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Author: David Merkel

That’s Mister Buffett to You, Lady!

In my e-mail, I received this tawdry message: Hi David, Why is every so in love with Warren Buffett and his financial advice? He used to be a great investor. Not anymore. Here’s a good article I saw on it from a newspaper...

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The Folly of Large Acquisitions

One of my portfolio management rules deals with use of free cash flow.  I have a hierarchy of how I would like managements to use cash and free cash flow: Pay down debt; eliminate preferred stock. Grow existing business...

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Leverage Isn’t Free

I’ve been running across an idea that outperformance is possible with safe assets, so why not take those assets and lever them up until their volatility is equal to common equities, and earn more at the same level of...

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Hypocritical Buffett

Computer-wise, things haven’t been going my way lately.  My laptop seemingly died this evening, and my Gmail account has hacked by Chinese hackers last week.  Apologies to those who got spammed by my Gmail...

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The Rules, Part XXIV

Every excess eventually unwinds.  When an excess unwinds, the fall gets exacerbated by trend-followers blowing out of mutual and other pooled funds with lousy relative performance.   If you had a list of who owned a...

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Book Review: Expected Returns

  How do we estimate what returns are reasonable to expect?  Most investment counselors fall back on easy rules of thumb, but is there a way of doing better? In this book, the author takes academic research on...

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High Volatility, but not Peak Volatility

The graph above is the S&P 500 on the right axis with a logarithmic scale, and 4-, 6- and 20-day average absolute percentage price change on the the left axis, linear scale.  As you can see, high price volatility is...

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Stagflation-Plus

I do not agree at all with modern Keynesians who lacked the restraint of Keynes.  Deficits are supposed to be temporary not structural.  Loose monetary policy is supposed to be temporary, not lingering. Many policies...

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