I’m fascinated at the degree of hatred for high frequency trading [HFT] among my fellow portfolio managers, particularly those that live in the Baltimore area.  I have my own techniques for dealing with them: discretionary reserve orders, and not trading much.  If you are a longer-term investor, the games that exist in buying and selling in the short-run don’t matter much.  In my opinion, HFT milks short-term traders the most.But I have my own solution to high frequency trading:...

Dr. Jeff Miller wrote an interesting question the other day:“Why does a Shiller disciple care about profit margins?“Now, I am not a disciple of Dr. Shiller, I disagree with him on many issues, Trills for an example.  When Shiller talks, odds are 50-50 that I agree, which makes him interesting to me, unlike Bernanke and Krugman who I almost always disagree with, and James Grant and Caroline Baum, who I almost always agree with.  Someone who agrees with me and disagrees with me...

One of the problems with many politicians, journalists, financial analysts, economists, etc., is that they don’t think systematically.  Go back to late 2006, when I wrote my piece Wrecking Ball Looms for Big Housing Spec, which was regarding the coming subprime crisis.  (Note: my editor often retitled my pieces; my original title was more circumspect.)  Or read my piece in mid-2005 regarding the impending unwind of leverage and prices in residential real estate, Real Estate’s Top Looms. ...

 This book hasn’t been released yet.  I got an early copy.  The book is interesting enough that I would like to do a Q&A with the author, and I have contacted the PR flack to do so.To the review:Would you like to understand the mindsets of a variety of successful hedge fund managers?  This book will give that to you, but there is a catch: you will also learn how these managers developed, and this is a big plus.Most of the managers went through rigorous experiences that made them...

So, what do I write about at the Aleph Blog?  I write about a lot of things.  That’s a strength, and a weakness.  A weakness, because not everyone cares about a lot of things and if I shift to cover an area that is unusual, readers may not care.It’s a strength, in the same sense that most of the best athletes could do well at a wide number of games.  I follow a wide number of themes in the financial markets and economics.  I like to think that I bring more perspective to a wide...

Eurozone If Greece Quits Euro, Its Ruin Will Be Pointless http://t.co/2DotggME Suggests Greece will face more pain if leaves E-zone than stays $$ May 17, 2012Experts Try to Chart Path for Exit From Currency http://t.co/dtIAoo3g Let’s see, where is that manual for unscrambling eggs? Mmm… $$ May 17, 2012On the E-zone: the politicians, like sorcerer’s apprentices, thought they could reshape Europe; end up fighting forces beyond their power $$ May 17, 2012The Running of the...

Two years ago, I was at a board meeting for a nonprofit that I serve, and during a break, one of the older gentlemen made a statement that the big problem with America is that we don’t make anything anymore.  I suggested to him that many services enhance and replace the need for some goods.Now, I don’t have a Facebook account, and I have no intent of getting one.  But I must have been thinking about Facebook as an investment, because I asked him, “What about something like...

It was late 1993, and I knew that we could make a lot of money if I sold floating-rate Guaranteed Investment Contracts.  Let me quote an earlier piece:My goal as an actuarial businessman was to make profits with modest risk for my ultimate owners, who were the mutual policyholders.  Once I faced a situation where there might be easy profits — writing floating rate GICs.  So, I went to my models and tried to figure out how we could make money safely while our interest rates would shift every...

There will be elderly poor.  Look at page 26 of this PDF.  I interpret those that don’t know or declined as being well below $50K in assets.  That means 60% of those reaching “retirement age” will have less than two years income stored up.That said I feel more sorry for younger workers who have to pay high amounts into Social Security/Medicare, and they will not get out of program what they put in.  There’s a longish article here, excerpting from a recently released book...

May is a tough month for me, because I have to submit reports for the nonprofits that I work with, and this year is worse, because I have a moderate injury that I need  to see a doctor about, but can’t until next week, because of the schedule.But I do want to say a few things about the JP Morgan news.  First, JP Morgan should be broken up, whether state by state, or by Federal reserve district, with an investment bank spun off as well.Second, after we have been through 2008, why do we...