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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.

Avoid Part-time real Estate Agents

Issue #423, June 20, 2016

    One of my favorite words is dilettante, which Webster’s defines as “a person who cultivates an art or branch of knowledge as a pastime esp. sporadically or superficially, synonym see AMATEUR”.
    That is how I would describe a part-time real estate agent.
    Somebody’s mother-in-law gets bored, wants to make a few extra bucks, used to work at the bank and has been active in a few local service clubs so feels they know a lot of people, their daughter is an accountant and next door neighbor is in pre-law at the local community college, so they’ve got the financial and legal areas covered, and hear that some agent sold $1.8M of real estate last year by just driving people around and taking them out to lunch or supper. Now how tough can that be? So they decide to sell some real estate in their spare time.
    Or, somebody who already has a full-time job wants to make extra money. They’ve seen the house flipping shows on TV and know they can do it. In Missouri, you have to take 2 courses that total about 64 hours, and take two tests of a few hours each. Thus for a couple of hundred bucks and 2 weeks of your time, you can be a real estate agent. Piece of cake: why didn’t I think of this earlier?
    A very real problem of dealing with part-time agents, especially those who have another full-time job, is getting things done in a timely manner. Selling real estate is a very full-time job, almost like being on call: Houses can be shown and contracts written at any time, day or night, weekends and holidays.   
    The times I’ve bought or sold real estate I’ve always engaged a full-time pro. The good ones know as much about their profession as a physician knows about Medicine. They’ve seen it all. They know what sells and what doesn’t. They can tell you where to price your home and within $1,000 what it will bring. But you don’t listen: and guess what? Two months later there have been no offers. Now you are forced to lower the price more than what it should have been priced at initially, and people are saying “this home has been on the market for 74 days and they’ve lowered the price. There must be something wrong with it”.
    Some time ago we purchased a condo at the Lake of the Ozarks for a full-time rental. Getting the insurance lined up was going a little slower than expected. My agent, who had been one of the biggest sellers at the Lake for decades, called up my insurance agent and instructed him how to set up the policy. It was pretty impressive.
    You have no influence on who is the agent on the other end of the transaction, but when you’re choosing an agent, go with a full-time pro. They can often help “direct” and “advise” the part-time agent how to move things along.
    While I’m talking about selling your home, avoid FSBO (pronounced Fizz-Bow): For Sale By Owner. I can’t imagine that a practicing physician has the time or expertise to sell their own home. Do you really want to take a call in the OR from someone who wants to see your home that afternoon? 
    Last week’s discussion of the VIX appears timely. On Monday (6/13)), the VIX gapped up at the open. At one time on Monday the DJIA turned positive, yet the VIX was still up 5%. Sure enough, the VIX was right. By the end of the day the VIX was up 3.94 to 20.97 (+23.14%, a huge move), and the Dow was down 132 points.
    The interest rate on the 10-year German Bond went negative.
    RMD comment: 1) how will the central banks normalize rates? How will it end? Hard to imagine it will be nice. 2) Negative rates mean there is a lack of confidence in the options for investment available in the private sector. 3) There has been a rush into the dividend-paying stocks. Utilities are at an all-time high: REITs are close. Consumer staples with solid dividends are holding up. If the economy weakens and profits fall, and these stocks are forced to cut their dividends, they will be crushed. Higher interest rates would hurt everything. 
    I suggest:
    Frederick the Great: King of Prussia (Blanning, Random House). A good part of Frederick’s success was because he believed in 1) meritocracy, esp. in the army. About 10% of the generals were the sons of free peasants. 2) The scientific method, esp. in agriculture. 3) Religious tolerance. His treatment of the Jews was variable, but better than in many countries. He treated Lutherans, non-Lutheran Protestants, Catholics and Muslims the same. In my opinion, the most important feature of the most successful societies throughout history is religious tolerance. 
    Imbeciles: The Supreme Court, American Eugenics, and the Sterilization of Carrie Buck (Cohen, Penguin Press). A history of the eugenics movement in the US, which culminated in the abominable Supreme Court decision of 1927 allowing eugenic sterilization, where Oliver Wendell Holmes callously said “three generations of imbeciles are enough”.
    “Professionals and intellectuals were in the forefront of reform movements of the era…So it was with eugenics—it appealed, in particular, to academics and professionals”.
    RMD comment: nothing has changed. The intellectual elites think they know better and still want to tell people how to live their lives.
    The Ordeal of the Presidency: Herbert Hoover in the White House (Rappleye, Simon & Schuster). Hoover was an orphan, and in the first graduating class at Stanford. He was a hugely successful mining engineer, called “The Great Humanitarian” for organizing the food relief in war-ravaged Europe and Russia, and successful Commerce Secretary under Harding and Coolidge. He did a poor job as President for at least 2 reasons: 1) he was perceived as having no sympathy for the unemployed and the hungry. 2) He understood that the problem was the unavailability of credit, and made some quite daring proposals, but the country wasn’t ready to abandon the idea of a balanced budget and the gold standard.
    This is also a very nice discussion about the policy response, or mostly lack of response, of the Federal Reserve, other central banks, and banks in general. Some lessons apply to the current central bank experimentation with negative interest rates.
    Just played in the Seniors event at the World Series of Poker in Las Vegas. I got knocked out in the 6th round. No cards: highest hand in the hole was the first hand—a pair of jacks. Other fellow draws a full house. No Aces, no Kings, no Queens, no A-K.
    There was a break every 2 rounds. You can’t imagine the lines to the men’s bathroom when more than 4,000 50-90 year old guys have 20 minutes to do their business.
    The topic of next week’s letter will be “Is a PhD Worth It”? 

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