Photo Credit: Mary Merkel || I am busy all of the time

Photo Credit: Mary Merkel || I am busy all of the time

Every 100 posts or so, every year or so, I take a small break from covering the markets to give a few thoughts of mine that are less related to the markets.  I have not done that recently.  I skipped doing post 2700, and also a post for my eighth blogoversary.  I also slowed down my posting generally.  Today I would like to explain why that was so.

I carry a lot of responsibility outside of my business, family, and writing.  The last two years had me taking on more responsibility at my congregation because:

  • Our pastor left, and I helped lead the search for a new one, who started with us this past June.
  • When there is no pastor, who takes care of pastoral needs?  Those don’t go away.  Nor do the needs of a mission church that we oversee.  I picked up the pieces where I could, including visitation of a sick older friend who eventually died.
  • I also arranged for 80 weeks of temporary preaching.
  • Together with my fellow elders, we agreed to purchase a building adequate to hold our congregation, and end our situation of renting a school, as we had for the last 27 years.  We did that before we called a pastor.  I took care of all of the financial aspects of the decision, which made life easy for my fellow elders.  That transaction closed last week; in the picture above, that’s me standing at the back of the building in Burtonsville, Maryland.  (My congregational website is listed on the homepage — if you’re in the area on a Sunday, you can drop in for worship.  I’m the one up front leading the singing on most days.)
  • We are in the midst of selling a smaller building that we own, to help fund the purchase of the larger building.

There’s more than this, as I aided our Presbyterial and Denominational efforts, and aided the Baltimore CFA Institute, but those are normal duties for me.

Add in my two seniors in high school this fiscal year, and that makes me a little busier as I teach both of them economics, and one of them Calculus.  Both are also good athletes, and their schedules take up time.  Next year, home schooling gets quieter, as we will only have one left at home, and she is a quiet one.

During the busy time, something had to sag, and the two things that sagged were blogging, and marketing for my firm.  I did not let asset management sag, because I owe a debt of service to existing clients.  I dd not put much effort during the period into obtaining new clients.  I felt that was the right way to do things — I don’t have to grow, but I do have to serve.  Also, I don’t have to blog, but I like doing it, and never wanted to stop completely.

At this point, things have freed up enough, that more regular blogging  can resume, together with restarting marketing.  As for future topics, I do have a few more things to write on personal finance, and I hope to write out more book reviews, and the pieces in “the school of money” and “simple stuff” series, while still taking up intriguing topics where I have opportunity.

As always, thanks for reading me, and now you know how busy my life can be.

I love books.  I read a lot of them, especially those on investing, finance, and economics.  I could argue that the genre is tired, but there are a lot of people trying to jazz it up, sometimes with more success, and sometimes with less.  Those who do it different have a strong probability of bombing it, but occasionally a new approach is brilliant.

If you’re new to Aleph Blog, you might not know that about one in ten posts is a book review.  That wasn’t what I intended when I started this project 8.6 years ago.  Actually, I’m not sure what I intended, this has ended up bigger and more involved than I ever imagined.

If you have read my book reviews, you might note several things that are different:

  • I read in full almost all of the books that I review.  When I don’t, I disclose it.
  • I don’t just review new books.  I review older books when it makes sense to me.
  • I don’t just review books that I like, but those that I don’t like also.
  • I also try to identify who might be the right sort of person for a given book — some people don’t like math, some books are too simple, some are too hard, etc.

I usually cross-post my reviews at  For the types of the books that I review, I think I have a pretty good reviewer ranking at Amazon.  That said, I know it would be a lot higher if I did four things.

  • Stop mixing in my own experiences or knowledge on a given topic, which sometimes is equal to that of the author, and occasionally, exceeds the knowledge of the author.  Book reviews aren’t supposed to be about me.  I get it, and I am trying to reduce that.
  • Review only new books, and get them done as close as possible to the release date of the book.  There are many book reviews that are in my opinion lousy, but they got done first, and people voted them up, giving a review that is the equivalent of a “smiley face” button a parasitic life off of the book.
  • Write shorter reviews.
  • Stop doing critical reviews.  Only post happy stuff — these authors hail from Lake Wobegon, and are all above average.

I want to amplify that last point.  Books have natural defenders — certainly the author and his friends, but also if it is a book on a cultic topic, such as gold, Bitcoin, various schools of economic prejudice thought, doomsday economics, THE ONE WAY TO INVEST, etc., etc., etc., you get the mindless zombies partisans defending the cult.  They will vote you down, and it doesn’t take many reviews where you have 20% helpful votes, even if it is the best critical review, before your rating sinks dramatically.

I’m not going to stop writing critical reviews.  I’d rather be less popular and known, than sacrifice credibility, even if I look like a fool at times.   (Yes, that is somewhat contradictory.)  That’s just a price of cross-posting at Amazon, and I will keep doing it to benefit readers generally, whether they like it or not.

And Now For Something Completely Different

On an unrelated note, one interesting thing that has developed over time are all of the independent authors and small publishers sending me books in the mail.  Some are preceded by an email for permission, others show up like lost puppies.

They are interesting books, and I don’t review all of them, because many of them don’t work — they are just too quirky, and probably needed a better editor, or, a publisher who would do the author a favor and tell him, “No.”

Second unrelated note: the hardest books for me are those where I know the author, and I end up not being crazy about the book.  Usually, I quietly spike those reviews, and send a note to my friend/acquaintance as to why he won’t see a review out of me.  I do have a heart, after all, and value my relationships more than “telling it like it is,” unless it is egregious.

All for now, as always thanks for reading.

This morning, I looked at the fall in the Chinese stock market, and I said to myself, “It’s been a long journey since the last crash.” After that, I wrote a brief piece at RealMoney, and another at what was then the new Aleph Blog, which was republished and promoted at Seeking Alpha, and got featured at a few news outlets.  It gave my blog an early jolt of prominence. I was surprised at all of the early attention. That said, it encouraged me to keep going, and eventually led me away from RealMoney, and into my present work of managing money for upper middle class individuals and small institutions.

I try to write material that will last, even though this is only blogging.  Looking at the piece on the last China crash made me think… what pieces of the past (pre-2015) still get readers?  So, I stumbled across a way to answer that at, and thought that the array of articles still getting readers was interesting.  The tail is very long on my blog, with 2725 articles so far, with an average word length of around 800.  Anyway, have a look at the top 20 articles written before 2015 that are still getting read now:

20. Got Cash?

Though I write about personal finance, it’s not my strongest suit.  Nonetheless, when I wanted to write some articles about personal finance for average people, I realized I needed to limit myself mostly to cash management.  A few of the articles in the new series “The School of Money,” should be good in that regard.

19. Book Review: Best Practices for Equity Research Analysts

I write a lot of book reviews.  I have some coming up.  I was surprised that on this specialized got so many hits after four years.

18. On the Structure of Berkshire Hathaway, Part 2, the Harney Investment Trust

This is a controversial piece on the most secretive aspects of what Buffett does in investing.  I have tried to get people from the media to pick up this story, but no one wants to touch it.  I think I am one of the few admirers of Buffett willing to be critical… but so what?  Hasn’t worked on this story.

17. Learning from the Past, Part 1

This short series goes through my worst investing mistakes.  It’s almost finished.  I have one or two more articles to write on the topic.  This one covers my early days, where I made a lot of rookie errors.

16. On Trading Illiquid Stocks

I describe some of my trading techniques that I use to fight back against the high frequency traders.

15. De Minimus Laws

Here I do a post aiding all of my competitors, giving the relevant references to the de minimus laws for registered investment advisers in all 50 states, plus DC and Puerto Rico.  Note that I got my home state of Maryland wrong, and I corrected it later.

14. The Good ETF, Part 2 (sort of)

Reprises an article of mine explaining what makes for exchange-traded products that are good for investors.

13. On Bond Risks in the Short-Run

A piece giving advice on institutional bond management.  Kinda surprised this one still gets read…

12. Should Jim Cramer Sell TheStreet or Quit CNBC?

Cramer generates controversy, and thus pageviews as well.  As an aside, is down another 20% since I wrote that.  Still, the piece had my insights from brief discussions that I had with Cramer, way back when.

11. An Internship at a Hedge Fund

Basic advice to a young man starting a new job at a hedge fund.

10. Q&A with Guy Spier of Aquamarine Capital

I have always enjoyed the times where I have had the opportunity to interact with the authors of the books that I have gotten to review.  Guy Spier was a particularly interesting and nice guy to interact with.

9. The Good ETF

This is the predecessor piece to the one rated #14 on this list.  Brief, but gets the points across on what the best exchange traded products are like.  It was written in 2009.

8. We Eat Dollar Weighted Returns — III

I’ve been banging this drum for some time, and the last one in this series was quite popular also.  This article highlighted how much average investors lose relative to buy-and-hold investors in the S&P 500 Spider [SPY].  Really kinda sad, underperforming by ~7%/year.

7. Portfolio Rule Seven

Now, why does my rebalancing trade rule get more play than any of my other rules?  I don’t know.

6. The US is not Japan, but there are some Similarities

I had forgotten that I had written this one in 2011.  Why does it still get hits?  In it I argue that the US will get out of its difficulties more easily than Japan.  (Maybe this gets read in Japan?)

5. Actuaries Versus Quants

My contention is that Actuaries are underrated relative to Quantitative Analysts, and have a lot to offer the financial markets, should the Actuaries ever get their act together.

4. Can the “Permanent Portfolio” Work Today?

Does it still make sense to split your portfolio into equal proportions of stocks, long Treasuries, T-bills, and gold?!  Maybe.

3. The Venn Diagram Method for Greatest Common Factors and Least Common Multiples

I was shocked at this one, written in 2008.  This post explains a math concept in simple visual terms for teachers to explain greatest common factors and least common multiples.

And now for the last three:

2. On Berkshire Hathaway and Asbestos

1. On the Structure of Berkshire Hathaway

0. Understanding Insurance Float (oops, miscounted when I started… so much for being good at math 😉 )

Should it be any surprise that the last three, the most popular, are on Buffett, Berkshire Hathaway and Insurance?  People go nuts over Buffett!

The one novel thing I bring to table here is my understanding of the insurance aspects of BRK.  Each of the three deal with that topic in a detailed way.  Aleph Blog is pretty unique on that topic; who else has written in detail about the insurance company-driven holding company structure?  Aside from that, many don’t get how critical BRK is to covering asbestos claims, and don’t get the economics of insurance float.  Many think float is magic, when it can lead to an amplification of losses, as well as an intensification of gains.

These last three pieces got really popular in March, around the time that BRK released its 2015 earnings, even though they were one year old.

Anyway, I hope you found this interesting… I was surprised at what gets read after time goes by.  One final note: for every time the most popular pre-2015 article was read, articles that would have been rated #22 and beyond got read 10 times… and thus the long tail.  It’s nice to write for the long term. 🙂

Full disclosure: long BRK/B for myself and clients

It is difficult to make predictions, especially about the future.

Attributed to many people

Susan Weiner has an interesting piece as her blog on Investment Writing called Are financial predictions too risky for investment commentary writers?  I would say the answer is:

  • Yes, and
  • No, because you can’t avoid them if you are writing about investing

Why You Should Avoid Making Predictions

My leading reason for avoiding making predictions is that when you are wrong, and someone loses a lot of money, he gets really annoyed.  I can’t say that I blame them much.

Now, I might do it more if I got praise equal to the amount of annoyance.  But my experience from my RealMoney days was for every bit of praise that I would get from a correct prediction, I would get 10 bits of criticism for one that I got wrong.  That’s not much different in a way from reviews you read on the web for restaurants, hotels, service companies, etc., because people get greater motivation to write when bad service is delivered rather than good.

Why You Can’t Avoid Making Predictions

We can talk about the past, present, and the future.  We know the past reasonably well.  The present is fuzzy. We know the future not at all — we can only make guesses.  Those guesses might be educated guesses, but they are still guesses.

You could spend all your time writing about the past, but readers would ask how that can benefit them now.  Logically, they could ask “If this past situation had the result you mentioned, can I expect the same thing in this current situation that seems a lot like it?”  It’s a fair question, and if you don’t answer it, you might find that your readers go elsewhere.  They’d rather risk being burned than not get an opinion on some issue that they care about.

You could just report on the present.  Some of that is useful, like hearing color commentary at a sports game.  The same set of questions could come to you, like: “The market has been hitting new highs.  Does that mean it will hit higher highs, or is it time to take some risk assets off of the table?”  Another fair question, and readers would like an opinion.

As an aside, when I began studying nonlinear modeling, it was noted by many that nonlinear models don’t predict well.  One academic decided to take the bull by the horns, and wrote a paper that was entitled something like, “If Nonlinear Models Can’t Predict Well, Why Should We Bother With Them?”  One possible answer would be that most models don’t predict well, but that’s too discouraging for most readers.

The thing is, readers have their concerns about the future, and they want advice.  Many would rather have a false certainty than a nuanced set of possibilities.  We can’t do anything for them — they are fodder for the charlatans.

My answer for my writing is to try to be humble about the possibilities, and write things that explain thought processes rather than conclusions.

“Give a man a fish and he eats for a day.  Teach a man to fish and he eats for a lifetime.”

— Old Proverb

The trouble is, we can’t even give people easy investment ideas that will always work.  We can try to explain how to think about the question, and the possible scenarios that could result, and how likely they are.  Giving people the building blocks of investment knowledge is more valuable than handing out tips.  The building blocks have been tested, and work most of the time, but they take work to deploy.  Tips are uncertain, but neophytes love them, partly because they take almost no effort to implement.

Finally, be happy about whatever audience you get.  Largely, you will get the audience you deserve, and the criticism that goes along with it.  Just be careful, and take a page from Hippocrates that resembles the concept of margin of safety:

First do no harm.

Here is the second part of my interview on RT Boom/Bust. It was recorded while the FOMC was releasing its statement, so I had no idea at that time as to what the announcement had been.

The interview covers my view of Apple (not one of my strong points), Fed Policy, and what should value investors do in this low interest rate environment. Note that not all of my opinions are strong ones, and that in my opinion is a good thing. Often the best opinions are not controversial.

If you are interested in these topics, or listening to me, then please enjoy the above video. My segment is about seven minutes long.

1. Recently I appeared on RT Boom/Bust again.  The interview lasts 6+ minutes.  Erin Ade and I discussed:

  • Who benefits from lower energy prices.
  • The No-Lose Line for owning bonds,
  • Whether you are compensated for inflation risks in long bonds
  • How much an average person should invest in stocks with any assets that they have after buying their own house.
  • The value of economics, or lack thereof, to investors today.

2. Also, I did an “expert interview” for  I answered the following questions:

  • What is your most basic advice on investing?
  • What can you tell young people to help them stay financially secure in their futures?
  • How can a potential investor go about finding the best investment professional to work with for his or her individual needs?
  • Please explain how being a good investor and a good businessman go hand in hand.
  • What is your favorite part of your job?
  • You clearly do a lot of reading, as seen from your book reviews. What other genres of books do you enjoy?

3. Finally, Aleph Blog was featured in a list of the Top 100 Insurance Blogs at number 29.  I find it interesting because my blog has maybe 18% of posts on insurance topics.  That said, I have a distinctive voice on insurance, because I will talk about consumer issues, and what are companies that might be worth owning.

Enjoy the overly long infographic.

Top 100 Insurance BlogsAn infographic by the team at Rebates zone


Photo Credit: .SilentMode || Doubts that the deal is legitimate?

Photo Credit: .SilentMode || Doubts that the deal is legitimate?

I’ve written a lot about financial fraud at Aleph Blog.  I try to encourage people to be skeptical, because it is genuinely rare when a deal is exceptionally good for an average person.  Most of the time in life, you are doing pretty well if you are getting a fair deal, particularly when it comes to financial matters.  Most people selling financial products know more about the product than the prospective buyer.

Thus, Aleph Blog has written about a wide number of deals that are bad, and those that are outright fraudulent.  (At the end of this article, there will be a sample of articles that I have written.)  Not that anyone appointed me, but I regard this as one of my sub-missions, in writing this blog.  Cleaning up the investment world should be a goal of many legitimate investors, because the cleaner things are, the better the culture of trust will be for legitimate financial products.

Now, Aleph Blog does this service on two bases: free and paid.  Free is for the simple stuff.  If you write an e-mail to me asking “Is this legit?” and it is simple enough for me to give a quick answer through a blog post, I will likely (but not certainly) write a post on it, or point you to one I have written.  I may even answer the companion question, “Is it a smart thing to do?”  Most of what I do here will fall into the free category.

The complex stuff is another matter.  I have done analyses like these for prior employers, and on a freelance basis for wealthy individuals and corporations.  Examples have included:

  • Analyzing whether the Permanent Portfolio idea works or not (and other investing theory questions).
  • Analyzing a complex tax avoidance deal that involved insurance, securitization, and other factors.
  • Analyzing whether a private business deal looks legitimate.
  • Analyzing whether a securitization deal looks legitimate.
  • Analyzing complex bonds or other securities for value.
  • Giving a second opinion on an investment question.
  • Giving a second opinion on a new investment product.
  • Giving a second opinion on a financial plan.

I like an occasional complex project because it keeps my skills sharp.  I am a good financial modeler, and though I did not go to the finals the last two years in the Modeloff competition, I placed well in the first round the last two years, and in the second round in 2013 was in the top half, and though I qualified, this year I could not compete in the second round due to a schedule conflict (presbytery meeting).

If a project does not fit my expertise, I will turn it down.  Why waste your time and mine?  If I don’t have slack time, I will turn it down — my investment clients come first.  But if you have an interesting project that you think might fit me, email me, and let’s talk.  I am willing to sign confidentiality agreements, and not publish the results if need be.

Beyond that, let’s make the financial world better, and eliminate as many scams as we can.


Hey, thanks for reading… 😉 and play it safe, please.


On Thursday, November 23rd, I was recorded to be on RT Boom/Bust. The first half of it played that day, and the video of it is below:

We covered a lot of ground in a short amount of time.  Here are the topics, with articles of mine that flesh out my thoughts in more detail (if any):

The second half of it played today on October 31st, and the video of it is below:

Here we talked about the following:

I really appreciated being on the show.  Hope you enjoy the videos.  Thinking fast is a challenge, and you can often see me trying to gather my thoughts.

My thanks to Erin, the producer Ed Harrison, and their segment producer, Bianca.

Full disclosure: long LUKOY, ESV, NAVI and SBS for clients and me