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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 Story From Vegas

Issue #454A, January 25, 2017

    It looks like the DJIA, S&P 500 and NASDAQ will all close at a record high today. The VIX (Volatility Index) dropped to a multi-year low. This is all very bullish action, and will be discussed in detail in the weekend’s newsletter. It appears the market believes Mr. Trump when he says he will cut regulations by 75%. 
    I was sitting at the bar in a restaurant in Vegas for lunch and overheard snippets of a conversation. Please read on, because I believe a man was being set up for a big con.
    Floyd was facing me and doing all of the talking. He looked about 34-37, shaved head, stubble growth, 5-10 and 220 pounds of solid muscle: this guy was built like a tank. Nice long-sleeve shirt. Jerry looked a little younger, maybe 30-32, a black, short beard, wearing a hoodie with hood down and a baseball hat. Unfortunately, he was facing away from me, so I didn’t get a good look at his face or overhear much he said. They were there before I came and there when I left about 30 minutes later. They each had a drink, but there was no food.
    This was not a conversation between equals. Nothing struck me to suggest they were merely friends. There was never a smile or a joke. This was not a mentor-pupil conversation. It was not meant just to relay information, as when one asks the opinion of an expert. It was not a legitimate type of salesman-customer conversation. These are factual, appropriately optimistic for the product, and often quite low key. The best salesman I ever saw had a rule never to be the first one to talk about the product. The customer would always say “OK Steve, let’s get down to business.”
    Floyd wanted to be convincing, but was not over-the-top like a tent revival televangelist. He was slightly overbearing, and wanted to dominate Jerry without Jerry knowing it. He was a touch braggadocios. There was no name-dropping. This was not a sexual seduction. He was a little mesmerizing, and meant to impress but at the same time to instill some doubt and also a little fear.
    Several words I overheard were insurance, malpractice and lawsuit. I sure hope neither was a physician: Nothing about them struck me as having the bearing, personality or intellectual gifts to be an MD. Several times Floyd said “investment”.
    RMD comment: The two words that immediately came to mind to describe this scenario were malevolent and sinister. I believe Floyd was setting Jerry up for a con. If someone you know is on your side tells you they have serious doubts about a new acquaintance, please pay attention. Con men are con men because they are manipulative and seductive. Never underestimate their power to do you wrong.
    In black jack, if the dealer has an Ace up, you can make an extra bet called “insurance” against them having a black jack. Their chance of a BJ is 31% (16/51). Insurance pays 2 to 1 (33.3%), so the house has a 2% advantage on your bet.
    Patron: “should I take insurance”?
    Dealer: “If the house offers something, it’s never in your favor”.
    RMD comment: Wow! That is the most truthful thing I have ever heard a casino employee say. Never forget that. The casino is in business because it always wins. This also has general applications: when someone proposes something, your first thought should always be “What’s in it for me”? The more high pressure and slick the salesman (as above), the more you must ask yourself this question. 
    I believe the toughest hand in black jack to play is A-7 vs. the dealer’s 9, 10 or Ace. You have soft 18, a nice but not powerful hand. The most common card in the deck is a 10 (10, J, Q, K), so you must assume the dealer has this and you are beaten. The book say you should take a hit. If you draw a 10, you have hard 18: you’ve not been hurt, but you didn’t improve. A 9 knocks you down to 17: you only win if the dealer busts. 4, 5, 6, 7 or 8 knocks you down to 12-16: now you’re hitting a stiff (you are likely to bust). Your dream cards are a 2 or a 3, giving you 20 or 21.
    I had A-7 vs. 10. The dealer was a Caucasian lady about 55. I always try to engage the dealers in conversation, treat them with respect, and tip for good service (Note: all the casino jobs are minimum wage: 70-80% of their income is tips). When I have this hand, I hesitate, scrunch up my face and lament.
    RMD: “I hate to hit this, but I know the book says you should”.
    When the dealer has a 10 or an Ace showing, they have already checked their hole card to see if they have a black jack: they know what they have. She said “there are only 2 cards that will really help you”. I took that to mean she had a stiff and I should stand and take my chances. Sure enough, she turns over a 3 and goes on to bust.
    RMD comment: treat people nicely and sometimes they will give you break.
    Several weeks ago I discussed the concept of gambler’s ruin to provide analogies for your general investments. I noted the one house advantage you will never overcome is that the house will never run out of money. A subscriber wondered how large a bet the house would be willing to take. For perspective, the market capitalization of Wynn (WYNN) is about $9B. MGM is about $16B.
    RMD comment: I can’t imagine a casino would take bets that even approached 5% of their market cap. Some time ago I read a casino reported lower quarterly earnings because a person won $150M at roulette. Likewise, it’s hard to imagine someone who has accumulated that kind of money would be willing to risk $500M at the tables.             

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