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Meeting the “Bond King”

10/17/2014 06:03:20 AM

It was winter in early 1995, and I was wondering if I still had a business selling Guaranteed Investment Contracts [GICs].  Confederation Life had gone insolvent the August prior, and I noticed that fewer and fewer stable value funds wanted to purch > read more

Mantra: Interest Rates Have to Rise, Interest Rates Have to…

10/16/2014 04:30:04 AM

I thought of structuring this post like a fictional story, but I couldn’t figure out how to make it good enough for publication.  Well, truth is often stranger than fiction, so have a look at this Bloomberg article pointing at a 37% loss in th > read more

Even with Good Managers, Volatility Matters

10/16/2014 02:42:40 AM

This is another episode in my continuing saga on dollar-weighted returns. We eat dollar-weighted returns.  Dollar-weighted returns are the returns investors actually receive in a open-end mutual fund or an ETF, which includes their timing decisions, > read more

Factor Glut

10/14/2014 03:22:04 AM

I use factors in my investing. What *are* factors, you ask?  Factors are quantitative variables that have been associated with potential outperformance.  What are some of these factors? Valuation (including yield) Price Momentum (and its opposite > read more

Numerator vs Denominator

10/11/2014 05:07:37 AM

Every now and then, a piece of good news gets announced, and then something puzzling happens.  Example: the GDP report comes out stronger than expected, and the stock market falls.  People scratch their heads and say, “Huh?” A friend of > read more

When Will the FOMC Tighten the Fed Funds Rate?

10/10/2014 04:49:43 AM

There are several ways to gauge the Federal Open Market Committee wrong. I am often guilty of a few of those, though I hope I am getting better.  Don’t assume the FOMC: Shares your view of how economies work. Cares about the politics of the s > read more

The Future Will Be Like The Past, Only More So

10/09/2014 06:50:49 AM

Yesterday there was an article where Buffett was quoted on getting mortgages to buy houses. Let me quote the most relevant portion: “You would think that people would be lining up now to get mortgages to buy a home,” Buffett said today at a confe > read more

Managing Money for Retirement

10/09/2014 05:56:55 AM

Investing is difficult.  That said, we can make it harder still.  We can encourage people with little to no training to try to do it for themselves.  Sadly, many people get caught in the fear/greed cycle, and show up at the wrong time to buy and/o > read more

Buying an Inexpensive Car

10/08/2014 05:50:29 AM

I bought an inexpensive car a couple of days ago, a 2009 Toyota Corolla with 19,700 miles on it.  It’s in almost perfect condition.  I paid ~$10,300 in cash to get it, inclusive of tax and tags. Sound like a good deal?  I think so, but let m > read more

What Should the Cost of Equity Be to Value Investors?

10/04/2014 23:41:36 PM

I can’t remember where I ran into it, but I found this article on a blog that I had not run into before on Calculating [the] Cost of Equity for Value Investors.  I think it gets close to the right answer, and I would like to sharpen it here. M > read more

Possible Bond ETF Problems

10/02/2014 06:02:34 AM

There have been a few parties worrying about crises stemming from ETFs, because they make it too easy for people to sell a lot of assets in a crisis. I think that fear is overblown, but I don’t think it is non-existent, and I would like to use > read more

Inevitable Ineffective Banking Regulation

10/01/2014 03:58:01 AM

I am mystified at why people might be outraged or surprised that the Federal Reserve does a poor job of overseeing banks.  The Fed is an overstaffed bureaucracy.  Overstaffed bureaucracies always tend toward consensus and non-confrontation. I know > read more

AIG Was Broke

09/30/2014 04:54:11 AM

There’s a significant problem when you are a supremely big and connected financial institution: your failure will have an impact on the financial system as a whole.  Further, there is no one big enough to rescue you unless we drag out the pub > read more

Time to Chase Bill Gross?

09/28/2014 01:25:56 AM

Jason Zweig at the Wall Street Journal had a very good piece on whether to follow Bill Gross as he goes from Pimco to Janus.  Let me quote one paragraph: Morningstar estimates that over the past five years, the average investor fell behind Pimco Tot > read more

Two Questions on Fixed Income from the Mailbag

09/20/2014 23:15:06 PM

From my readers: What are your thoughts on Pimco’s new strategy for its flagship fund? This concerns me because its one of the few “safe” funds in my company’s 401k plan. I haven’t heard anyone critique this and thought > read more

On LinkedIn Endorsements and Registered Investment Advisors

09/20/2014 23:03:46 PM

I’m going to be away for a few days.  Maybe I will have time to post; most likely I won’t.  Before I go, I want to thank my readers who have endorsed me at LinkedIn.  You are most generous in your assessments of my abilities. But as fo > read more

Volatility Can Be Risk, At Rare Times

09/19/2014 02:49:28 AM

There is a saying in the markets that volatility is not risk. In general this is true, and helps to explain why measures like beta and standard deviation of returns do not measure risk, and are not priced by the market. After all, risk is the probabi > read more

Retirement – A Luxury Good

09/18/2014 09:24:44 AM

Recently I was approached by Moneytips to ask my opinions about retirement. They sent me a long survey of which I picked a number of questions to answer. You can get the benefits of the efforts of those writing on this topic today in a free e-book, w > read more

End the “Code of Silence”

09/12/2014 04:54:20 AM

I was asked to contribute to a survey recently, and one question made me think.  It was a question about why don’t more people consult investment professionals, and What keeps them from doing so.  I gave a fairly standard answer for me: There > read more

Post 2600

09/09/2014 04:05:05 AM

Every 100 posts or so, I take a step back and think about where I have been, and maybe, where things are heading.  This time, things are a little different. It started when there was a series of articles published where they were measuring the amoun > read more

Book Review: The Little Book of Market Wizards

09/09/2014 02:34:27 AM

Over time, I have reviewed a decent number of “Little Books.”  I have a theory as to why I like some of them, and not others.  I like the ones that take a relatively narrow concept and summarize it.  An example of that would be Mark Mo > read more

Goes Down Double-Speed (Update 2)

09/06/2014 23:30:35 PM

This is the third time I have written this article during this bull market.  Here are the other two times, with dates: Goes Down Double-Speed 2/17/2011 Goes Down Double-Speed (Updated) 5/22/2013 The first time, we had doubled since the bottom.  S > read more

The FSOC is Full of Hot Air

09/06/2014 03:35:14 AM

I’ve written about this before, but if the FSOC wants to prove that they don’t know what they are doing, they should define a large life insurer to be a systemic threat. It is rich, really rich, to look at the rantings of a bunch of burea > read more

One Less Mentioned Reason for Stock Buybacks

09/06/2014 02:47:32 AM

Buybacks are not my favorite way to redeploy excess capital, in general.  But let me describe to you when they are useful and when they are not [taken from this article]: > read more

Enjoying Yahoo Finance Portfolio News

09/05/2014 02:45:47 AM

I would like to thank Yahoo Finance for cleaning up their news stream that accompanies portfolios that are set up at their site.  It used to be that I would have to copy the news flow from Yahoo Finance, drag it into an Excel spreadsheet, and do som > read more

Book Review: The Education of a Value Investor

09/05/2014 02:13:02 AM

Before I start, I would like to remind readers of a Q&A that I did with the author, which is available here. [For readers at Amazon: Google "Aleph Education of a Value Investor". There are other useful links in the version at my blog.  Wish Amazon > read more

Ranking Industries by Range

09/04/2014 03:40:30 AM

As part of a continuing quest to turn up stock ideas in the midst of a market hitting new highs, I wanted to trot out a less commonly used statistic called “range.”  Range is the distance that a company’s stock price is between its > read more

Book Review: Business Adventures

09/03/2014 02:07:24 AM

Do you like economic history?  I do.  I often think that we spend too much time on the numbers in business, and not enough time on the qualitative reasoning that goes into making good business decisions. This particular book gained some notoriety > read more

My Time on RT America’s Boom Bust

09/03/2014 00:17:15 AM

You can never quite tell where blogging may take you.  I know that if I lived near New York City, some opportunities would open up that presently aren’t likely.  Living near Baltimore/DC has had its share of opportunities, though. In general, > read more

Q&A with Guy Spier of Aquamarine Capital

09/02/2014 02:45:18 AM

In the near future, I will be writing a a review of Guy Spier’s The Education of a Value Investor, which will be released next week.  Until then, to whet your appetite, here is an 11 question Q&A that I did with Guy, for which I give him thank > read more

Book Review: Deep Value

09/02/2014 02:16:45 AM

This is a book that starts with a simple premise: buy stocks at a fraction of the per share intrinsic value of the company, conservatively calculated.  Neat idea, huh, and it is called value investing. The author starts by giving a preview of where > read more

Using Mean Reversion and Momentum for Possible Advantage

08/30/2014 23:00:36 PM

One of the challenges of fundamental investing is trying to find decent ideas that are off the radar. There are a number of ways to try to do that by looking at: smaller foreign companies companies that have made some significant losses. companies wh > read more

Two Portfolios. Pick One.

08/29/2014 01:16:28 AM

I’m going to show you two portfolios — I’m not initially going to tell you much about either one, but then you can consider which one you might like better.  Here’s portfolio A: And here is portfolio B: There is one obvious d > read more

The Art of Extracting Large Commissions From Investors

08/28/2014 00:04:42 AM

The dirty truth is that some investments in this life are sold, and not bought.  The prime reason for this is that many people are not willing to learn enough to save and invest on their own.  Instead, they rely on others to corral them and say, &# > read more

Return to Behemoth Stocks

08/27/2014 02:17:49 AM

Photo Credit: Benh LIEU SONG Somewhat less than three years ago, I wrote two articles on Behemoth stocks [one, two], which I define as stocks with over $100 Billion of market cap.  Today I want to revisit those stocks, and those that have joined th > read more

Peddling the Credit Cycle

08/25/2014 22:48:37 PM

Starting again with another letter from a reader, but I will just post his questions in response to this article: 1) How much emphasis do you put on the credit cycle? I guess given your background rather a great deal, although as a fundamentals guy, > read more

Should I Invest in Private Equity?

08/23/2014 23:27:40 PM

One of the best things for me regarding blogging are the readers who ask me questions.  When I get a set of them that are general enough, I answer them for all my readers, after stripping out identifying data.  Here is the most recent: Thank you fo > read more

Book Review: Investor Behavior

08/21/2014 23:21:26 PM

Ordinarily, I read all of the books that I review, but when I don’t, I tell my readers. This book I started to read, but I found it so dry that I started skimming it. It’s not that I don’t know the material; it is that I do know it. > read more

The Victors Write the History Books, Even in Finance

08/21/2014 01:04:24 AM

> read more

Ranking P&C Reserving Conservatism

08/20/2014 13:28:32 PM

About 1 1/2 years ago, I wrote a seven-part series on investing in insurance stocks.  It is still a good series, and worthy of your time, because there aren’t *that* many writers freely available on the topic. This particular article deals exp > read more

The Tip Culture in Amateur Investing

08/16/2014 23:03:00 PM

A reader wrote to me and said: I’m sure a lot of people have already told you but I want to tell you anyway: Your blog is awesome! I came across The Aleph Blog a couple of months ago and I’m very impressed with your content. I particularly li > read more

The Problem with the Phillips Curve

08/16/2014 07:40:27 AM

I remember sitting in my intermediate macroeconomics class at Johns Hopkins, when the Professor was trying to develop the concept of the Phillips Curve, which posits a trade-off between labor unemployment and price inflation, at least in the short ru > read more

On Research Sources and Trading Rules

08/15/2014 02:54:23 AM

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Avoid Buying Individual Stocks in Distress

08/14/2014 08:14:46 AM

#88621042 / gettyimages.com There is a temptation, particularly among novice value investors, to throw money at a stock that has fallen hard.  Bargains are hard to pass up. It can be worse if you owned the stock prior to the fall, and kept investing > read more

The Shadows of the Bond Market’s Past, Part II

08/13/2014 05:59:10 AM

This is the continuation of The Shadows of the Bond Market’s Past, Part I.  If you haven’t read part I, you will need to read it.  Before I start, there is one more thing I want to add regarding 1994-5: the FOMC used signals from the bond > read more

The Shadows of the Bond Market’s Past, Part I

08/12/2014 05:11:30 AM

> read more

A Few Investment Notes

08/09/2014 23:56:32 PM

Just a few notes for this evening: 1) I’ve been a bull on the long end of the Treasury curve for a while.  It’s been a winning bet, and the drumbeat of “interest rates have nowhere to go but up” continues.  Here’s an a > read more

On the Recent Anxiety in High Yield Bonds

08/08/2014 03:45:02 AM

Quoting the beginning of a recent article at Bloomberg.com: As junk bonds plunge in value, many investors are wondering why. There’s no obvious explanation for the 1.5 percent decline in U.S. high-yield securities in the past month, or the $9.9 b > read more

On Genworth

08/07/2014 00:28:14 AM

Another letter from a reader: Hi David Hope you are having a good summer. Would love to hear your thoughts on recent developments at Genworth.  My sense has always been that LTC care insurance is a really tough business for the underwriter.  How ca > read more

Ignore Yield

08/06/2014 23:57:45 PM

Yield is not an inherent feature of an asset.  Why? Dividends can be cut. Bonds can default. Taxable income can fall for REITs, BDCs, and MLPs, thus lowering their distributions. Bonds sometimes have funny features where they can be called away from > read more

On Management Fees

08/06/2014 00:37:40 AM

Yet another letter from a reader: Hi David - Thank you for your commitment to sharing your wisdom, ideas, and experience.  I aspire to one day enjoy the success and happiness that you have in your life and career as an investor. My question may be a > read more

Can the “Permanent Portfolio” Work Today?

08/06/2014 00:06:44 AM

Another letter from a reader: Dear Mr. Merkel: I just discovered your blog through Valuewalk, which I read most days. I haven’t read much yet on your blog, but from what I’ve seen, I really like your insights and comments. I’ve been > read more

How to Start an Investment Advisory Business from a Nontraditional Background

08/05/2014 00:47:08 AM

Another letter from a reader: Hi, I recently discovered your blog. I read that you have had quite a long history in the financial industry and you mentioned to be running your own asset management shop as well. I currently work as a software develope > read more

On Setting Up New Accounts

08/05/2014 00:31:11 AM

Another great letter from a reader: Hi David, I enjoy your writing. I find myself of a similar mindset. I am an investment advisor running my clients individual accounts in a value fashion. I am currently have my clients invested in about 20 position > read more

The Investments Matter More than their Form

08/02/2014 23:15:46 PM

Open-end Mutual Funds, including index funds Closed-end Mutual Funds Exchange Traded Funds, including index funds Separately Managed Accounts Unit Investment Trusts Hedge Funds Private Equity Other Limited Partnerships [LPs], including MLPs Variable > read more

Regarding Underemployment

08/02/2014 01:21:40 AM

This is just meant to be a few thoughts.  I haven’t worked everything out, but I want to talk about how the labor markets are weak. Yes, the headline statistics are strong.  The U-3 unemployment figure is low at 6.2%.  But look at a few othe > read more

Not Apt, Not Teed Up, Not Going

08/02/2014 00:46:30 AM

Okay, let’s run the promoted stocks scoreboard: Ticker Date of Article Price @ Article Price @ 6/27/14 Decline Annualized Splits GTXO 5/27/2008 2.45 0.022 -99.1% -53.3% > read more

A Different Look at Neglect

08/01/2014 01:12:44 AM

It’s good to look at stocks that not everyone else is looking at.  A little neglect can be a good thing. Companies that are a little illiquid. Companies with a dedicated shareholder base; they don’t sell at the drop of a hat. Companies w > read more

The Best of the Aleph Blog, Part 25

07/29/2014 00:41:33 AM

In my view, these were my best posts written between February and April 2013: Wall Street Hates You I have a saying, “Don’t buy what someone wants to sell you. Buy what you have researched.” And so I would tell everyone: don’t give brokers di > read more

Of Faith and Markets

07/28/2014 01:07:52 AM

Here’s another letter from a reader.  If reading about my faith turns you off, stop reading now, because this will be thicker than usual. Hi David,  I’ve just started reading your blog, and greatly enjoy it. I noticed you integrated your fa > read more

On Returns-Based Style Analysis

07/26/2014 23:36:40 PM

Sometime in the next few weeks, I am going to dig into my pre-2003 [pre-RealMoney] files and see if there is anything there to share with readers.  Most of my best stories I have already told in my various series.  The one I will tell tonight I don > read more

Balancing Quality Against Valuation

07/25/2014 23:55:41 PM

A letter from a reader: Hi David, I am XXX, from India. I started reading your blog since few months. Few of the things i learnt, and much more are really complex for me to understand, the learning is ON. Somehow i decided that ” being good val > read more

Book Review: Panic, Prosperity, and Progress

07/25/2014 00:03:37 AM

I love economic history books, and I believe that most investors should read economic history.  History offers a broader paradigm for analyzing investment situations than mathematical models do. Mark Twain is overquoted on this, but only because he > read more

Book Review: Reducing the Risk of Black Swans

07/24/2014 00:46:22 AM

This is a very short book. I read the whole thing in 40 minutes.  It has one main idea: what if you could create a less variable portfolio that returns as much as the traditional 60% S&P 500, 40% Barclays Aggregate blend?  Wouldn’t you want > read more

Understanding Insurance Float

07/23/2014 00:26:02 AM

Warren Buffett has made such an impression on value investors and insurance investors, that they think that float is magic.  Write insurance, gain float, invest cleverly against the float, and make tons of money. Now, the insurance industry in gener > read more

On Berkshire Hathaway and Asbestos

07/22/2014 00:43:08 AM

Recently, a friend of mine from Canada came to stay with me.  We talked about a wide number of things, but when we talked about investing, I described insurance investing to him, giving my usual explanation on reserving. Classical life insurance res > read more

On Learning Compound Interest Math

07/19/2014 23:58:35 PM

When I read articles like this where people get scammed borrowing money, I say to myself, “we need to teach children the compound interest math.” Even my dear wife does not get it, and she sends the children to me when they don’t g > read more

A Letter from a Young Investor

07/19/2014 23:41:18 PM

Before I get to the letter, I recommend reading, You’re Ready for Retirement, but Your Savings Aren’t by Jonathan Clement, if you have access to the Wall Street Journal.  Main point: if you can work until age 70, do that, and then retir > read more

On Several Questions from a Reader

07/19/2014 01:26:39 AM

As time has gone along, I realize that my blog is different.  I do things that most bloggers don’t do, e.g. book reviews, answer e-mails publicly, and a few other things.  Also, my audience is far more international than most, with a large co > read more

On Current Credit Conditions

07/18/2014 03:21:09 AM

This should be short.  Remember that credit and equity volatility are strongly related. I am dubious about conditions in the bank loan market because Collateralized Loan Obligations [CLOs] are hot now and there are many that want to take the highest > read more

Book Review: The Risk Wise Investor

07/16/2014 00:33:06 AM

What do you think about first when you look at an investment? Do you think of how much you might make, or how much you might lose? Most successful investors think about how much they could lose, which makes this book a very good one to read, versus m > read more

Book Review: The Secret Club that Runs the World

07/15/2014 00:41:39 AM

This is a very good book; I learned a lot as I read it, and you will too. In this book, Kate Kelly takes on the economic sector of commodities.  This involves production, distribution, trading, hedging, and ultimate use. There are many players tryi > read more

Aiming for Transparency

07/12/2014 23:53:01 PM

Here’s another letter from a reader: David, I’m starting this fund, and I wanted to get your opinion.  It is best explained on YouTube in 55 seconds: let me know what you think https://www.youtube.com/watch?v=frwOrQd3f6w. It (hopefully) > read more

One More Note on Failure

07/12/2014 10:40:24 AM

Recently, we had a problem at the Merkel house: a toilet overflowed and the water did not shut off, flooding the room, and leaked into the basement.  Why did this happen?  Two things went wrong at the same time: The toilet needed to be plunged, bec > read more

The Reason for Failure Matters

07/11/2014 01:33:16 AM

When I was a young actuary, say in the early 90s, my boss came to me, and gave me an unrequested lesson.  He said something to the effect of: Most pricing actuaries make assumptions.  Well, I test assumptions.  That involves checking how actual re > read more

What to do when Valuations are High?

07/10/2014 00:12:47 AM

A letter from a reader: Hi David, What would you recommend for a long only equities portfolio? I too think the market may be overheating, but as always, it’s impossible to tell when the party will end. I would have said the same thing last year > read more

Book Review: Taking Down the Lion

07/08/2014 23:51:53 PM

This is a tough book for me to review.  The credit distress of Tyco caused me considerable stress, and let me explain to you how that was. I was the leading corporate bond manager at the fastest growing life insurance company 2001-2003.  We had a s > read more

When Was the Last Time We Had Two Down Days in a Row?

07/08/2014 23:00:32 PM

I met with some board members from the local CFA Society for lunch today.  I commented, “When was the last time you saw two down days in a row?”  The answers ranged from at least a month, to sometime in May.  I use the S&P 500 as a mea > read more

On Fixed Payment Annuities

07/05/2014 23:14:11 PM

Before I start, thanks to all those who e-mailed me over my “sorted weekly tweets.”  I am likely to continue doing them.  That will start next week, because I have had a flood of new clients, and other obligations. On Fixed Payment Annu > read more

What is Liquidity? (Part VII)

07/05/2014 06:15:12 AM

For those that want the quick hit and don’t care about the underlying ideas, here is the main idea: A vehicle holding assets may appear more liquid than the assets themselves, but that is only true in bull markets.  When bad times come, the li > read more

Regarding Sorted Tweets

07/04/2014 00:15:01 AM

I received the following from a reader of mine: Dear Sir: Have you removed your weekly Twitter digests? They were fantastic reading – please bring them back if you can. I’m a huge fan of your work. Regards, I’ve been really busy, an > read more

Pity the Multiemployer Pension Plans

07/02/2014 23:48:16 PM

Most of the efforts to encourage defined benefit pension plans in the US have been an exercise in wishful thinking.  Then there are the efforts to discourage defined benefit plans, which came about because the IRS felt that they were losing too much > read more

Book Review: Investing in India

07/02/2014 03:45:29 AM

I learned a lot from this book. India is an amalgam of nations inside one country. It is difficult to generalize about investing in India but there are a few themes to follow. Most companies in India have a dominant shareholder, or family of sharehol > read more

A Straw Blowing in the Wind

06/30/2014 23:12:50 PM

I would like to point your eyes to this article: Cash No Longer King as Stock, Asset Swaps Drive Takeovers.  This is another sign that equity valuations are getting high.  When equities are cheap, corporations part with cash to buy other corporati > read more

Book Review: The Big Con

06/29/2014 03:23:57 AM

This is an unusual book for me to review.  This is a book about Confidence Men, first published in 1940, and recently republished in 1999.  It was written by David W. Maurer, who was a professor of linguistics, and used his skills to analyze the sl > read more

A Stream of Hot Air

06/28/2014 02:53:05 AM

Let’s roll the promoted stocks scoreboard: Ticker Date of Article Price @ Article Price @ 6/27/14 Decline Annualized Splits GTXO 5/27/2008 2.45 0.022 -99.1% -53.9% > read more

Inflation?

06/27/2014 01:33:34 AM

Is price inflation growing?  I see three data points, amid slow nominal growth: Japan US Crude Oil prices have been rising, amid the relaxation of exports in the US, and weak global demand. This is early, but I have adjusted my bond portfolio to ref > read more

But They are not Actuaries, nor CFAs

06/27/2014 01:21:42 AM

I am grateful that risk managers inside banks have more clout these days.  That said, I want it to persist, and the best way to do it is to have risk managers beholden to an ethics code, like actuaries or CFAs. This is valuable, because the risk man > read more

What to Do After a Bad Day?

06/26/2014 01:30:17 AM

As for my portfolio, June was looking pretty good, then yesterday happened.  Worst relative performance day in 2 years.  The US Government announced that it would allow the export of partially refined crude oil, and US refiners got hit.  Two artic > read more

A Few Notes on Bonds

06/25/2014 01:18:46 AM

My comments this evening stem from a Bloomberg.com article entitled Bond Market Has $900 Billion Mom-and-Pop Problem When Rates Rise.  A few excerpts with my comments: It’s never been easier for individuals to enter some of the most esoteric debt > read more

“Smart Beta” and Portfolio Rule Seven

06/24/2014 04:38:23 AM

I’m not an advocate for smart beta.  There are several reasons for that: I don’t pay attention to beta in the stocks that I buy; it is not stable. The ability to choose the right brand of enhanced indexing in the short-run is difficult t > read more

Q&A with The Forbidden Game Author Dan Washburn

06/22/2014 01:23:08 AM

For anyone interested in learning more about Dan Washburn, author of The Forbidden Game,  you can consult his blog here.  Aside from that, you can read my Q&A with him here.  Hey, thanks for reading — I’m not a golfer, though I did it > read more

Book Review: The Forbidden Game

06/22/2014 01:12:14 AM

I’m not a golfer, but I really liked this book.  The charm of the book is that it takes us through the lives of three men, and a host of lesser characters, and shows us how the growth of golf in China shaped their lives.  Two of the protagoni > read more

Book Review: Bulls, Birdies, Bogeys & Bears

06/22/2014 00:22:23 AM

This is a clever book with a simple insight.  When good times are expected to continue, golf does well, as a competitive professional sport, as a recreation (it’s expensive), and the markets do well as well.  Vice-versa when bad times are exp > read more

On Alternative Investment Myths

06/21/2014 02:14:46 AM

I think alternative investments should analyzed the same way that ordinary investments are analyzed.  After all, I have written: On Alternative Investments and Alternative Investments, Illiquidity, and Endowment Management.  So when I read an ar > read more

Business Website

06/21/2014 01:50:24 AM

I am not asking for any asset management business, but I set up a website for my asset management business.  You can visit it here.  It is crude and basic, compared to Aleph Blog.  If you are curious about what I do to make a living, you can find > read more

The Tails of the Distribution do not Validate the Mean

06/20/2014 00:27:35 AM

17 months ago I wrote a post How to Become Super-Rich?  Now, many of my articles are timeless — they will still have value 10 years from now.   I like to write for the long-run.  Teaching basic principles is what this blog is about. The sur > read more

To the Fed: A Picture is Worth 1000 Words

06/19/2014 02:26:08 AM

The FOMC statements are much longer than they used to be, and as such, are less clear, giving faulty signals to the markets.  If language is not likely to change much  for a while, why not drop the language  entirely, especially in cases where it > read more

Avoid Illiquidity

06/18/2014 01:26:46 AM

There are several reasons to avoid illiquidity in investing, and some reasons to embrace it.   Let me go through both: Embrace Illiquidity You are offered a lot of extra yield for taking on a bond that you can’t easily sell, and where you are > read more

A Brief Note on Dividend-Paying Common Stocks

06/16/2014 23:32:18 PM

The equity strategy that I have run for the last 13+years always has a slightly higher yield than the S&P 500.  But I never look for dividends.  It’s not a factor in my process.  That said, looking for businesses that produce free cash flow, > read more



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