the more movement it has, this is not to be considered “getting long and loud, or getting short and shouting”.

I am not going to give more than 1 sentencereasons why I have taken a position. I have also excluded positions in which I am now effectively marketneutral due to hedging.

Longs

LGF – The only indie film library available, willing to leverage new media for revenue

RENT – Only independent source advertisers can use for tracking Video on Demand and Online Video on Demand

NSIT – Good company I have owned pretty much since they came public

SIGM – Chipset powers High Definition playback devices that allow for connection of USB hard drives and supports leading High Def codecs

GRU – Lots of traffic, that if they can monetize and keep costs very low could lead to nice cash flow

TCOW.OB – Good management, low PE, sells to growing market segment.

Shorts

IOC – Appears to have cash issues.

IIG – I don’t like companies that sell products that consumers shouldn’t buy. It catches up at some point.

Short Pairings

Long – NFI , NFI Puts, Short – NFI Preferred, stock loaned for rebate

The stock is tough to borrow, the preferred wasn’t. If the company craters as some suggest, the preferred and puts will make me money. If it doesn’t, asothers suggest, the dividend and the stock loan premium, which paid the costs of the puts and the interest on the preferred, should make me a little money. The volume around the stock created the opportunity.

There you have all of my trading positions.

Please don’t email me and ask me why. Do your own homework and make your own decisions.

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I didn’t catch this while it was happening, but thanks to Adam W for emailing me and bringing it to my attention. I know I said chemistry was better this year, but made zero mention of Steve Nash in my comments regarding chemistry.

I will just go with Adam’s Email to say it all

During yesterday’s game vs. Houston (no commment) Jim Gray said something very interesting. the summary of it was something to the affect of

JG: Dirk, I asked Mark [Cuban]and Finley if team chemistry was better without Nash, would you agree:

DN: No I don’t think so (with a puzzled look on his face)

Now if I recall when Jim Gray talked to both you and Fin there was no mention of Nash in his chemistry statement. He just asked if team chemistry was better.

I thought Jim Gray was a solid reporter (if thats what you call him) but this was ridiculous.”

Obviously I trust Adam to report accurately more than I trust Jim Gray.

What Gray did is pretty much the definition of slime reporting. I will talk to Dirk about it, but for a reporter or whatever he calls himself to misrepresent an interviewee’s comments in orderto elicit an emotional or controversial response is wrong.

ABC Sports should take immediate action against Jim Gray and suspend him from working until he apologizes to Dirk and Mavs fans.

For follow up see Art Garcia’s article http://www.dfw.com/mld/dfw/sports/11089064.htm

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Finally, a sportswriter/columnistI look forward to reading. No wasted time on trying to break scoops or reporting 9th party rumors from friends of friends that they met in a bar. There is finally a column thatI look forward to reading because the author actually looks for new information about how the game of basketball is being played in the NBA.

Someone who actually takes the time to look for information that has impact and substance rather than writing the 15 mins to deadline column.

http://proxy.espn.go.com/nba/columns/story?id=2003043

http://proxy.espn.go.com/nba/columns/story?columnist=holling…

IfI can rail on them, I have to praise the ONEI find to be my first read.

Congrats

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All of this commentary about naked shorts has been entertaining and somewhat informative. I have learned a few things, but have had far more “MC rules of investing ” reinforced. None of the comments or emails have changed my mind on how i would invest or perceive the market and its ability to regulate itself.

Here is where I stand.

1. Too many people get religious about stocks. A stock becomes personal to them. Some shareholders build
communities around these stocks and treat the stocks like family members. Falling into the ” i know he is a serial killer, but he is my uncle” category.

Its a stock people. A financial investment. Rule no 1 of any smart investor is dont get attached.
People get stocks right and wrong, we all promise not to think you are a genius in a bullmarket or an idiot when you lose money on a stock. Please dont send me emails about a stock and tell me who i should talk to, or what a terrible person I am because I do or dont like a stock you have a position in.

I typically only have positions in about 10 stocks. I dont trade in and out, I tend to stick with them until I
find out that Im wrong, or that the expectation I had has played out. On the long side, I stick to technology and stocks where I think I know them better than the market.

On the short side, I typically dont look for valuation plays. I look for companies with problems.

2. As far as Naked Shorts – Of all the emails that I got, and all the comments on the blog, there were a total of 6 companies listed as examples of stocks wronged by naked shorts.The datesthat the naked shorts
perpetrated theirmaliciousness in these examples go back to 2001.

Six examples in 4 years is not a runaway trend.

Which leads the anti – naked consortium to suggest that this lack of examples is purely a reflection of thelack of enforcement effort by the SEC. If the impact of naked shorting is significant, and its happening rampantly across the US, why arent more companies and long investors making noise on this ?

I dont know a single Wall Street brokerage that doesnt make more money when stocks go up than when stocks go down. Where is theoutrage from them ? More curious to me is that while 6 companies have been held up as companies that have been victimized by naked shorts, shouldnt there be many, many more that have seen evidence of naked shorting in their stocks and reported it to their shareholders ?

If Naked Shorting was happening as rampantly asBob O Brien and his brethren would like us to
believe,wouldnt there be more than the CEO of Overstock.com making an issue of this ?

Now Bob might argue that its happening, but the companies just arent aware of it. That the SEC and other
organizations dont do a good job of educating public companies about naked shorting, its warning signs and its impact.

I dont buy that and here is why.

To pull a page from the CSI tv shows, Naked Shorting leaves “markers” that would pose red flags in the normal course of corporate business.

Companies take shareholder votes on any number of issues. In the course of counting these votes, which across the thousands of public companies, probably happens 100k times a year, I would think that somewhere across those votes, across the last however many years, some well known company would have had to report to their shareholders and possibly the authorities that they received more votes than there were shares outstanding .

Of course the easyput down to this, is that nakedshorts dont receive notifications.So I asked myself, self I said, ifso manyshareholders have been left out of the voting process, wouldnt at least oneshareholder of a major company be aware of a corporate vote and ask why they didnt receive notification ? That might be a marker that would raise a red flag.

Which might lead to the response that a company might not make a big deal of a shareholder or two asking for the ability to vote. A rounding error that happens all the time. THe SEC hasnt educated companies, so they would ignore this warning sign.

So I asked myself again. Self I said, It occurs to me that naked shorts arent sold only in small lots to
individual investors. If naked shortselling is rampant, and the volumes far greater than we could ever imagine due to the lack of enforcement, then at some point, some big fund or shareholder , with an interest in corporate governance would have picked up a significant volume of “naked shares”, wouldnt they ? That fund is going to want to vote those shares. Somewhere along the line, if the problem were rampant (my new favorite word), a red flag would have popped up at some big public company that could have been traced to naked shorting.

Disney and HP were short favorites. How could there not be a HUGE number of naked shorts in thesestocks ? Very public corporate governance decisions, of which there have been many in heavily shorted, big market cap companies. Why not a single report from any of these companies at least referencing Naked Shorts as a governance issue ? THere is no question that if there are more votes or requests to vote than shares, thats a material issue.

Whether the SEC does or doesnt make enough of an effort to enforce the rules of Naked Shorting, a bigger
question is whether or not its enough of an issue in US Markets for them to redirect resources. I say no. Its not a problem in the USMarkets.

3. I do think that Naked Shorting could be an issue forthinly traded companies that can be traded in Canada.
There are no rules against naked shorting in Canada and companies can be targeted. As I said in my first post, this isnt a problem for well managed, well capitalized companies. Where it could be an issue is when a company is resource constrained and struggling. That bombing a company with Naked Shorts can create a governance nuisance.

I still dont think its enough to put a company out of business that wouldnt have gone out of business anyway, but it can create costs to deal with sharedholders who want to participate in governance that the company wouldnt otherwise have to deal with.

I dont know if its possible to exclude a stock from participating in Canadian markets, but it might be something small bulletin board and pink sheet companies with legit intentions to consider looking into.

4. Finally, and this has nothing to do with Naked Shorting, I wanted to reference Mamma.com. I had purchased stock in Mamma.com in hope that it could be an up and coming search engine. I thought I had done some level of due diligence. Talked to the company management. Talked to some employees who worked in sales. Read the SEC Filings. I knew that they had a checkered past and had been linked to stock promoter Irving Kott, and that their law firm still handled some of Kotts business, but the CEO, Chairman, lawyers all said that things were reformed and the company was focused on its business.

Then the company did a PIPE financing. Im not going to discuss the good or bad of PIPE financing other than to say that to me its a huge red flag and I dont want to own stock in companies that use this method of financing .

Why? Because I dont like the idea of selling in a private placement, stock for less than the market
price, and then to make matters worse, pushing the price lower with the issuance of warrants.So I sold the
stock.

I bring all of this up now, because in one of the comments in the Naked Shorting thread, a poster mentioned Lines Overseas Management of Bermuda and how there had been allegations made against them
(http://www.theroyalgazette.com/apps/pbcs.dll/article?AID=/20…)
. That rang a bell. Turns out this was the same company that Mamma.com’s current CFO used for a private placement for Mamma(http://www.sec.gov/Archives/edgar/data/839435/00010842410300…)

I said at the top that I found out some interesting things in this thread, this was probably the most interesting. I will leave you to make your own decision as to whether this connection matters or not. Im glad I sold my stock.

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