Recent DavidMerkel's Commentaries
The Best of the Aleph Blog, Part 13
This portion goes from February 2010 to April 2010.Probably the biggest new thing I did at the blog was start "The Rules" series. Personally, I think all of them are best articles, because they proceed from deeply held beliefs of mine. So I start with those:The Rules, Part IThere is no net hedg...
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Tags: best-articles | the-rules
A Proposal for Money Market Funds II
I thought that I had a really good proposal for dealing with money market fund problems. And it is good, far better than what the SEC is proposing. My proposal is better because it treats money market funds like ETFs -- they are pass-through vehicles, and as such, do not need capital buffers. And...
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Tags: banks | bonds | public-policy
Against Risk Parity, Redux
Here are two articles to read on risk parity: Pro: Pick Your Poison Con: The Hidden Risks of Risk Parity Portfolios I'm on the "con" side of this argument, because I am a risk manager, and have traded a large portfolio of complex bonds. For additional support consider my article Risks, Not Risk. ...
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Tags: asset-allocation | banks | bonds | macroeconomics | portfolio-management | quantitative-methods | real-estate-and-mortgages | stocks | structured-products-and-derivatives | value-investing
Sorted Recent Tweets
Trying a new format here, I think readers will like it better. Most things are better after additional effort. Think of this as a news links by subject post.EconomicsIf you look in the back, it seems that there were 58 respondents. From page 13: Methodology & Panel Selection Invi... http://t.co...
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Tags: accounting | asset-allocation | banks | blog-news | bonds | fed-policy | macroeconomics | pensions | portfolio-management | stocks | structured-products-and-derivatives | value-investing
Against Risk Parity
Many investment ideas are promising so long as few do them. Yes, there is an opportunity, but it is limited. "Shh, don't tell everyone about it."Thus, the concept of "risk parity." Lever every asset class up until it has the same volatility as common stocks. Under theoretical conditions, one c...
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Tags: academic-finance | asset-allocation | banks | bonds | macroeconomics | portfolio-management | public-policy | quantitative-methods | speculation | stocks | structured-products-and-derivatives
Industry Ranks February 2012
Industry-Ranks-2-2012 I'm working on my quarterly reshaping -- where I choose new companies to enter my portfolio. The first part of this is industry analysis. My main industry model is illustrated in the graphic. Green industries are cold. Red industries are hot. If you like to play momentum, ...
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Tags: industry-rotation | portfolio-management | quantitative-methods | stocks | value-investing
We Eat Dollar Weighted Returns — III
Somebody notify the Bogleheads, they will like this one, or at least Jack will. Yo, Jack, I met you over 15 years ago at a Philadelphia Financial Analysts Society meeting. How bad are individual investors at investing? Bad, very bad. But what if we limit it to a passive vehicle like the Grandaddy...
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Tags: quantitative-methods | speculation | stocks | value-investing
On Corporate Cash
In human terms, we are most often best off with the via media, that is, the middle way. So it is with corporate cash. The first article I wrote on the internet (in 2003) argued for the value of excess cash in the hands of intelligent management teams. But there is a limit to that, and more so whe...
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Tags: accounting | portfolio-management | stocks | value-investing
Post 1700
Every 100 posts, I breathe a deep breath and try to catch up on where we have been. It's not always easy for me; I write about so many different issues, and I shift in response to changes in the markets.So, where have we been?Discussing finding jobs in the shrinking field of finance (one, two)An...
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Tags: blog-news
On Junk Bonds
If someone were to ask me my opinion on Junk Bonds at present, fool that he would be to ask me because I know real experts elsewhere, I would say this: They are good for a speculative trade, but dumb money has arrived. Be ready to sell when the momentum fails.High yield ETFs sell at decent premi...
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Tags: bonds | portfolio-management | quantitative-methods | stocks
On Opaque Transparency
There are two things that I want to comment on Fed policy this evening: Transparency is overrated, and Bernanke does not understand savings.Transparency is OverratedEver heard of the phrase "data overload?" Greenspan would do that verbally in his testimony to Congress, providing them with more d...
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Tags: banks | bonds | fed-policy
Recent Tweets
@The_Analyst does Hempton do Twitter? Bright guy. Jan 26, 2012 RE: @SoberLook It's not a pledge, indeed, but it is an estimate. The bond market has reacted quite strongly to the e... http://t.co/crpU3QpH Jan 26, 2012 RE: @SoberLook Does this post from Alea change your opinion at all? http://t.co...
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Tags: blog-news | fed-policy
Redacted Version of the January 2012 FOMC...
December 2011January 2012CommentsInformation received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth.Information received since the Federal Open Market Committee met in Decembe...
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Tags: bonds | fed-policy | macroeconomics | public-policy | real-estate-and-mortgages | stocks
Recent Tweets
They may not have meant to publish it, but the results don't seem too earthshattering -- ... http://t.co/MkmCtxnJ Jan 25, 2012 @Convertbond He was 1 of my professors @ Hopkins, & the only 1 w/a consistently free market viewpoint; Talked w/him @ http://t.co/k4mL15rp Jan 25, 2012 India to pay gold ...
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Tags: blog-news
On Financial Intermediation
I appreciate Steve Randy Waldman, who writes the excellent blog Interfluidity. Even before I started blogging, while I was at RealMoney, we interacted over CPDOs, along with Alea, and several others that were onto the scam. That was a fun time, because aside from the Canadian rating agency Domi...
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Tags: banks | ethics | insurance | macroeconomics | public-policy
