Author Archive | David Merkel

Redacted Version of the June 2017 FOMC Statement

Photo Credit: Craig Hatfield   May 2017 June 2017 Comments Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen even as growth in economic activity slowed. Information received since the Federal Open Market Committee met in May indicates that the labor market has continued […]

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Why Social Security Should not be Invested in the Stock Market

Photo Credit: Cameron Daigle ====================================== Stocks always return more than Treasury Bonds.  So why doesn’t Social Security invest the trust funds in stocks rather than Treasury bonds? The first reason is simple.  The government wanted Social Security to be free from accusations of favoritism.  Why should public businesses have access to government capital, when private […]

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Estimating Future Stock Returns, March 2017 Update

26 paths, and all of them wrong ======================== I lost this post once already, hopefully it will be better-written this time.  I’ve been playing around with the stock market prediction model in order to give some idea of how the actual results could vary from the forecasts. Look at the graph above.  it shows potential […]

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The Biggest Problems For Investors Today

What could be more à propos to investing than a bubble spinner?   A letter from a “reader” that looked like he sent it to a lot of people: Hello my name is XXX, After looking through your website I have really been enjoying your content. I am also involved in the investing space and […]

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Goes Down Double-Speed (Update 4)

Photo Credit: eric lynch Markets always find a new way to make a fool out of you.  Sometimes that is when the market has done exceptionally well, and you have been too cautious.   That tends to be my error as well.  I’m too cautious in bull markets, but on the good side, I don’t […]

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Sorted Weekly Tweets

Facebook & WhatsApp   Rags-To-Riches Tale Of How Jan Koum Built WhatsApp Into Facebook’s New $19B Baby http://t.co/bJs6kQrlMx Background on WhatsApp founders $$ Feb 22, 2014 WhatsApp Shows How Phone Carriers Lost Out on $33B http://t.co/3gOutvRDzK Perhaps consortium of telephone companies should have bot them $$ Feb 22, 2014 Whatsapp and $19B http://t.co/TWI44XfTOC Explains why […]

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Industry Ranks February 2014

My main industry model is illustrated in the graphic. Green industries are cold. Red industries are hot. If you like to play momentum, look at the red zone, and ask the question, “Where are trends under-discounted?” Price momentum tends to persist, but look for areas where it might be even better in the near term. […]

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There are Limits to Valuations

Every now and then, some will argue that there are no limits on valuations.  This tends to happen in bull markets.  We are getting that now. This sentiment is sometimes due to ignorance, because bull markets encourage cheerleaders.  There are few who will oppose a bull market, though many who will talk about it after […]

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Where to Find Data

Here’s another letter from a reader: Hi David, I have been a long time reader of your blog but writing for the first time. To me a key part of the investment process for a generalist investor has to be a way to efficiently screen stocks to generate  investment ideas and also measure historical returns […]

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Why Buy Convertible Bonds?

I sometimes answer questions for those at Klout.com that ask basic investing questions.  Usually I point to old articles of mine, but this time someone asked a question that I have not answered before, and here it is: What’s a convertible note? I’ve Googled for the answer but can’t find a simple answer. Why would […]

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