The Aleph Blog » Blog Archive » Changes for David — II

Changes for David — II

Well, it has been a month since the demise of Finacorp.  I don’t know for sure why the company died, but I suspect that it overexpanded, and could not support its larger size.

As for me, I have been mulling over the possibilities and have settled on two main courses of action:

  • Setting up my own asset management shop
  • Setting up my own consulting business on investment, business, and insurance matters

I have left aside the idea of outside employment for now, whether in the private sector or the government.  I have also shelved the idea of writing a book.  I am still reluctant to write a newsletter, because of my experiences in writing about individual stocks.  I was right more often than I was wrong, but when I was wrong the response from readers was disproportionate.

Asset Management

With asset management, I have a great track record with my own portfolio going back to 8/31/2000, complete with all of the brokerage statements to back it up, and a consistent operating philosophy.  I need to get a number of legal matters straightened away before I can start up, though I would consider plugging in to some other firm to provide the   infrastructure that I need.  If you have an interest in that, let me know.  In the early phase, minimum investment amounts will be lower.  Not sure on where that will be yet.

I will likely offer my strategy in two forms: long only, and market-neutral.  Between the two funds, you can express your own bullishness, while I hopefully continue to outperform the S&P 500.

As it is, I have a few nibbles as far as larger investors go.  If any of them hit, that will propel me forward faster.


With consulting, I have a few clients already.  I call my consulting applying math to complex business and investing problems.  As it is, when I worked for Finacorp, many of my projects were consulting for clients, providing tailored research to meet a need.

In the past that has involved:

  • Analyzing complex securities to ascertain value, or lack thereof, whether fixed income, equity, or whatever.  I am happy as a clam when digging through complex legal documents.  (I know, that is perverse.)
  • Analyzing portfolios of equities or debts in order to improve performance.
  • Being a second opinion on complex investment questions.  I can provide the contrary opinion on investments that are moving against you.
  • Complex insurance questions.  I am a life actuary, and more than able to analyze tough questions there.

The future could involve:

  • For small municipalities: do you need someone on your side?  I am not able to be fooled by Wall Street investment banks that will pitch you all manner of complex products.  I will tell you he truth, and be on your side in complex negotiations.
  • The same applies to DB plans and endowments.  Is your consultant giving you a bum steer?  Are you wondering if you should fire him?  I can help with that.
  • And more.  I have many skills with data mining, setting compensation schedules for salesmen, and other complex business questions.
  • But most controversial: you can hire me on the question of whether you need a consultant or not.  Most of the time, the answer is no, unless you have a small staff with no experience in the area in question.  Most of the consultants that I dealt with in corporate America were less competent than the middle management of the firms engaging the consultants.  Would that managements would trust their middle managers.

Look, I shoot straight.  If I can’t solve a business problem, I will refuse it.  If I try and find I cannot get to a solution, I will not take payment.  My rule is that I don’t get paid until my client is happy with my work.  I never want to live with negative word of mouth; I want a bevy of clients very happy with my consulting work.  That fits with my work attitude, because I look for the success of my clients first.

That is what I am up to.  I am open to other ideas, feel free to e-mail me.  Please understand that I get a flood of e-mail everyday.  I read it all, but I can’t respond to all of it.

Thanks to all of my readers.  You make my blog better.



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David Merkel is an investment professional, and like every investment professional, he makes mistakes. David encourages you to do your own independent "due diligence" on any idea that he talks about, because he could be wrong. Nothing written here, at RealMoney, Wall Street All-Stars, or anywhere else David may write is an invitation to buy or sell any particular security; at most, David is handing out educated guesses as to what the markets may do. David is fond of saying, "The markets always find a new way to make a fool out of you," and so he encourages caution in investing. Risk control wins the game in the long run, not bold moves. Even the best strategies of the past fail, sometimes spectacularly, when you least expect it. David is not immune to that, so please understand that any past success of his will be probably be followed by failures.

Also, though David runs Aleph Investments, LLC, this blog is not a part of that business. This blog exists to educate investors, and give something back. It is not intended as advertisement for Aleph Investments; David is not soliciting business through it. When David, or a client of David's has an interest in a security mentioned, full disclosure will be given, as has been past practice for all that David does on the web. Disclosure is the breakfast of champions.

Additionally, David may occasionally write about accounting, actuarial, insurance, and tax topics, but nothing written here, at RealMoney, or anywhere else is meant to be formal "advice" in those areas. Consult a reputable professional in those areas to get personal, tailored advice that meets the specialized needs that David can have no knowledge of.

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