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The Best of the Aleph Blog, Part 33

Tue, 08 Aug 2017 03:08:21 GMT

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Photo Credit: Renaud Camus

In 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 1

One Dozen Reasons Why the Average Person Underperforms In Investing, Part 2

Most of this boils down to chasing past performance, neglecting fundamentals, and neglecting basic risk control.

Learning from the Past, Part 4

Learning from the Past, Part 5a [Institutional Bond Version]

In this series, I disclose my WORST investing mistakes ever.  Personal errors: cellular auctions, mistiming small cap value, and small deal arbitrage.  Professional error: Manufactured Housing Asset Backed Securities — Mezzanine and Subordinated Certificates.

Smell the burning money!

The “Secret” of Berkshire Hathaway

You can’t imitate what they do, because you would have to tear up everything you are doing now.

One Potential Weakness of Berkshire Hathaway

Reserving is weakening, new places to find float are few, and if policy on asbsetos settlements changed, BRK could be in a world of hurt.

From Stream to Shining Stream

How a stream of excess income during working years becomes a stream of income in retirement years.  It’s harder to do than you might expect.  Includes a list of strategies and pitfalls.

2000 More Points To Go; Look Elsewhere!

Even today, the NASDAQ Composite still hasn’t hit an inflation adjusted high.

On Bitcoin

I feel stronger about this than when I originally wrote this.  Bitcoin and the other cryptocurrencies are just a speculative crapshoot, and the attempt to have a currency without the legal structure of a government will fail, unless it is a commodity like gold.  Also, the blockchain is an overrated resource hog that lacks the flexibility possessed by life insurance company policy management systems.

On Negative Interest Rates

Explains why they exist, and what dangers could come from them.

An Idea Whose Time Should Not Come

Financial complexity should usually be avoided, particularly with financial guaranty schemes.

We Don’t Need To Be Able To Short Private Companies

Like the prior article, there are people with too much time on their hands thinking up nutty and useless ideas.  There is enough risk in the world already; we don’t have to add to it.

The Bond Market Tells The Fed What To Do, Not Vice-Versa

Sometimes we forget that the collective lending and borrowing decisions of the US bond market are more powerful than the Fed.

Index Investing is not Inherently Socialistic

I think active managers have to grow up and accept that passive investing isn’t evil; it just cuts against the economic interests of active managers like me, at least for now.  When it gets really big, the paradigm will shift…

On Being A Forced Seller in a Panic

Very few people want to panic, and fewer want to sell at the bottom — but many do just that.  How can you avoid it?

Why Life Insurers, Defined Benefit Plans, and Endowments Invest Differently

How investing differs for investors that have different types of long-duration liabilities to fund.

Fade High Price-Sensitivity Assets in Crude Oil

A short and lonely post where I told you in advance that crude oil would hang around $50/barrel “for a few years.”  And, my reasoning was on target as well.

Simple Stuff: On Bid-Ask Spreads

Do you have basic concepts that you want to have explained?  Shoot me an email, and if I think enough people would be interested, I will do it.