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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.

Barron’s Conference, Part I of IV

Issue #440, October 20, 2016

    I will tell you straightaway my #1 takeaway from this Conference: Over the next 3-5 years, you will be lucky to realize a return of 5%. Plan accordingly.
    Every year at this time I attend the Barron’s Conference in downtown Manhattan. It is a chance to see and hear some of the most prominent investors in the world. The Barron’s staff is around all day and are quire attentive, compared to many medical meetings, where the speakers are gone immediately after their presentation. I highly recommend it to you.
Edwin Finn
    Finn is Editor and President of Barron’s.
    They are cautiously optimistic: the market is fully valued or soon to be over-valued.
    Hillary will win, whether you like it or not. She will raise taxes, and if she doesn’t cut spending, we will be like Greece in 10-15 years. There is a concern that Trump is too close to Russia. Trump is bad for free trade: history shows that tariffs lead to depressions and wars.
Felix Zulauf
    Zulauf has always been my favorite, and never disappoints.
    There has been a mini bull market in the emerging markets and commodities off the low of 2011. That will peter out next year and they will then drop to their final low.
    Europe: currently strong, but their markets won’t go to a new high. Next year the bear will return and their markets will grind lower from 2018-2020.
    The US: Because we are late in the cycle, there are few opportunities. Trade if you are a good trader. Error on the side of caution, and hold more cash. There will be a medium-term low around or just after the election, then the market will rally to new highs into next year and peak mid-year. There will then be a structural recession, with a grinding decline in the market, similar to 2000-2002. The next big bull market will start in 2020, ignited by government fiscal spending. 
    It will be bad whoever wins the election because neither will make the required changes. They will be a one-term president. This election is average Joes vs. the Establishment, not Democrat vs. Republican. Populism is growing, and the middle class will profit: income from labor will rise, taxes on the rich will rise, and the corporate share of the economy will fall.
    China: bearish because of its policies. They have tightened almost to Maoist times. The economy will fall to 1-2% growth, similar to other mature economies. They would like to but can’t control everything: the currency will give.
    He is bullish on the US Dollar, but for different reasons than most people. The US is the world’s largest importer, but if world trade falls, the US will import less, hurting the exporting economies, and their currencies relative to the Dollar. Our large oil output will also strengthen the Dollar.
    The central banks are starting to understand that negative interest rates don’t work. He believes our Fed is the best, the Bank of Japan is bad, and Draghi and the European Central Bank are the worst. Negative rates destroy capitalism (one of the most important points of the Conference) savings are destroyed, pensions are not funded, insurance companies can’t cover liabilities. Rates will rise into next year.
    Gold: difficult to say. There may be a run to $1,400, but unsure after that. Gold could do well later when the economy weakens.
    Putin is a great politician because he knows what he wants. He is strong because Obama made him strong. He has been very belligerent lately because he knows the US won’t stand up to him until January. Putin wants to control Syria because it controls the flow of natural gas in the Middle East. With this, he can continue to control the natural gas market in Europe. The Russian economy is weak, but the people are used to autocrats: the tsars, then Stalin. They love Putin.
    The 35 year-old bull market in bonds is over. Inflation will rise into next year because of an increase in commodity prices. Our CPI could go to 3%. Populism politics also contributes to inflation. There is more government control, which leads to inefficiencies, which leads to higher prices. 
    Zulauf has 4 personal investments pillars: 1) stocks, 2) fixed-income, 3) gold, and 4) commercial real estate. He holds these for long periods of time, and trades around them (hedges), mostly with futures. Some commercial real estate is looking ripe to short, but this is country by country. The US is over-supplied: you see cranes everywhere.
    Brazil: a mess. Culture is African, very corrupt. Argentina is more European, and he likes the president. Japan: The corporations are now lean and mean. Multinationals headquartered in Japan should do well. The Yen will decline to 125 to the US Dollar.
Scott Black
    Black is a long-time member of the Barron’s Roundtable.
    Our market is very over-priced. Earnings have been down for 6 consecutive quarters. We’re at nosebleed levels because of the Fed and low interest rates. It is an anomaly that companies with the worst earnings are doing the best. Value has underperformed for 10 years, the longest period ever. This will revert, but you must be careful, and make money over time.
    Carnival Cruise Lines (CCL). P/E of 12, not much downside. Very efficient, can pay cash for ships. Low oil prices are a big positive driver. Sophisticated marketing.
    Shire (SHPG): likes a lot. P/E = 12 on next year’s earnings.
    Lionbridge Tech. (LIOX): Translates into more than 100 languages. Ex: MSFT or GOOG need their products or apps translated into Korean. ROI better than 30%.
    Wells Fargo (WFC). Like Mylan (MYL), a tainted brand. He prefers US Bancorp (USB): They are clean, have no overseas exposure, and will do well if interest rates rise.
    Berkshire Hathaway (BRKB). Stock currently at 1.35 book value. Buffett will buy if stock falls to 1.2X book. Currently have $80B in float, so Buffett is on the prowl. Most of Buffett’s purchases over last 5 years have not done well.
    Of Citigroup (C), Bank of America (BAC), and JP Morgan, he prefers JPM.
    Viacom (VIAB). Governance is a disaster.
    The market has a “hair-trigger” relation to the Fed: any talk of increased rates, and the market drops.
    Microsemi (MSCC): P/E 11.5. If you own, would hold.
    Ares Capital (ARCC): has a 10% yield: some risk if rates go up (RMD comment: whenever a dividend is that high, you have to wonder if it will be cut).
    Verizon (VZ): He owns it, but little growth. Intel (INTC): he owns.
    He likes Whirlpool (WHR): legislation against Korean dumping helped, 50% of business is US. P/E next year of 9-10. Good ROI.
    From Jan, 2000 to now, the return on the S&P 500, including dividends, was 4.5%, the worst period ever. For the reasonable future, index funds will return only 5-6%.
    I had a series of 5 Commentaries in The American Journal of Medicine from January through May on “Negative Secular Trends in Medicine”. The 6th, and possibly most important, on “High Hospital Profits” will be the lead Editorial in next month’s (November) issue. The 2nd article, in February, was “High CEO Salaries”.
    A long-time subscriber sent me an article from Crain’s Chicago Business. Health Care Service Corp. is the non-profit parent of Blue Cross & Blue Shield of Illinois and 4 other states. It lost $66M in 2015, down from $282M in 2014. The company cut staff, offered buyouts to many employees older than 50, and outsourced much of its IT Dept. Many of the losses were due to the implementation of Obama-Care.
    HCSC’s top ten executives earned a cumulative $56.7M, 57% more (underline and bold in the original) than the crew earned the year before.
    RMD comment: Is one health care executive worth more to society than 100 RNs? My initial impression was to say “I don’t think so”, but the answer is simply “No”. Increased executive pay not correlated with performance is part of a wider trend in Corporate America. Those 10 execs averaged $5.67M each, which is about what the average physician makes over their entire career ($250K per year x 25 yeas = $6.25M).
    The U. C. Irvine Black Student Union called for a complete ban on the University’s Police Dept. and held signs “Blue Lives Don’t Matter”.
    RMD comment: Such a challenge to the basic fabric of our society is revolutionary Marxism, and we know where that ended. I recommend The War on Cops: How the New Attack on Law and Order Makes Everyone Less Safe (Mac Donald, Encounter Books). 

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