Industry Ranks March 2012
I’m working on my quarterly reshaping — where I choose new companies to enter my portfolio. The first part of this is industry analysis. 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...
Book Review: Pandora’s Risk
This is two books in one, and very well done. The main part of the book explains risk and uncertainty in general terms, such that most people can understand it. But for those that can deal with complex math, the latter part of the book offers a lot of additional firepower. Risk is a tough...
The Best of the Aleph Blog, Part 14
This period of the Aleph Blog covers May through July of 2010. The one big series that I started in that era was “The Education of a Corporate Bond Manager” series. The idea was to describe how a neophyte was thrust into an unusual position and thrived, after some difficulties. The Education of a Corporate...
The Anti-Consultancy Consultancy
I’ve had this idea for 15 years or so, but forgot about it until I sat down and talked with a friend who worked for a dysfunctional company that recently let him go. My experience working in corporate America is that the best and most effective firms listen to their employees, and set up some...
At the Local Investment Research Challenge
Yesterday I was a judge (one of five) for the Washington/Baltimore Investment Research Challenge. Five teams from local colleges participated to analyze a prominent local company, Under Armour. (My kids love the stuff, I hate to pay the price.) I have to say that I admire all of the young men and women who presented...
On Fourth Quarter 13Fs
I often look through 13F filings to get investment ideas. The last time I did it, one of my readers asked a question like this: It’s nice to see how large the positions are of the investors that you track, but wouldn’t it be better to track the changes in positions? After all, new allocations...
Thinking about the Insurance Industry
Recently I decided to spend some time analyzing the insurance industry. It’s a different place today than when I became a buy-side analyst nine years ago. Why? First, for practical purposes, all of the insurers of credit are gone. Yes, we have Assured Guaranty, and MBIA is limping along. Old Republic still exists. Radian and...
Recent Sorted Tweets
Finance Business Breaking Ranks: Former Broker Turns Bomb Thrower http://t.co/q1vpz9dh @reformedbroker interview previews his book: http://t.co/Yigg2sEE $$ Feb 24, 2012 Why CLO managers continue to struggle http://t.co/a13j8jVG Low issuance, warehousing is tough, need more subordination, fewer senior buyers Feb 24, 2012 My Favorite Quote from Baupost’s 2011 Annual Letter http://t.co/VOvbqab3 DIstressed bond mgrs get...
Book Review: Acts of God and Man
Do you want to read an entertaining book about risk and insurance? Right, I know that it is not likely that anyone could do that, but this book succeeds at the the task. How does it do that? 1) It approaches the topic without using a lot of math. 2) It introduces you to...
Expensive High Yield
I’ve seen a number of articles recently arguing that high yield bonds are still cheap. Today I began an investigation to analyze this claim. Here’s my bias: at the first investment shop I worked in, the high yield manager told me that there is a nominal yield for high yield bonds which reflects the risk. ...
On Multiple Asset Allocation Methods
From a reader who is a dear friend of mine: There are obvious many disparate approaches to asset allocation. Similar to the disparate approaches of any style of investing, each asset allocation approach has its own particular pitfalls. Some of these you can plan for and perhaps hedge against or at least mitigate the potential...
Against Risk Parity, Redux
Here are two articles to read on risk parity: Pro: Pick Your Poison Con: The Hidden Risks of Risk Parity Portfolios I’m on the “con” side of this argument, because I am a risk manager, and have traded a large portfolio of complex bonds. For additional support consider my article Risks, Not Risk. Or read...
