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DavidMerkel's Commentaries

Showing Posts 1 - 15 out of 818 found.

Book Review: A Decade of Debt

This is a short book that in some ways is a summary of Reinhart and Rogoff's greater work This Time Is Different: Eight Centuries of Financial Folly. Think of it as an executive summary in book form. How short is it? Less than 160 pages, but in terms of text there's less than 40 pages of text in this 6? x 9? book, so it's a fast read.Graphs occupy the remainder of the book, with the latter...

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Book Review: The Nature of Risk

I'm here this evening to review another excellent book on risk control by David X Martin.This is a difficult book to review, because if I describe what happens, I end up spoiling the book. This is a small book, and I read it in less than an hour.This book came into existence because the author had a hard time explaining risk to the family of a friend who had died, and then his own family. He...

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Book Review: The Crisis of Crowding

I am going to say something that I rarely say: I am grateful that this book was written. Why am I grateful?It highlights the idea that people, even really bright people, do not behave rationally, but imitatively -- they follow recent price action -- they mimic.It validates the concept of a "crowded trade," one that offered high returns in the past, may presently offer low returns to a "buy...

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How Warren Buffett is Different from Most Investors, Part 1

There was an academic article published recently on the investing of Warren Buffett. Afterward, I thought I saw a few articles reflecting on it, but here is the only one I see now: There's Warren Buffett -- and then there's the rest of us. Buffett is different, because he grew as an investor and as a businessman, and usually made the right moves over a 50+ year career. When you don't have a...

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Book Review: Bailout

What does Washington, DC care about more -- people or corporations? Do you have to ask? DC favors corporations, and all three branches of the government support this. Both parties favor this. Why is this so?The corporations, and those that own them are a more effective means of raising funds to maintain their hold on the offices that the occupy. Beyond that, there is an attitude that...

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Sorted Weekly Tweets

PoliticsBernanke Letter Defends Fed Actions http://t.co/COYtCtzg Hope the election brings enough change that we end up w/a fresh Fed Chairman $$ Aug 25, 2012Private equity tax questions for Mitt Romney http://t.co/hXaAu0sR 1) Carried interest 2) Corporate interest deductions 3)Mgmt fee waivers $$ Aug 24, 2012Sorry, Henry Blodget, You're Wrong About Election 2012 http://t.co/5DghXuzI...

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The Future Belongs to Those with Patience, Part 2

This occurred to me today, and so I want to toss it out as an idea, even if I never get to work with it. What percentage of stocks are covered by 13F filings? I bet it is pretty high.Here's my idea: using the 13F filings, we segment holders into traders ("weak hands") and investors ("strong hands"), based off their level of turnover. If my ideas are right, the stocks held by the "strong...

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On the Specialness of Long Treasuries

When Gary Schilling presented to the Baltimore CFA Society, he made the comment about how much bonds beat stocks by. His proxy for bonds was 25-year zero coupon bonds. Invest in those from 1980 to the present, rolling to the new 25-year regularly, and yeah you can beat stocks handily when interest rates fall and continue to fall.Think of what a 25-year zero coupon Treasury means. The price...

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What Caused the Crisis?

I have wanted to write this article for some time, but decided to sit on it in order to consider the matter more closely. What caused the financial crisis of 2008? In my writings at RealMoney, I anticipated much of the crisis, though not all of it, and certainly not the severity of it. The prime cause of the financial crisis was a buildup of private debt encouraged by the tax code and the...

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The Future Belongs to Those with Patience

I've finished the book "Bailout" and will review it next week. I am in the midst of the book "The Crisis of Crowding," and will likely review it next week. What I write this evening is a bit of an experiment, and preparatory to what I write on "The Crisis of Crowding."Here's the issue: I spend more time on liability issues than most investors. How is an investment financed? For those that...

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Using Investment Advice, Part IV

My last point on investment advice is to think long-term and treat it as a business. You are trying to buy underpriced cash flow streams.Because it is a business, you must focus on the long term, and downplay short cycle information. Don't let the media scare you or make you greedy. There are bumps and jolts in all investing. Keep your eyes on the long term. Always ask yourself when reading...

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Using Investment Advice, Part III

The next aspect of using investment advice is understanding your own capabilities. It comes down to what you understand, and what you have time for.Some investment advice requires constant attention, even assuming that it is right. Does your job afford you that flexibility? If it doesn't, you need to look to longer-term strategies.There was a period in my life when I did small company deal...

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Using Investment Advice, Part II

Part two is understanding the advice. A large part of the problem is that many aspects of the advice are unsaid. For example, with a "buy" recommendation:What time horizon does this recommendation require?How likely is it that this investment will succeed?What risk factors could cause the investment to fail?How will this advice get updated?Have prior investors benefited from this advice?What...

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What Insurance do Actuaries Buy?

A reader asked me the following: When I know that you are trained as an actuary it got me curious. They say that actuary assess the risks of insurance products to find value for consumers, at the same time evaluate the probable risks of the product. What kind of insurance does an actuary actually buy for his and his family? Insurance are often sold with economic bias so what better way to...

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Using Investment Advice, Part I

If you have a subscription at RealMoney, you should read these articles:Using Investment Advice, Part 1Using Investment Advice, Part 2Using Investment Advice, Part 3Tread Warily on Media Stock TipsI didn't say it at the time, but I wrote those with Cramer in mind. This was not that I did not like Cramer, hey, he gave me my start in investment writing, my blog would not exist without that...

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