Clash of the Financial Pundits: Book Review

Clash of the Financial Pundits: Book Review

Clash of the Financial Pundits: Book Review by David Merkel, CFA of Aleph Blog.

Josh Brown’s last book, Backstage Wall Street, was four books in one.  This book, Clash of the Financial Pundits, is three books in one.  The authors cover three things:

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  • Punditry in history
  • How to understand modern pundits
  • Interviewing modern pundits

I will take them in that order:

Punditry in history

Clash of the Financial Pundits covers the following eras in punditry:

  • The Crash that Started the Great Depression
  • The South Sea Bubble
  • Joe Granville
  • Harry Dent, Charles Kadlec, Dow 36,000
  • Martin Zweig
  • Jim Cramer was right during the 2008 crash

Roger Babson warned people about how high the stock market was, while Irving Fisher talked about stocks hitting a “permanently high plateau.”  The South Sea Bubble had many in the 1700s media stoking the flames of speculation.  Joe Granville was hot stuff in the late ‘70s and early ‘80s, but was dead wrong the rest of the time.

Harry Dent, Charles Kadlec, and the crew that put together Dow 36,000 created their own sensational predictions which proved to be controversial and very wrong.  Martin Zweig was right about the 1987 crash, while Jim Cramer controversially was right during much of the 2008 crash.

How to understand modern pundits

Then comes the basic advice to help us weather the storm of advice that floods the media.  The main topics are:

  • How to use financial media intelligently?
  • Need for humility
  • Hedge fund managers that talk to the public
  • People who act certain attract belief
  • Wall Street maxims often contradict each other
  • Making predictions that are squishy (surprises lists)
  • There are no experts

Using financial media intelligently means limiting the intake, and limiting its effect on you.  We must be humble in what we understand and accept, and we should listen to those that are humble in what they say.

When hedge fund managers speak publicly, realize that they are speaking their own interests.  They may not be right.  Also, those who speak with certainty on TV tend to attract more belief than those who are more humble and nuanced.

There are many soundbites in financial television, radio and writing.  For every maxim, there is a counter-maxim.

There is an art to making predictions that can’t be falsified, such as surprise lists.  It would help us all if we all realized there are no experts in investing, and that even includes me.

Interviewing modern financial pundits

Jeff Macke, Josh’s Co-author interviews the following pundits:

  • Jim Rogers – former manager of the Quantum Fund, author of many books.
  • Ben Stein – speechwriter for Nixon, written a scad of books, etc.
  • Karen Finerman – founder, owner & head of Metropolitan Capital, on CNBC’s Fast Money
  • Henry Blodget – Internet stock analyst 1998-2002, and now the editor and CEO of The Business Insider, a business news and analysis site, and a host of Yahoo Daily Ticker, a finance show on Yahoo.
  • Herb Greenberg – wrote for the San Francisco Chronicle’s business section, for, and has appeared on CNBC many times.
  • James Altucher – Entrepreneur and blogger.  He contributes content in many journalistic outlets.
  • Barry Ritholtz – Writes for and his own popular blog.  Also writer of the excellent and early crisis book Bailout Nation.  Josh Brown works with him at their firm.
  • Jim Cramer – Former hedge fund manager, founder of, host of the show Mad Money which appears on CNBC.
  • Jeff Macke – Josh’s co-author, currently working for Yahoo Finance, who relates a tale of when he screwed up badly as a pundit.

These are good interviews, and it gives the readers an internal look as to what it is like to be in front of the media, particularly amid controversy.  Each of the nine interviews sheds light on being a pundit, but in different ways.

Jim Rogers has talked about macro issues, and with a varied track record in the short-run.  Ben Stein has said many controversial things over time.  Karen Finerman has the story of being invited onto CNBC’s Fast Money, and taking a sip from the firehose as the first woman, one with no TV experience, and surviving.

Henry Blodget goes through his errors in the Internet Bubble, and how he has found redemption in writing about finance.  Herb Greenberg, the consummate skeptic, describes what it is like to take unpopular positions versus popular stocks.  James Altucher oozes blood over much of what he writes, telling of his own failures and successes in excruciating detail.

Barry Ritholtz, skeptic par excellence, describes the attitudes of interviewers, and the limited range of thought they have.  He delights in giving them answers that trouble them, like, “I don’t know.”

Jim Cramer is perhaps the most controversial of all.  I have known him, albeit distantly for 15 years.  He is very bright, but falls into the trouble of making too many predictions.

And so it is for most pundits.  Amount of predictions is inversely proportional to their quality.

The last “interview” is where Jeff Macke relates a failure of his on CNBC, tells a story of how pundits are human.  They have stresses in their lives.  They make mistakes.  They are people, humans, like you and me.


This is a good book, and will educate average people regarding financial media.  You will see the financial media from an insider’s view. If you want that, you can buy it here: Clash of the Financial Pundits.

Full disclosure: I received an advance copy of the book via NetGalley.

If you enter Amazon through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip.  Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned Clash of the Financial Pundits.  Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.  Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.  Whether you buy at Amazon directly or enter via my site, your prices don’t change.

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David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I 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. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me 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 I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.
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