The Aleph Blog » Blog Archive » Apology on Irene

Apology on Irene

I was too bold in my prior statements on Hurricane Irene.  Though ordinarily forecast errors persist, as of early Thursday, the errors have straightened out and the path of the storm is clear.  That said, I think the risk of large insured losses are still not high.  The picture above is for 39+ mph winds over the next five days.  That won’t do much to most of the east coast.  Here, look at a graph of Hurricane force winds:

Not so much, huh?  There are a lot of insurers and reinsurers worth buying in this environment.

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6 Responses to Apology on Irene

  1. paolo.mcpaki says:


    A suggestion: assuming you know something about insurance, leave the intersection of meteorology and insurance to the big boys.

    • Thanks, will consider, though hurricane estimates don’t have a great track record, as far as I’ve seen.

    • Keith says:


      I am interested in your comment given that this is an investment blog. I own about 25 stocks, and I am not an expert or “big boy” in any of the areas that these companies exist in. For example, I own oil stocks because I think that the financial community underestimates the future value of oil. However, I am not in any way an expert on the price of oil.

      In order to invest I must make judgments where I think the “expert” opinion is wrong. Otherwise, I am just following the herd, and its tough for a value investor to make money that way.

      I perceived that David was making a judgment, and that is what investors do. What is your opinion on this?

      By the way, when I lived in the midwestern US, there were often snowstorm predictions on the news. I found that the best prediction that I could make was to take the predicted snowfall and divide by 3. Hence, if they were forecasting 12 inches of snow, then I assumed 4 inches was about right.

  2. FrankM says:

    At risk of piling on Paolo, that was an unfair comment that he made. And ultimately David was right, as buying on Friday resulted in a nice pop Monday.


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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