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 [...]
About David Merkel
2010-present, David is working on setting up his own equity asset management shop, tentatively called Aleph Investments. From 2008-2010, he was the Chief Economist and Director of Research of Finacorp Securities. He did many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, he 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. He also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, he was a leading commentator at the investment website RealMoney.com. His background as a life actuary has given him 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 he deals with in this blog.
All of these goals rely on the help of Jesus Christ and his readers.
On Sovereign and Quasi-Sovereign Risks
May 17, 2012 By 1 Comment
I wrote the following on December 1st, 2009: -==-=-=-=-=-=-=-=–==–==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- I like investing internationally, because of the diversification it offers, both in stocks and bonds. Or, think of it as a hedge. Will the American Experiment continue to prosper? We have come a long way from the Founding Fathers, and more than half of it is [...]
The Right Reform for the Fed
May 16, 2012 By Leave a Comment
I wrote the following on November 28th, 2009: =–==-=-=-=-=-=-=-=-=-=-=-=–==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Ben Bernanke has an editorial in the Washington Post that attempts to defend the Fed. Here is my discussion of his editorial: These matters are complex, and Congress is still in the midst of considering how best to reform financial regulation. I am concerned, however, that [...]
Notes from Recent Travels
May 14, 2012 By Leave a Comment
I wrote the following on November 21st, 2009: -===–==-=-=-=-=-=–=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Before I begin this evening, I would like to comment on my absence for the last week. I gave a talk on Friday to the Southeastern Actuaries Conference. I found myself behind the eight-ball, because of my many other projects, and so I had to block [...]
How to Regulate the Banks, and other Financials
May 12, 2012 By Leave a Comment
I wrote the following on November 11th, 2009: =–=-==–=-=-==–==-=-=–==-=-=–=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=–= At the Treasury meeting, I commented that the insurers were better regulated for solvency than the banks. One of the reasons for that is that they do harder stress tests, and they look longer-term. So, if one is trying to regulate banks for solvency, there are [...]
My Visit to the US Treasury
May 10, 2012 By Leave a Comment
On Bond Investing, ETFs, Indexes, and the Current Market Environment
May 9, 2012 By Leave a Comment
I wrote the following on October 29th, 2009: =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Bond indexes are what they are. They represent the average dollar invested in the bond markets. Those that say that the indexes are flawed miss the point. Indexes represent the average return of an asset class, with all of its warts and wrinkles. That is the [...]
Pension Apprehension
May 9, 2012 By Leave a Comment
I wrote the following on October 10th, 2009: -=-=-=–=-=-==-=-=-=-=-=–==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- I have a bunch of pieces “ganged up” to go on real estate, international economics, government policies, market risks, and a book review on “Think Twice,” but tonight the topic is pensions, with a side order of Bill Miller. Hopefully I will get to the other [...]
Buffett Musings
May 8, 2012 By Leave a Comment
Buffett made a few comments over the weekend that I thought were significant. Warren Buffett, who built Berkshire Hathaway Inc. (BRK/A) with stock picks before focusing on takeovers, said he recently opted against a $22 billion acquisition because he didn’t want to sell investments in marketable securities. (Article here) and Berkshire Hathaway Inc is adding [...]
The Good ETF
May 7, 2012 By Leave a Comment
I wrote the following on October 9th, 2009: -==–=-==–=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- What makes a good ETF in the long term? My, what a question, driven by the ETFs challenging the limits of what is prudent. Maybe it is easier to start with what makes a bad ETF, then: Headline risk can be eclipsed by credit risk. All [...]
