The Aleph Blog » Blog Archive » Post 1800

Post 1800

So, what do I write about at the Aleph Blog?  I write about a lot of things.  That’s a strength, and a weakness.  A weakness, because not everyone cares about a lot of things and if I shift to cover an area that is unusual, readers may not care.

It’s a strength, in the same sense that most of the best athletes could do well at a wide number of games.  I follow a wide number of themes in the financial markets and economics.  I like to think that I bring more perspective to a wide umber of issues because:

  • I have been trained in neoclassical economic theory, and I reject it.
  • I have been trained in modern portfolio theory, and I reject it.
  • I’ve worked in most areas of the financial markets, and have seen similar events happen in different markets.
  • I have quantitative skills, but I have spent a lot of time of economic history.
  • Having practiced as an actuary, I have additional skills analyzing liability structures, which are underanalyzed.

My perspective is different.  I don’t expect you to agree with me, because some of my views are “out there,” and I know that when I write it.  I sometimes write things knowing that there is no way that these will be adopted, absent major changes to society.  I write those, knowing that radical change is not impossible, and when change happens, they will need sensible guidelines.

So what have I written about?  From my categories:

Macroeconomics (898)
Stocks (814)
Bonds (770)
Portfolio Management (685)
Value Investing (463)
public policy (384)
Fed Policy (374)
Insurance (356)
Real Estate and Mortgages (354)
Structured Products and Derivatives (340)
Speculation (292)
Quantitative Methods (285)
Personal Finance (218)
Asset Allocation (172)
Book reviews (169)
Currencies (158)
Industry Rotation (133)
Blog News (123)
Ethics (117)
Accounting (113)
Pensions (109)
Banks (103)
General (100)
Academic Finance (82)
Best Articles (44)
Christianity (19)
The Rules (17)
Home Schooling (14)
Tweets (14)

I write about economics, stocks and bonds. That’s me.  I want to describe what is going on and how it affects those holding fixed claims (bonds), and variable claims (stocks).

After that, I write about portfolio management and value investing — how do we manage the assets that we own?

The next group is the guts of the market: how does government and Fed policy affect things?  How do insurance, real estate, and derivatives affect our lives?

Beyond those, I write about many things, and I appreciate that you read me.  Your time is valuable; thanks for reading me.

My Performance

My greatest fear when starting up my firm was that after having a great 10-year run with my own assets (and for an employer), that I would go cold when I started managing assets for others.  That is what has happened, with underperformance of 9%+ versus the S&P 500 over the last 16 months.  This is my worst sustained performance over the last 20 years.

I don’t think my methods are poor, nor am I planning on changing.  Every investment method goes through dry times; I have to live through this.

So what will I do?  I will persist in the strategies that have done so well for me  over the last 20 years.  I will continue to do value investing.

I don’t know that it will work, but I think it will.  Value investing is the reliable weak signal amid a lot of investment noise.

And so I act and invest.  My time is coming, and thanks for reading me.






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3 Responses to Post 1800

  1. stockbets says:

    David,
    You will do well for your clients.
    Best

  2. Keith Piccirillo says:

    You fund managers are like triathletes in your portfolio asset allocation.
    individual investors have it even worse. Unable to benefit from hedge fund edges we gauge our holdings , rebalance and try not to fall victim to recency bias and chase good performance.
    Funds like Yacktman or Artisan Value are all the rage.
    Fairholme has fared with fear.
    Luck is fickle.
    It seems the pricing models for options are always changing. Maybe the plurality are algos that wax and wane between news driven technical patterns and fundamentals like Dr. Andrew Lo hypothesizes, and constant adaptation is required.
    Keep writing. As a catharsis, it can be a very positive force.

  3. acamus says:

    Thanks for taking the time to make this blog and congrats on post 1800. I’ve been following you since the beginning of the year I think. Your blog and greenbackd are two of the first things I read in the morning.

    Value investors are having a hard time at the moment. I take some comfort in that, wherever the price goes, I still have a portfolio of value stocks, and other securities I consider to be better value, and don’t feel a need to anything unusual.

    I don’t know if I would feel better as a momentum investor. I would presumably be liquidating now, maybe because of the “death cross”, possibly at a loss and when multiples are not that high.

    Best, Al

Disclaimer


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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