Piracy as Investment; Somalia Pirates

Right Thinking On International Investing

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Piracy as a Mutual Fund

Breezing through the news these days is truly an adventure. Pirates, political crimes, punishment only for the lowly and billions in profits for the bold and righteous.
The pirates of Somalia are an interesting group of people. They are basically fishermen who, after being wholly unable to compete with large fishing vessels that catch and process and freeze their fish on-the-spot, have taken to commandeering vessels worth hundreds of millions of dollars along with their equally valuable cargo. They treat their captives very well and thus create a feeling of honor and a respect for life. The owner/operators of the vessels drop millions of cash dollars onto them, sometimes in burlap bags by helicopter, and they then release the vessel, the cargo and the well-fed crew. Who in these times could not root for such an underdog?
Sure, you could call them desperate, savage, self-serving and as having a complete disregard for law. But, wasn’t the last eight years here in our country full of the exact same behavior? Bush-Cheney have been much more savage and have flaunted their executive status in the very face of law and of the people they are supposed to serve. And, the Bush savages have killed hundreds of thousands, if not millions and continue to do so even after having been told repeatedly by their constituency that they need to stop the killing of innocent men, women and children. The Somali pirates have killed none so far. They’re businessmen. Serious businessmen. Something we need more of.
And, like the pirates, the Bush family has cashed in big time with the Carlyle companies and their participation in the wars for profit. Cheney too still holds his Halliburton stock and Condi has a ship named after her which flies the Chevron flag in its fleet. And Rumsfeld made over $6 milion in Tamaflu stock during the avian flu scare as he used to run that company. No sour grapes here. I realize the rules change and there can be no doubt about the last eight years as rule-changing extraordinaire. What I do object to is changing of rules and the exclusion of others-little guys like me-who cannot play at the same table. New rules are customary in America as gobs of new laws are thrown at us each month and every year. All that is fine. It is our system after all and I want in!
Looks like the pirates have a good business plan and I think we should consider investing in their efforts. After all, I need to retire some day too. So what if Stanford doesn’t call me as they do Condi. So what if I don’t own anything and have no wood to chop. So what if I don’t have friends so devoted to me that if shoot them in the face with a shotgun, they actually apologize to me. I am equally devoted but to the new pirate business venture. This could be bigger than the bogus gold finds floated by the Canadian markets some time back. And pirates have real equity in the cargo and booty they loot.
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Yes, they are a start-up business and it could get shaky for them. But, they have no taxes to pay as they have no government. They have an endless supply of cargo ships and oil tankers to process for cash and they will always get paid. No doubt. With their earnings they have been responsible enough to create a wealth of new materials and a better life for themselves and for their fellow villagers. New generators, new schools, luxury cars and a lot more food and finer quality food at that. Mostly imported from Dubai, that home of truly unfettered free trade. What is the capital of Dubai? Friedmanville, I should think.
Unlike a lot of start-up companies piracy only requires a small capital investment usually entailing a small wooden boat-a leftover from the failed fishing fleet-an AK-47 which runs around $20.00 in their area and a lean and mean attitude of which there is no shortage of after having been starving and destitute for years. So, we have the perfect investment vehicle. What we need now is for the pirates to go public and get listed on the exchange along with the other equally quasi-criminal outfits that already trade daily under names like Halliburton, Exxon and Vanguard prison services. They would be a really big hit on the already tainted exchanges in Wall Street. And what’s more, they do not need to carry insurance as there is no healthcare system in Somalia. No insurances are necessary as each pirate undertakes his work knowing the risk and weighing it against the reward. Low overhead;high profit. Perfect! Giving them a ticker symbol on our exchange, we could legitimize their efforts and that would allow us to invest and profit from their incredibly bold and exciting new business plan. Is this not the utmost in rugged individualism that we have seen since colonial America pried free the clammy splay-fingered British hands that were raking off profits from us some years ago?
Also, the pirates have revived commerce in Somalia. So much so that the people of the villages actually come to the shores to watch a newly commandeered vessel drop anchor while cheering and setting up booths to serve cooked foods imported for their pirate heroes and their temporary captives. When was the last time you saw Americans at an oil or car port cheering the arrival of new energy or shiny vehicles. No sir, these pirates are really onto something. So sure are the people of Somalia in the investment that they readily extend credit to the pirates knowing they will be very well paid when, uh, their ship comes in.
This could really fuel the next bubble for us to ride for a decade, maybe even more! After all, they are pirating vessels with tanks and oil. I don’t know anyone who owns and ships tanks and weapons except for governments and who cares if some government has to pay an upcharge for their bullets? We know they are going to use them to a bad end anyway. I don’t know anyone who has so much oil they need a supertanker to cart it around. I did know a greek ship owner once but he had no real use for me. Neither did I find any application for him.

Yes, I think in no uncertain terms that we should embrace the pirates and lead them to drink at our well in Wall Street. I want in on that! After all, there are not a lot of industries that have such a bright future right now and investing has become a mine field of certain death. At least with the pirates, we know exactly where they stand, what their business plan entails and there are no huge accounting firms to spin the details. Pretty honest approach to industry and investing for a refreshing change.
And, I like the management style of the pirates. They are tough to be sure but they are fair. Treating the crew of a waylaid vessel by feeding them imported foods and liquors is simply the most brilliant stroke of marketing I have seen in a long time. Perhaps we should have tried such an approach with the Iraqis or Afghans. They might have said, at least we are safe and full of fine food and tipsy until such time as this gets sorted out. In that way, the pirates are a team you can root for without having to feel conflicted that what they are doing is actually hurting anyone.
After all, the ships they have seized are either owned by a government or an oil company. So, what’s the big deal? Who really cares about a government? They can just requisition a new vessel or $10-20 million dollars in ransom and simply get their ship back and never miss a beat in their routine except perhaps for having to call their client and explain why they have a late delivery. The same goes for the oil companies. They can simply replace the vessel cargo load with another or farm it out to a private firm for a delivery. The oil doesn’t go bad so there is no rush nor is there any loss to speak of. What a wonderful business plan these pirates have! I am so impressed I want to call Warren Buffet and ask him to see if he can get in on the ground floor right away in the hopes that my BK-A stock can get back to a more palatable price range. Then I can look to sell those silly American shares and see about investing directly in piracy. I am thinking perhaps a piracy mutual fund would be the best approach. In this way we can spread the risk around-what little there is-and then see which pirate firm rises to the top and go from there. That is the American way and I think this is no time to get squeamish about money and investing.
The pirate firm that wins and leads this new industry will most likely be the one that treats the crew well fostering good public relations and asks a reasonable ransom for the vessel and cargo. Reinvesting in the pirate fleet is not necessary as there are thousands of idled fishing boats available for pirate use and bigger more sophisticated boats are simply not conducive to good piracy. The radar profile of a wooden fishing boat with a few guys and a handful of weapons is really small and a distinct advantage for the pirate-worker. And there is simply no need for a union, no dues, no overhead to speak of, no reporting of monies or worries about bank dealings in this bad economy. No one is going to call in a note and crush your business nor is there anyone else to compete with. And best of all, this business plan does not run the risk of being successful and being taken over by a large conglomerate as there simply is no huge firm like say ‘Pirates-R-Us’ that is lying in wait to make a hostile move. It is that new an industry!
The Somali coast is a beautiful place and it might be well worth the consideration that it would serve as a resort getaway some time in the future after the pirates have had a chance to build a capital base, as did Dubai, and function as a free zone for gambling building casinos and beachfront luxury hotels without the imperial entanglements normally found in a western country. Just as Dubai did. Maybe they can make man-made pirate islands of imported sand so we can see the expressions of their success too. People like to feel they are in good hands and associating with success.

In fact, the pirates have been open about Dubai being their trading partner. In much the same way as Halliburton, Dubai functions as an entity that can and will get you whatever you want albeit at an added value price. But that is ok because the extra cost cover the no-questions-asked part of the arrangement. Just like Halliburton!
What Somali pirates really need first though, as we have seen time and again, is good legal counsel. Retaining a large and well-positioned law firm is the first step to making sure you solidify your standing in industry and with their assistance public relations programs can be implemented changing their image from that of pirate to, say, international trade consulting and holding. After all, we have seen how effective good public relations really are when we use soft words for tough action and that anything can be done as long as it is done in a civilized sense or, at least, wrapped in a flag of patriotic warmness smoothing out the rough edges and showing a more humane side to these efforts. Perhaps a hearts and mind campaign would work. Maybe the pirate flag would have a picture of a starving child, an emaciated dog or, oh! I know! That Vanity Fair photo of the dying child being watched over by a hungry vulture. In this way the world would see the pirates as a sort of Robin Hood rather than a self-serving group like say, American politicians.
Yep, no doubt about it. As long as the pirates don’t kill anyone I am rooting for them as the home team! Go Pirates!!