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The Coming Bear Market: Part II How to Prepare
Issue #492, October 16, 2017

Some Observations on Cemeteries
Issue #Interim Bulletin #491A, October 12, 2017

The Coming Bear Market: Part I: The Myth of Buy and Hold Forever
Issue #491, October 09, 2017

The Market makes New Highs
Issue #490, October 02, 2017

The Importance of a New High
Issue #489, September 25, 2017

A Little Insurance: Wealth, War and Wisdom
Issue #488, September 18, 2017

Some Observations
Issue #487, September 11, 2017

How to be Successful in Your Career
Issue #486A, September 07, 2017

How NOT to Buy a Home
Issue #486, September 04, 2017

This Week in the Market
Issue #485, August 28, 2017

Is the “Trump Bump” Running Out of Gas?
Issue #484, August 21, 2017

Gold is on the Move
Issue #483, August 14, 2017

The Importance of Estimation
Issue #482, August 07, 2017

Buying Art and Collecting: Part II of II
Issue #481, July 31, 2017

Buying Art and Collecting in General, Part I of II
Issue #480, July 24, 2017

Physicians need to be More Forceful: Follow-up
Issue #479, July 17, 2017

Physicians need to be More Forceful
Issue #478, July 10, 2017

Your First “Real” Investment
Issue #477, July 03, 2017

Leasing a Watch: Don’t
Issue #476, June 26, 2017

The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017

Student Loans: But Wait, There’s More!
Issue #452, January 13, 2017

A Second Home
Issue #Interim Bulletin #451A, January 04, 2017

The Consumer Confidence Index
Issue #451, January 02, 2017

Social Security
Issue #450, December 26, 2016

My Outlook for 2017: Part II of II
Issue #449, December 19, 2016

My Outlook for 2017: The Market
Issue #448, December 12, 2016

Medicine in 20 Years
Issue #447, December 05, 2016

Higher Interest Rates
Issue #446, November 28, 2016

Trump and the Markets: The Bad and Ugly
Issue #445A, November 23, 2016

Trump and the Markets: The Good
Issue #445, November 21, 2016

Negative Trends: The Suits aren’t Makin’ Steel
Issue #444, November 16, 2016

The New DOJ Fiduciary Rule
Issue #443, November 07, 2016

Barron’s Conference, Part IV of IV
Issue #442, October 31, 2016

Barron’s Conference, Part III of IV
Issue #Interim Bulletin #441A, October 26, 2016

Barron’s Conference, Part II of IV
Issue #441, October 24, 2016

Barron’s Conference, Part I of IV
Issue #440, October 20, 2016

This Newsletter
Issue #439A, October 12, 2016

Memoirs of US Grant: Vol II
Issue #439, October 10, 2016

More Points on Collecting, Investing and the Economy
Issue #Interim Bulletin #438A, October 05, 2016

Personal Memoirs of US Grant
Issue #438, October 03, 2016

Ideas for a High School Part-Time Job
Issue #Interim Bulletin #437A, September 29, 2016

Collecting, Investing, and the Economy
Issue #437, September 26, 2016

Free College
Issue #436A, September 22, 2016

A Military Commitment to Pay for Med School
Issue #436, September 19, 2016

When a CD isn’t a CD
Issue #435, September 12, 2016

I Made a Mistake
Issue #Interim Bulletin #434A, September 07, 2016

What is Your Spare Time Worth?
Issue #434, September 05, 2016

Credit Cards and Bonus/Loyalty Points
Issue #433, August 29, 2016

The Write-off of Student Loans
Issue #Interim Bulletin #432A, August 25, 2016

412 Retirement Plans
Issue #432, August 22, 2016

Join the Club
Issue #Interim Bulletin #431A, August 18, 2016

The Case for Precious Metals and Hard Assets
Issue #431, August 15, 2016

When the US went off the Silver Standard
Issue #430, August 08, 2016

Why NOT to Open a Restaurant
Issue #429, August 01, 2016

Some Tips on Life Insurance
Issue #428, July 25, 2016

More Observations on Negative Interest Rates
Issue #427, July 18, 2016

Issue #426, July 11, 2016

Is a PhD Worth It? Part II of II
Issue #425, July 04, 2016

Is a PhD Worth It? Part I of II
Issue #424, June 27, 2016

Avoid Part-time real Estate Agents
Issue #423, June 20, 2016

Issue #422, June 13, 2016

The Problem with Auction Reserves
Issue #421, June 06, 2016

Make Full Use of Your Capital Investments
Issue #420, May 30, 2016

The Fed’s Announcement
Issue #419, May 23, 2016

Quit While You’re Ahead: A True Story
Issue #418, May 16, 2016

The Precious Metals
Issue #417, May 09, 2016

Negative Secular Trends: Part Ii of II
Issue #416, May 02, 2016

Negative Secular Trends: Part I of II
Issue #415, April 25, 2016

Not Winning is not the same as not Losing
Issue #414, April 19, 2016

Behavioral Economics: Part II: Weaknesses
Issue #413, April 11, 2016

Behavioral Economics: Part I: Valid Points
Issue #412, April 04, 2016

The Most Important Books I’ve Read
Issue #411, March 28, 2016

Secret to Success: Take Risks and do Things Differently
Issue #410, March 21, 2016

The Over-Priced Food Presentation Hustle
Issue #409, March 14, 2016


By Robert M. Doroghazi, M.D., F.A.C.C.

A Military Commitment to Pay for Med School

Issue #436, September 19, 2016

    If I had it to do all over again, I would strongly consider taking on a Service commitment to fund my medical education.
    The average student graduates college with about $28K of student loans, so let’s assume everyone has this amount of debt when they start med school. There are 2 main options for a student who takes on a Service commitment to fund their education. One is to attend the Uniformed Services University of the Health Sciences in the Washington, DC area. The other option is to attend a regular medical school and the military pays the bills. The details are different, but for this discussion, the finances are similar: the government covers your tuition and fees.
    Medical schools gladly accept such students. About 5 years ago, I asked Dr. Holly Humphrey, the long-time Dean of Students at the U. of Chicago, Pritzker School of Medicine, if they had any med students on a GI plan. She said they had one at the time, and quickly added that med schools love them. 1) The government pays no questions asked full-bore tuition and fees, and 2) the school does not have to divert any of their scholarship or loan money to the student.
    Whether a student attends the USU of HS or a regular med school, they receive a monthly stipend which is quite substantial, and can be as high as $60K per year. The result is that at the end of their medical education, the non-military student has an average of $178K of student loans. By definition, someone in this much debt will have essentially no savings, and about one-quarter have other debt, such as credit cards (Allow me to make a point that I always make here: no matter how old you are, or where you are in life or your career, if you have credit card debt, you are in trouble).
    The student with the military commitment will presumably have the same amount of undergrad loans ($28K), but should have no further debt from med school. In addition, if they were thrifty, they should have a nice cushion of savings. I know a young man who graduated the U of Mo. and had sufficient savings to pay cash for a new vehicle at the time of graduation. If your spouse works, you can have even more money in the bank.
    In the end, a student who has taken on a military commitment to fund their medical education will be $150K ($178K-28K) plus $50K (their savings plus no other debt) = $200K ahead of their non-military contemporary at the time of graduation. If an indebted medical student marries another indebted medical student, these numbers are doubled.
    Of course, this is only half the story: you also have the privilege to serve your country. Looking back, if there is one thing about my adult life I could change, it would be to serve in the Military. I have so much respect for those who have served our country. It just never came along for me.
    Of course there are many details, including options for training and how long a commitment you owe the military, but if I were currently a college student contemplating a career in medicine, I would strongly consider a Service commitment to fund my medical education. You will end up almost a quarter of a million dollars ahead, debt won’t be controlling your life (Remember: debt = slavery. The Federal Reserve notes that student debt affects major life decisions, such as marriage, career choice, having children and buying a home), and you will be proud that you served our country.
    In the near future, I’m going to do a newsletter on Libor: London interbank offered rate. It’s what banks charge to lend to each other. It has really popped over the last several weeks and months, suggesting some strain in the credit markets.
    Every week Barron’s lists the Confidence Index: “High grade (bond) index divided by intermediate grade index”. When people have less confidence, the interest rate on lower quality (intermediate grade) bonds goes up faster. Since this is the denominator, the Confidence Index falls. One year ago it was 75.4, last week 69.0, and this week 65.8.
    RMD comment: That a pretty big change (drop), and bears watching.
    On Wednesday, I’m going to do an Interim Bulletin on collectables.
    Wells Fargo (WFC) has been fined $185M for fraud.
    RMD comment: there are always some bad apples, but this was pervasive, institutional fraud. WFC has only a small presence here in Columbia, and I have no deposits with them. If I did, I would pull them, and I wouldn’t deal with them. There are so many honest bankers out there, it’s not worth taking a chance. Berkshire Hathaway is WFC’s largest shareholder. You can be sure Buffett is not a happy camper after a loss of more than $1B in the stock. I’d throw all of the bums out.
    JP Morgan was questioned before the Pujo Congressional Committee by lawyer Samuel Untermyer. “Is not commercial credit based primarily on money or property”?
    Morgan: “The first thing is character”
    Untermyer: “Before money or property?”
    Morgan: “Before money or anything else. Money cannot buy it…Because a man I do not trust could not get money from me on all the bonds in Christendom”.
    RMD comment: when you have integrity, nothing else counts. When you don’t have integrity, nothing else counts.
    The US is suing Deutsche Bank (DB) for $14B over their actions during our sub-prime crisis. DB is down about 40% this year alone and about 60% from this time last year. The current market capitalization has dropped to $18B. 
    Once in a while when Diane and I are on a trip and stop for gas, we’ll buy a Lottery ticket, then fantasize for the rest of the trip what we would do with a couple hundred million bucks each. That is so much money that if you buy a new car, a new house double to what you have now, new clothes, buy the same thing for your children and your brothers and sisters, take a trip around the world, and give $1M to your favorite charity, you still have a couple hundred million bucks. 
    There was a piece in The Economist a few years ago about playing the Lottery. The player can either let the computer generate a random ticket or choose their own numbers. Some number are chosen more often, such as the “lucky” numbers 7, 11, or 21, or people’s birthdays or addresses, etc. Considering there are 12 months and at most 31 days in a month, the lower numbers are chosen more frequently (buy 2-3% or more) than higher numbers. The winning numbers are generated at random. Every number has an equal chance of winning, but if you play numbers that are chosen more frequently, you are more likely to have to split the prize.
    Their recommendation: if you play—and remember “You can’t win if you don’t play”—let the computer generate your ticket.
    There was a post on Facebook by a man that a bat landed on his shoulder to take a bug. There were numerous follow-up comments about how cute bats were, how this meant luck, how Native Americans thought this was a good omen, etc.
    RMD comment: It is mandatory to avoid all physical contact with bats. Up to 5% of bats are rabid. Over the last 20 years, the vast majority of rabies cases in the US were from bats. Most important are babies and toddlers, anyone who cannot speak or cry out or appreciate they were bitten. If your baby has a bat on them, or a bat is found in the same room, it must be presumed they were bitten. Seek medical attention at once: they will probably need rabies shots. 
    I received as much feedback about my comments in last week’s letter regarding my “uneducated” family as I had received in a long time, so here is another story.
    I was less than a year old (1952). Mom left me with Gma and Gpa Doroghazi for the day to go to St. Louis. Grandpa Doroghazi was sitting on the front porch with me on his knee with some stuffed cabbage on a tin plate. He would cut two pieces with his pocket knife: eat one, then partially chew the second, spit it into the spoon, and feed it to me. Mom was walking back from the streetcar, saw what was going on, and said in Hungarian (Gma and Gpa Doroghazi spoke no English) “Daddy, what are you doing?” He replied, “make him strong like bull”.         

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