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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 Political Contribution as an Investment: Part I of II

Issue #462, March 20, 2017

    I try to talk about things that affect your pocket book, and that you will find nowhere else. I think some of my best newsletters have been “Why NOT to Open a Restaurant“, (Issue #429, 8/1/16), Why Won’t Doctors Pay for Good Advice? (#59, 3/2/09) “What is Your Spare Time Worth (#152, 4/11/11), “Should a Graduating Medical Student Buy a House? No” (#197, 2/20/12), “The Importance of Showing Respect” (#405, 2/16/16), and probably my best newsletter ever “A Wedding as an Investment (#241, 12/24/12)”.
    What should you consider when solicited for a political contribution? About 1/3 of my subscribers are sophisticated businessmen/investors, the other 2/3 are physicians. In the end, the goals of a contribution for both groups are the same: increase your business. 
    The most obvious reason is that you are supporting a person or cause you believe in. That’s nice, it’s one of the beauties of our Liberal Western Democracy, and I strongly encourage it. But let’s get to the nitty gritty.
    Consider an issue that directly affects your pocketbook, like tax rates or tort reform. The more narrow and focused the issue, the more your contribution counts. If your side prevails, a $500 contribution could yield a good return on investment. 
    I believe physicians need to be more politically active. The attorney lobby busts our chops because they donate A LOT more money than physicians. Some may disagree, but I believe the AMA and the specialty colleges have done a very poor job on the political front in representing our interests. 1) Less than 10% of docs in the US are members of the AMA. If the AMA had more clout, as it did post-WW II, membership would be higher. 2) Physician’s remuneration has gone down, down, down, while costly regulations have gone up, up, up. 3) Organized Medicine has their own interests and bureaucracy to protect (see below).
    If you send in a check, you are just a blip on the computer screen. The key to this discussion is going to the fundraisers. A typical scenario: the minimum donation to attend a fundraiser at someone’s home for a candidate for the US Senate or the Governor of your state is $500 (these races cost $10M plus). There are 50 attendees, many of whom have paid much more than you. Ex: to be listed on the invitation as a member of the Host Committee requires a donation of at least $2,500. By definition, the people who sponsor and attend these events have clout, stature, influence and money.

    Here is the point: these people and their families get sick, and at some time they will need a physician—and you want that physician to be you.
    I have more points to make, but there are other issues I want to discuss now to maintain their timeliness, so I’ll finish the discussion next week.
    I use fundamental analysis to determine what to buy, and technical analysis to determine when. Last week Barron’s provided a very positive review on Blackstone Group (BX). They feel it has significant upside and noted the 5%+ dividend. BX has been strong and is on the verge of breaking to a new high. I purchased some this week.

    On Wednesday, the Federal Reserve announced a 0.25% increase in the Fed Funds Rate. Rather than go up, the interest rate on the 10-year Treasury immediately fell 10 basis points, and the US Dollar Index dropped almost a penny.
    RMD comment: Jeff Gundlach, who I have mentioned before, nailed the reason: the 2 most crowded trades were to be short bonds and long the US Dollar. Both were at the top of their range, and people were forced to unwind their positions when they broke the other way. It appears interest will stay lower for longer than thought.
    The bond market is larger, and smarter, than the stock market. Since shortly after the election, the 10-year has been in a tight range of 2.3 to 2.6%. If it breaks lower, it could mean the economy is weakening, which won’t be good for stocks. If it breaks above 2.6%, the higher rates might not hurt at first, but probably will when they approach 3%. 
    Jim Grant of Grant’s Interest Rate Observer is one of my favorites. I reviewed his book The Forgotten Depression: 1921in issues #374 (8/3/15) and 375 (8/10/15). Grant was interviewed on Tuesday on CNBC.
    The latest Consumer Price Index was up 2.7% year-over-year. This was the highest CPI since 2.9% in February, 2012. Grant notes that the inflation estimated by the Billion Point Project (I suggest you look this up on Google) is 3.6%. He feels we are not priced in for inflation. The average rate the US pays on their debt is 1.8%. If interest rates go to 5%, we will be crushed. He feels Trump’s appointees to the Fed will be easy money people (to keep the action going). Low interest rates induce and facilitate temptation.
    Home Builder Sentiment was up 6 points to 71, the highest reading since June, 2005. XHB, an ETF of home building-related stocks, is back to the mid-2015 high.
    RMD comment: 25% of the cost of a new home is permits and complying with regulations and codes. That is not a misprint: 25%. I again believe that Trump’s aim of deregulation of American industry is just as important as tax and entitlement reform. Another tailwind for housing is pent-up demand. Since the housing bust, new home construction has lagged far behind household creation. 
    I asked a very well connected friend what they thought about Dr. Scott Gottlieb, Trump’s nominee to head the FDA. “He is substantive, knowledgeable, and has guts”.
    RMD comment: The lead editorial in Monday’s Wall Street Journal thought that Gottlieb has the potential to be Trump’s most important appointment.
    An 89-year old subscriber renewed his subscription to this newsletter for 2 years.
    RMD comment: that is how I describe confidence.
    I recently met a man who holds an administrative position in Civil Service. I was impressed. I asked one of his employees, who I have known for year, what was her confidential opinion of him. “He backs us up. He pitches in when we’re busy to help the customer. You want to do a good job for him”.
    RMD comment: You will never hear a better description of a good boss.
    From above: Organized Medicine has their own interests to protect.
    About 10 years ago I attended a conference where a presentation was made by the president of a specialty college. Medicine had just suffered another in a long string of major league smackdowns: lower fees, more regulation. He had the temerity, the impudence, to say it would have been worse except for the great job they did.
    RMD comment: I wanted a piece of this guy so bad. He took no questions, and left immediately after the presentation. Can you imagine a commander telling that to Marshall or Eisenhower: they would have been relieved on the spot. 
    In Issue #454 (1/23/17), I made the argument that the most powerful agency of our government is not our military and its nuclear missiles, or the CIA, or the FBI, but the IRS. You do not want these people in your life. A subscriber noted that the revenuers sent 2 agents who spent 3 days reviewing the books at his practice over an issue that amounted to $500 and over which there was a legitimate difference of opinion. The IRS must internally justify their expenses: they want a return on their investment. The time of an agent (who is often an accountant or lawyer) is worth at least $100 per hour.
    RMD comment: It’s hard to understand why they gave this guy so much heat over 500 bucks. I read long ago that one of the reasons there were so many rules in Stalin’s Russia is that everyone was breaking some kind of law and could be prosecuted. A recent piece in the Wall Street Journal made this same point: the more laws, the more potential for prosecutorial abuse.
    2) Another subscriber said that the HIPAA rules are getting totally out of hand. He noted my previous newsletter which talked about the importance of showing respect; always calling patients Mr. or Mrs. or Dr. HIPAA says there can be nothing that another patient could see or hear that would indicate someone is receiving care. Thus when the nurse calls you back from the waiting room, they don’t say “Mr. Jones”, but “John”. The fines are for each offense, and can easily total 5 or even 6-figures.   

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