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The Aleph Blog's Blog

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The Crisis at the Tipping Point

August 9, 2017 Comments (0)

Photo Credit: Fabio Tinelli Roncalli || Alas, there were so many signs that the avalanche was coming…==================Ten years ago, things were mostly quiet.  The crisis was staring us in the face, with a little more than a year before the effects of growing leverage and sloppy credit underwriting would hit in full.  But when there is a boom, almost no one wants to spoil the party.  Yes a few bears and financial writers may do so, but they get ignored by the broader media, the...

The Best of the Aleph Blog, Part 33

August 8, 2017 Comments (0)

Photo Credit: Renaud CamusIn my view, these were my best posts written between February 2015 and April 2015:One Dozen Reasons Why the Average Person Underperforms In Investing, Part 1One Dozen Reasons Why the Average Person Underperforms In Investing, Part 2Most of this boils down to chasing past performance, neglecting fundamentals, and neglecting basic risk control.Learning from the Past, Part 4Learning from the Past, Part 5a [Institutional Bond Version]In this series, I disclose my WORST...

Why is the Stock Market So High?

August 6, 2017 Comments (0)

Photo Credit: Carl Wycoff || It is a long way to the end of retirement.  People are getting ready for it.  Are you?==========================Assuming that you could throw stones on the financial internet, it would be hard to toss a stone and miss articles talking about how high the stock market is.  One good article from last week was Why Do U.S. Stocks Keep Hitting Records? Here Are Five Theories from the Wall Street Journal.  Here were the five theories:Stocks Reflect the Resurgent Health of...

Redacted Version of the July 2017 FOMC Statement

July 26, 2017 Comments (0)

Photo Credit: Leo Newball, Jr. || I visited that building when I was 24.===========June 2017July 2017CommentsInformation received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year.Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately...

The Best of the Aleph Blog, Part 32

July 25, 2017 Comments (0)

Picture Credit: Rocío Garcia Montes==============================In my view, these were my best posts written between November 2014 and January 2015:Stay CalmPolitical changes rarely create the policy/legal changes that people fear or hope for, so relax.Problems in Simulating Investment ReturnsThere are seven problem areas in investment return modeling that are rarely dealt with, and certainly never as a group.  That’s why I would encourage you to be at least least slightly skeptical of...

The Best of the Aleph Blog, Part 36

July 25, 2017 Comments (0)

Photo Credit: Renaud CamusIn my view, these were my best posts written between November 2015 and January 2016:Don’t be a Miser in Retirement (Or Ever)“There is a fine line between over-saving and under-living.”Another way to phrase it: God isn’t a miser; you shouldn’t be either.On Lump Sum DistributionsManaging a lump sum distribution for income is one of the hardest things to do in investing.Easy In, Hard Out (III)Continuing the series on the troubles the Fed will have shrinking its balance...

Overvaluation is NOT Due to Passive Investing

July 22, 2017 Comments (0)

Photo Credit: Hagens_world || I want to buy 1% of all of the items there in one nice neat package! ============There’s been a lot of words thrown around lately saying that indexing has been leading to overvaluation of the US stock market.  I’m here to tell you that is wrong.  I have two reasons for that:1) Active managers have been pseudo-indexing for a long time.  The moment they get benchmarked to an index they do one of two things:a) accept it, gain funds for mandates that are...

Perceived Versus Real Risk Tolerance

July 12, 2017 Comments (0)

Picture Credit: Denise Krebs || What RFK said is not applicable to investing.  Safety First!  Don’t lose money!=======Investment entities, both people and institutions, often say one thing and mean another with respect to risk.  They can keep a straight face with respect to minor market gyrations.  But major market changes leading to the possible or actual questioning of whether they will have enough money to meet stated goals is what really matters to them.There are six factors that go...

The Best of the Aleph Blog, Part 31

June 29, 2017 Comments (0)

Picture Credit: Sharon Pazner========================During this era, I started contributing articles via tumblr to Yahoo Finance.  That also meant that every article would start with a picture, graph, or photo.In my view, these were my best posts written between August and October 2014:The Investments Matter More than their FormHedge funds and mutual funds are shells — what goes into them matters more than the form itself.On GenworthDown 70%+ since then.  In general, complexity is not...

The Doubling Rule, Redux

June 26, 2017 Comments (0)

This is a small update of my last piece.  I wish that I had put this graph in that piece, because it completes it.Over the interest rate range of 0% to 30%, the average absolute deviations from perfect doubling using the Rule of 72 was 2.794%.  Given the simplicity of the Rule of 72, that is wonderful.But the “Rule of K” is virtually exact.  The average absolute deviations from perfect doubling using the Rule of K was 0.036%.Is this great?  Well, with modern computers, exactitude is...