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David Merkel

Good, Not Average, Not Great

I was reading through The Wall Street Journal’s Daily Shot column, done by the estimable @SoberLook, and saw the following graph and text:The S&P 500 move this year is completely outside the historical seasonal trends. Graph Credit: Deutsche Bank via @SoberLook at The Wall Street JournalAverages reveal, but they also conceal.  When I look at a graph like this, I know that any given year is highly likely to...

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Everyone Needs Good Advice

Picture Credit: jen collins===================================================I am a fiduciary in my work that I do for my clients. I am also the largest investor in my own strategies, promising to keep a minimum of 80% of my liquid net worth in my strategies, and 50% of my total net worth in them (including my house, etc.).I believe in eating my own...

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Book Review: The Difference

In general, I don’t like books on personnel management.  That’s mostly because good management techniques are mostly obvious, and there are typically a lot of good strategies that are somewhat different, and most of them will work, if applied with a little common sense.  Pick one.  Apply it.  Be consistent.  Get feedback.  Adjust.  Repeat.No one has the &#...

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Problems with Constant Compound Interest (6)

Doctored Photo Credit: Marvin Isidore Macatol || And I say this is heresy!=================================My last post produced the following question:What if your time horizon was 60 years? Would a 5% real return be achievable?I am answering this as part of an irregular “think deeper” series on the problems of modeling investment over the very long term… the last entry was roughly six years ago.  It’s a good series ...

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Two Questions on Returns

Picture Credit: Valerie Everett============================================I recently received two sets of questions from readers. Here we go:David,I am a one-time financial professional now running a modest “home office” operation in the GHI area.  I have been reading your blog posts for a couple years now, and genuinely appreciate your efforts to bring accessible, thoughtful, and modestly stated insights to a ...

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The Financial Report of the United States Government 2016

Composition of Liabilities 1994-2016=================================================The last time I wrote about this was four years ago.  I have covered this topic off and on for the last 25 years.  As usual, the report got released during a relatively dead time, January 12th, where most people were listening to the preparations for the inauguration.  I’ll give them some credit though — not as much of a dead time...

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Streaking Into the Record Books?

Well, this market is nothing if not special.  The S&P 500 has gone 84 trading days without a loss of 1% or more.  As you can see in the table below, that ranks it #17 of all streaks since 1950.  If it can last through February 27th, it will be the longest streak since 1995.  If it can last through March 23rd, it will be the longest streak since 1966.  The all-time record (since 1950) would take us all the way...

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Steeling Themselves For Pension Benefit Cuts

Photo Credit: Tony Hisgett || Only 20 years more and I can retire with a full pension!========================================================Aside from the bankruptcy of a plan sponsor, the benefits of someone being paid their pension can’t be cut.  Right?Well, mostly true.  With governments in trouble, benefits have been cut, as in Rhode Island, Detroit, and a variety of other places with ...

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The Band Marches On

Photo Credit: Mike Morbeck || On Wisconsin! On Wisconsin!=============================================================It was shortly after the election when I last moved my trading band.  Well, time to move it again, this time up 4%, with a small twist.  I’m at my cash limit of 20%, with a few more stocks knocking on the door of a rebalancing sale, and none near a rebalancing buy.  (To decode this, you can...

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Redacted Version of the February 2017 FOMC Statement

Photo Credit: eflon || Ask to visit the Medieval dining hall!  Really!===============================================================December 2016February 2017CommentsInformation received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year.Information received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen ...

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