Author: David Merkel

The Dead Model

The Dead Model

The Dead Model How Lucky Do You Feel? -=-=-=-=-=-=- Nine years ago, I wrote about the so-called “Fed Model.” The insights there are still true, though the model has yielded no useful signals over that time. It would have told […]

Fed Minutes

The Fed Minutes are Noise

The Fed Minutes are Noise I wasn’t surprised to hear in the FOMC minutes that members of the committee thought: For these reasons, participants generally saw maintaining the target range for the federal funds rate at 1/4 to 1/2 percent […]

Simple Stuff: What is Risk?

Simple Stuff: What is Risk?

Photo Credit: GotCredit This is another piece in the irregular Simple Stuff series, which is an attempt to make complex topics simple. Today’s topic is: What is risk? Here is my simple definition of risk: Risk is the probability that […]

Risk vs Return — The Dirty Secret

Risk vs Return — The Dirty Secret

I’m thinking of starting a limited series called “dirty secrets” of finance and investing. If anyone wants to toss me some ideas you can contact me here. I know that since starting this blog, I have used the phrase “dirty […]

You Can Get Too Pessimistic

You Can Get Too Pessimistic

Entire societies and nations have been wiped out in the past. Sometimes this has been in spite of the best efforts of leading citizens to avoid it, and sometimes it has been because of their efforts. In human terms, this […]

FOMC Transcript 2008

Redacted Version Of The April 2016 FOMC Statement

Redacted Version Of The April 2016 FOMC Statement by David Merkel, The Aleph Blog March 2016 April 2016 Comments Information received since the Federal Open Market Committee (FOMC) met in January suggests that economic activity has been expanding at a […]

Big Returns, Narrow Doors

Big Returns, Narrow Doors

  Photo Credit: Leslie Archard Every now and then, you will run across a mathematical analysis where if you use a certain screening, trading, or other investment method, it produces a high return in hindsight. And now, you know about […]

OPEC and Game Theory

OPEC and Game Theory

Most games in life are cooperative. Many are competitive. A few are perverse. That’s what the crude oil market is like today. It reminds me of the prisoner’s dilemma. In the prisoner’s dilemma, two parties that would benefit from cooperating […]

Estimating Future Stock Returns, Follow-up

Estimating Future Stock Returns, Follow-up

Estimating Future Stock Returns, Follow-up Idea Credit: Philosophical Economics Blog My most recent post, Estimating Future Stock Returns was well-received. I expected as much. I presented it as part of a larger presentation to a session at the Society of […]

Estimating Future Stock Returns

Estimating Future Stock Returns

Estimating Future Stock Returns Idea Credit: Philosophical Economics, but I estimated and designed the graphs There are many alternative models for attempting to estimate how undervalued or overvalued the stock market is. Among them are: Price/Book P/Retained Earnings Q-ratio (Market […]