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Publication Name: The Aleph Blog

Brief description: Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control

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Owner Name: David J. Merkel

Joined: August 20th, 2011

Activity

The Aleph Blog wrote a new blog post titled The Permanent Portfolio

==========================================I will admit, when I first read about the Permanent Portfolio in the late-80s, I was somewhat skeptical, but not totally dismissive.  Here is the classic Permanent Portfolio, equal proportions of:S&P 500 stocksThe longest Treasury BondsSpot GoldMoney market fundsThink about Inflation, how do these assets do?S&P 500 stocks – mediocre to pretty goodThe longest Treasury Bonds – cratersSpot Gold – soarsMoney market funds – keeps value, earns incomeThink about Deflation, how do these assets do?S&P 500 stocks – pretty poor to pretty goodThe...
(8 days ago)

The Aleph Blog wrote a new blog post titled Redacted Version of the March 2017 FOMC Statement

Photo Credit: Norman Maddeaux====================================February 2017March 2017CommentsInformation received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace.Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace.No real change.Job gains remained solid and the unemployment rate stayed near its recent...
(12 days ago)

The Aleph Blog wrote a new blog post titled Estimating Future Stock Returns, December 2016 Update

What a difference a quarter makes!  As I said one quarter ago:Are you ready to earn 6%/year until 9/30/2026?  The data from the Federal Reserve comes out with some delay.  If I had it instantly at the close of the third quarter, I would have said 6.37% — but with the run-up in prices since then, the returns decline to 6.01%/year.So now I say:Are you ready to earn 5%/year until 12/31/2026?  The data from the Federal Reserve comes out with some delay.  If I had it instantly at the close of the third quarter, I would have said 5.57% — but with the run-up in prices since then, the returns decline...
(13 days ago)

About:

David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments.  It is possible that I might do a joint venture with someone else if we can do more together than separately.

From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities.  I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies.

Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm.

From 2003-2007, I was a leading commentator at the investment website RealMoney.com.  Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better.  I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution.  After three-plus year of operation, I believe I have achieved that.

Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life.

My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog.

I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.

Blog Objectives

My objectives in this blog are relatively simple:

  • To further flesh out my thoughts from RealMoney, and provide for a greater degree of interaction with readers there.
  • To interact more broadly with the blogosphere, adding my own distinct ideas to the mix.
  • To develop an investment management shop. Initially, this would be institutional money management on a “long only” and hedged basis. Eventually, I would create a mutual fund so that smaller retail investors can invest with me. I would try to buy up a failed mutual fund shell, allowing a way in that is cheaper, and providing tax-sheltered gains to early investors. But all of this is a dream that might not be realized. Until then, I can tell you about managers who manage money in a way similar to mine.
  • All of these goals rely on the help of Jesus Christ and my readers. I thank you for taking the time to read what I write.