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Archive for November 22nd, 2012

Stuffing & Thanksgiving

Thursday, November 22nd, 2012

Some of my readers might know that one of my hobbies is cooking.  Today I cooked a 24-pound Turkey, 4-pounds of Roast Beef, made gravies for both, mashed potatoes, mulled apple cider, toffee and stuffing, for a gathering of 25 at my house, who brought other foods (salads, some pies).  My kids made pies, Watergate salad, and fudge.  My wife got the day off, which is actually pretty normal at our house, because homeschooling the remaining four kids takes up her time.  The kids and I cook.

One family at the meal has given up on wheat, because of gluten.  They don’t have the celiac disease, but they say they feel better without it.  The pie crusts, aside from one brave attempt to use rice flour, were the only wheat in the meal. (Note: gluten makes a lot of foods possible.  It holds things together.)

But that gave me a challenge: wheat-free stuffing.  Now, my wife has a rule that she employs for when company visits: “Never serve anything that you have never tried before.”  I don’t follow that rule.  I have a different rule: “Taste. Adjust. Repeat as needed.”  I have enough tricks up my sleeve, that if something is not working, I can usually fix it.  Cooking is fairly intuitive for me; I can usually figure out what is needed to make the dish sing.

But I had never run into a stuffing recipe that did not contain *some* wheat.  After all, most cornbread recipes contain wheat.  But when I saw this recipe, and thought it through, I realized that I could create a non-wheat stuffing recipe that would taste very similar to a traditional Thanksgiving stuffing.  So here’s the recipe:


  • 1 cup (250 ml) butter
  • 2 cups (500 ml) cornmeal
  • 6 cups (750 ml) milk
  • 4 large eggs
  • 2 tsp (30 ml) salt
  • 1 tsp (15 ml) sugar
  • 2 tsp (30 ml) baking powder
  • 2 medium onions
  • 2 stalks of celery
  • 6 chicken bouillon cubes
  • 1 tbl (45 ml) parsley (dried is fine for the spices)
  • 1 tsp (15 ml) sage
  • 1 tsp (15 ml) rosemary
  • 1 tsp (15 ml) thyme
  • butter to grease casserole dish


  1. Preheat oven to 350°F (175°C)
  2. Melt butter in a pot on medium heat.
  3. Chop celery & onion and add to the pot.  Cook until softened.
  4. Add cornmeal. Stir mixture to warm up the cornmeal.
  5. Add milk and bouillon cubes. Stir until mixture has thickened.
  6. Add parsley, sage, rosemary and thyme.
  7. Beat eggs. Beat in salt, sugar, and baking powder.
  8. Slowly add some of the thickened cornmeal mixture to the egg mixture while mixing to temper the eggs.  (Note: Do not add the egg mixture to the cornmeal. Some of the eggs will cook on impact resulting in streaks of cooked eggs and a heavier stuffing.)
  9. Stir the egg mixture into the rest of the cornmeal.
  10. Pour the mixture into a greased 9×13 inch casserole dish
  11. Bake at 350°F (175°C) for 30 minutes or until the top has browned

A fusion of two dishes, never tried before, and it was a hit.  Everyone liked it. Note that the amounts on the spices are approximations — I added the spices by hand, not spoon. “Taste. Adjust. Repeat as needed.”

So, for those that want to have stuffing, but can’t have wheat, this could be a good alternative.


There’s something more to say this evening.  My wife came to me after talking with a neighbor who is having difficulties at work because of a tough boss.  In my own life, I have had my share of good and bad bosses, so I can sympathize.

In this environment, the first thing is to be thankful that you have a job.  Second, if you have a good boss, be very thankful.  A good boss is often worth more than a higher salary.  I learned more from my good bosses than those that were negligent.

And, if you are a boss, consider how you can better teach and motivate your subordinates.  I was working for the guy who I regard as my “best boss,” when he came in and said “Sorry, David, you drew the short straw, and now you have to oversee YYY.”  YYY was a problem employee who was quite bright as a programmer.  He was slow to get work done.  I sensed that he was bored.  Being more of a programmer at that time, I had some sympathy for him — eventually, my thought was, “How can I make his work more interesting?”  The commercial internet was still waiting to be born, and so I suggested the concept of setting up a “bulletin board” that could be accessed via dialup for our pension clients to use.

That caught his attention, and not only did he throw himself into that project, but he did all of his more “boring” projects well also.

I’m not good with people, but I did turn around one problem employee.

Back to my main point: if you have a job be grateful, but if you have a good boss, be more grateful.

From the Merkel house: blessings to all of my readers, not only now, but always and ever.

On Hedge Funds

Thursday, November 22nd, 2012

I don’t think hedge funds are an optimal way to manage assets.  Here are some of my reasons:

  • The fees are too high.  Why pay 2% of assets, and give up 20% of the profits?
  • Hedge funds, aside from Commodity Trading Advisers and Global Macro funds, tend to be correlated, yield-seeking, and volatility-averse.  Why pay up for correlated performance?
  • The statistics behind hedge fund marketing suffer from backfill bias, survivor bias, and a few other biases.

Actual returns from hedge funds trail buy-and-hold returns by a significant margin.  Investors in hedge funds are poor timers of investment.  Though past results do not indicate future returns, investors act like that.  No one will add money to a losing fund, even if that is the point where it might start to do better.

To me it seems that we are running into the limits of arbitrage.  Shorting is unnatural, and so are many derivatives.  How much do you have to pay up to get someone else to take the other side of the trade?

Only so much stock/bonds, etc., can be lent out and shorted with no additional cost.  Beyond that, shorts have to pay up, and that crimps their profits.

This is one big reason why I am happy to be a long-only value investor.  I only have to focus of businesses making money versus their current share price.  I don’t have to deal with the games surrounding shorting.  That simplifies my decision making considerably.


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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