Author Archive | David Merkel

The Prime Directive: Stay Out of the Bottom Quartile

If you are a money manager, you would like to be in the top quartile of managers all of the time, but you know that is virtually impossible.  So you might set a more achievable goal, staying out of the bottom quartile.  Now there are two ways to achieve that: 1) Make intelligent asset selections […]

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Book Review: Code Red

This is a tough book to review.  It is correct in analysis of what went wrong, but overpromises in what its main goal is — protecting assets before the next financial crisis. Let me take a step back, and describe the structure of the book.  A major goal of neoclassical macroeconomics is to try to […]

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Sorted Weekly Tweets

Companies & Industries Ackman Makes Big Bet on Fannie, Freddie http://t.co/PdkKSwbUUq Depends on whether the government will sell it off cheaply if at all $$ Nov 16, 2013 Maersk CEO Says Balancing Supply of Ships to Demand Is Years Off http://t.co/OVUJsS0gpO Will take 2+ years 4 the shipping mkt 2 normalize $$ Nov 16, 2013 […]

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Book Review: The Manual of Ideas

I’m a value investor, and one that is not doctrinaire about a narrow set of principles.  Yes, I like my eight rules, but they are broad principles that admit a lot of flexibility. The Manual of Ideas introduces readers to a wide number of ways to source investing ideas that may offer value.  There are […]

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On Negative Book Reviews

Occasionally, I write negative book reviews.  I am not always right, but sometimes I locate books that are not up to par, or are downright mistaken.  I try to back up my findings with facts, but there is still a problem.  If I publish the negative review at Amazon, it is in the interests of […]

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With Jeremy Siegel at CFA Institute Baltimore

At the CFA Institute at Baltimore, we had the pleasure of having Jeremy Siegel come speak to us this past Thursday.  He was lively, engaging, and utterly convinced of his theses.  Thanks to Wisdom Tree for helping fund the endeavor. He openly asked us to poke holes in his theories.  This article is an effort […]

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It Works, But It Doesn’t Work All The Time

One of the constants in investing is that investment theories are disbelieved, prosper, bloom, overshoot,  die, and repeat.  So is the only constant change?  That’s not my view. There are valid theories on investing, and they work on average.  If you pursue them consistently, you will do well.  If you pursue them after failure, you […]

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The Rules, Part LII

ge + E/P > ilongest bond Let me explain.  The first term is the growth rate of earnings for a company.  The second term is the earnings yield of a company.  The last term is the yield on the longest, most subordinated bond or preferred stock a company has issued. The idea here, is that […]

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A Different Look at Industry Attractiveness

While doing some work today, I ran across this resource from Morningstar. Morningstar values stocks by projecting the free cash flows of the companies, and discounting those free cash at a rate that reflects the riskiness of the company.  Free cash flows are the amount of cash you can take from a corporation over a […]

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Sorted Weekly Tweets

Financial Companies & Lending Markets   Hedge Fund GSO Scores Win With MBIA Bet http://t.co/eMYUgX6Syg Risky bet that paid off; he realized the banks would have2 compromise $$ $MBI Aug 10, 2013 Mortgage Delinquencies Hit Five-Year Low http://t.co/HlfyPTbUAV Judicial states trail non-judicial states as cases drag on $$ Aug 10, 2013 The bailout Wall Street […]

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