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Our popular course Introduction to QuantLib Development will be taking place June 18-20th, 2018.


The Aleph Blog's Blog

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Just Don’t Invert the Yield Curve

March 21, 2018 Comments (0)

Photo Credit: Brookings Institution================================Jerome Powell is not an economist, and as such, has the potential to try to remake the way the Fed does monetary policy.  Rather than hold onto outmoded ideas ideas like the Phillips Curve, which may have made sense when the US was a more insular economy, there are better ways to think of monetary policy from a structural standpoint of how financial firms work.(Note: the Phillips Curve relies on a very simple assumption that...

Why I Like Foreign Small Cap ETFs

March 15, 2018 Comments (0)

Photo Credit: amanda tipton || It may not be foreign, and not an ETF, but it IS a small cap======================This should be a short post.  When I like a foreign market because it seems cheap (blood running in the streets), I sometimes buy a small cap ETF or closed-end fund rather than the cheaper large cap version.  Why?They diversify a US-centric portfolio better.  There are several reasons for that:a) the large companies of many countries are often concentrated in the industries that the...

Estimating Future Stock Returns, December 2017 Update

March 14, 2018 Comments (0)

The future return keeps getting lower, as the market goes higher=================Jeff Bezos has a saying, “Your margin is my opportunity.”  He has found ways to eat the businesses of others by providing the same goods and services at a lower cost.  Now, that makes Amazon more productive and others less productive.  The same is true of other internet-related businesses like Google, Netflix, etc.And, there is a slight net benefit to the economy from the creative destruction.  Old...

Getting a Job in Insurance

March 7, 2018 Comments (0)

Photo Credit: Boston Public LibraryWell, I never thought I would get this question, but here it is:Thank you for your dedication to your blog.I was wondering if you have any skill development advice for recent graduates to gain a job in insurance – is technical or programming skills the most important or perhaps making business cases, or showing that you can make sound and reasonable conclusions?Thank you for your time.Kind regards,There are many things to do in insurance.  Some are...

Surprise! Return to RT Boom/Bust

February 28, 2018 Comments (0)

After almost three years, I returned to RT Boom/Bust on Tuesday.  There are many changes at RT.  Many new people, and a growing effort to put together an alternative channel that covers the world rather than just the US or just the developed world.  They are bursting at the seams, and their funding has doubled, so I was told.I get surprised by who watches RT and sees me.  My  congregation is pretty conservative in every way, but I have some friends working in intelligence come up to me and say,...

Monitor Financial Accounts Regularly

February 23, 2018 Comments (0)

Photo Credit: laws protect you now. In some ways, the laws are more virtual than real, and only apply to real situations, and not virtual ones.Let me explain.Though checks make up an increasingly smaller fraction of transaction volume in the US, they are still a lot higher here than in Europe.  As such, federal and many state legislators have not caught up with the effects of a hybrid system, where they attempt to regulate electronic banking transactions...

The Rules, Part LXIV

February 6, 2018 Comments (0)

Photo Credit: Steve Rotman || Markets are not magic; government economic stimulus is useless with debt so highWeird begets weirdI said in an earlier piece on this topic:I use [the phrase] during periods in the markets where normal relationships seem to hold no longer. It is usually a sign that something greater is happening that is ill-understood.  In the financial crisis, what was not understood was that multiple areas of the financial economy were simultaneously overleveraged.So what’s...

NASDAQ Composite Hits an Inflation-Adjusted High

January 20, 2018 Comments (0)

Hey, it only took 18 years to eclipse the prior high in purchasing power terms! Better than the Great Depression! This is an update of a post I did less than three years ago.  In that relatively short time, the NASDAQ Composite hit an all-time record in purchasing power adjusted terms.  Quite an ascent in the last two years.  I never would have predicted it.  If you took the other side of my advice you did better.That said, the S&P 500 is forecast to return 3.4%/year prior to inflation...

On the Migration of Stock

January 17, 2018 Comments (0)

Photo Credit: ashokboghaniThis should be a brief article.  I remember back in 1999 to early 2000 how P&C insurance stocks, and other boring slower-growth industries were falling in price despite growing net worth, and reasonable earnings.  I was working for The St. Paul at the time (a Property & Casualty Insurer), and for an investment actuary like me, who grew up in the life insurance business it was interesting to see the different philosophy of the industry.  Shorter-duration...

On a Letter from an Old Friend

January 16, 2018 Comments (0)

Photo Credit: jessica wilson {jek in the box}David:It’s been a while since we last corresponded.  I hope you and your family are well.Quick investment question. Given the sharp run-up in equities and stretched valuations, how are you positioning your portfolio?This in a market that seemingly doesn’t go down, where the risk of being cautious is missing out on big gains.In my portfolio, I’m carrying extra cash and moving fairly aggressively into gold. Also, on the fixed income...