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The Dark Side of Student Loans
Issue #528, June 25, 2018

The Cost of Out-sourcing Convenience
Issue #527, June 18, 2018

Social Security: 66 or 70?
Issue #526, June 11, 2018

Student Loans: There’s (Unfortunately) a Lot More!
Issue #525, June 04, 2018

Co-signing a Note
Issue #524A, May 31, 2018

The Knight Frank Luxury Index and Collectables
Issue #524, May 28, 2018

The Importance of Diversification: The Myth of Diversification
Issue #523, May 21, 2018

How to Save Thousands on Your Food Bill
Issue #522, May 14, 2018

MoviePass and Other Things
Issue #521A, May 10, 2018

Degree Inflation, Long Training Periods, and “Certification”  Part III
Issue #521, May 07, 2018

Degree Inflation, Long Training Periods, and Certification” Part II of III
Issue #520, April 30, 2018

Follow-up on Several Things
Issue #519A, April 25, 2018

Degree Inflation, Long Training Periods, and “Certification”: Part I of II
Issue #519, April 23, 2018

The Kids Birthday Party Hustle
Issue #518A, April 18, 2018

A Pension Question: Part II of II
Issue #518, April 16, 2018

A Physician is an Executive
Issue #517A, April 11, 2018

A Pension Question: Part I of II
Issue #517, April 09, 2018

Is the Correction Over?
Issue #516A, April 05, 2018

Used Car Dealers, Student Loans, the Chinese, and Uncle George’s Rule
Issue #516, April 02, 2018

Starter Homes
Issue #515, March 26, 2018

Redecorating: Beware!
Issue #514, March 19, 2018

NASDAQ Closes at Record High
Issue #513, March 12, 2018

A 40% Chance
Issue #512, March 05, 2018

Several Things
Issue #511, February 27, 2018

Human Capital, Education and Wealth
Issue #510, February 19, 2018

Another Stock Market Update
Issue #509A, February 18, 2018

Some Thoughts on Savings
Issue #509, February 12, 2018

A Stock Market Upfate
Issue #508S, February 10, 2018

Who Can You Trust? Part II of II
Issue #508, February 05, 2018

The Christmas Decoration Pre-worn Jeans Hustle
Issue #Interim Bulletin #507A, February 03, 2018

2018 Outlook for Financial Markets
Issue #507, January 29, 2018

Who Can You Trust? Part I of II
Issue #506, January 22, 2018

Life Insurance Settlements
Issue #505, January 15, 2018

Commodities and Buying the Breakout
Issue #504, January 08, 2018

Buffett Wins His Bet
Issue #503A, January 04, 2018

Practice Real Estate and Free Agency
Issue #503, January 01, 2018

Outlook for 2018: Part III: Stocks and Bonds
Issue #502, December 25, 2017

My Outlook for 2018: Part Ii: Precious Metals
Issue #501A, December 21, 2017

Outlook for 2018: Hard Assets: Part I of III
Issue #501, December 18, 2017

More Thoughts on Bitcoin
Issue #500A, December 14, 2017

Fees and Good Relations with Bankers
Issue #500, December 11, 2017

Salvator Mundi
Issue #499A, December 07, 2017

Should You Rent or Own a Home?
Issue #499, December 04, 2017

A Gift Subscription
Issue #Interim Bulletin #498A, December 02, 2017

Stocks vs Real Estate: Asset Allocation: Part II of II
Issue #498, November 27, 2017

When Good Enough is Fine
Issue #497A, November 22, 2017

Stocks vs Real Estate: Asset Allocation. Part I of II
Issue #497, November 20, 2017

The Saudi Arrests and the Perils of Foreign Investing
Issue #496, November 13, 2017

Gambling and Las Vegas
Issue #495, November 06, 2017

Some Tips on Auto Insurance
Issue #494, October 31, 2017

Bitcoin and the Digital (Crypto) Currencies
Issue #493, October 23, 2017

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


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

Credit Cards and Bonus/Loyalty Points

Issue #433, August 29, 2016

    I could make this discussion long and detailed, but I’ll keep it short and tell you my main points straight away: on credit cards, I prefer cash back. And you must always consider the annual fee, restrictions, and all the fine print.
    Two sites that provide information include

  Re: bonus/loyalty points. In the end, how many are redeemed? They remind me of a good politician: you can promise a lot when you might not have to pay up.
    Last Thursday’s Interim Bulletin was “The Write-off of Student Loans”. In today’s Barron’s, Thomas Donlan quotes the same data and comes to the similar conclusions.
    RMD comment: Student loan forgiveness is a disaster. It will encourage students to borrow even more if they know they don’t have to pay it back. So much for thrift. Of course, the taxpayer picks up the tab.
    It appears the correction in the precious metals has begun. To remind you, from the lows in December/January, gold, silver, and the miners have gone straight up. If you believe the bull market in the precious metals has resumed, which I do, when should you establish your positions?
    Here’s what I would consider. These points apply to any correction, not just the precious metals.
    1) A correction is defined as a pullback of at least 10%. Will it be a minimal pullback, maybe not even 10%, or will it be brutal, with prices falling 15-20%? The miners usually move first, both up and down, and are the most volatile: they’ve already pulled back 15%. Silver is next, and is down about 10%. Gold is least volatile, and is down barely 4% from the peak.
    2) A correction can often retrace 50% of the previous move. SLV bottomed at about 13.3, then broke out above 17, to peak about 19.5. What was previously resistance (17), can now become support.
    3) How long will the correction last? Will it be nice to you, last 6-8 weeks, and right on schedule break to a new high, or will it drag on for months?
    4) When prices approach the previous high, they can break straight through to new highs, but often will test the old high, back off slightly, then break out, giving a cup and handle appearance.
    5) Bottom line: if you believe this is a correction, and wish to establish a position, you just need the nerve and step up and buy, knowing that you probably didn’t buy at the exact bottom, and that prices can go lower before turning higher.
    6) The safest time to buy is when the correction is over, when prices break to new highs. You give up some gains, but you are less likely to get clipped, or sit with dead money for months. For reference, the recent highs of SLV were 19.4, SIL (an ETF of the silver miners) 53, GDX (an ETF of the large miners) 31.5, and GDXJ (an ETF of the junior miners) 52.5. 
    A reminder:
Never buy anything at a charity auction!
    That sounds terrible, and it is certainly not my intention that you should not give generously to the charity(ies) of your choice, but this advice will easily save you the cost of this newsletter. At a charitable auction, you can only deduction the amount above the value stated by the donor. Ex: you purchase a stay at a resort in Colorado, with horseback rides, guide for fishing, the whole works. Resale value $3,250. You pay $2,800.
    Sorry Charlie. You can’t deduct one red cent on something you probably wouldn’t have purchased in the first place, but you had a few drinks (I assure you: It’s not a coincidence that the ETOH at charity auctions is free), and wanted to look like a big shot in front of everyone. Just write the charity a check for $2,800: you can deduct the entire amount, and they can sell the item to someone else.
    When I give an item to a charity auction, which is usually a 1-year subscription to this newsletter ($75) and an autographed copy of The Alien’s Secret ($25), I state on the donation letter that I place no value on my donation so they can deduction the entire amount (I have never seen this done by anyone else). 
    Many publically-traded companies offer employees a discount of 10-20% off the share price to purchase the company’s stock for their retirement plan. In general, it’s a good deal: the company and the employees benefit. It is also generally advised to have no more than 5-10% of your money in the company stock, because if the company goes bust, you have not only lost money, you’ve lost your job. A good example is St. Louis-based Peabody Energy. Ten years ago, they were a Fortune 500 company. Since then, the stock has lost 99.9% of its value, and many have lost their jobs.
    What if a tree in your yard falls on the neighbor’s house? The liability, including the deductible (if any), is on the person whose home is damaged. If you think about that, it’s logical. Say a tornado rips up a tree a mile away and deposits it on your home: that’s not the fault of the other person. Also, insurance companies don’t want to get in a fuss with other insurance companies, because for them, things like this even out over time.
    I again recommend The Fall of Heaven: The Pahlavis and the Final Days of Imperial Iran (Cooper, Henry Holt). Khomeini lived in exile in Iraq. Saddam Hussein wanted to eliminate him, but needed the support of the Shah, who said no. It would be like eliminating a Cardinal of the Catholic Church, something that a political leader, even a dictator, couldn’t take lightly. Washington, then as now, grossly underestimated the brutality of Islamic fundamentalism.
    I found The Lynching: The Epic Courtroom Battle That Brought Down the Klan, Leamer, Morrow) very compelling. “The Klan (was an) empire largely of misfits. Many…lived on the fringes of society, and some were sociopathic. They were like Hitler’s paramilitary units…they found an identity, excitement, and purpose…they found nowhere else in life.
    RMD comment: these are the exact kind of people attracted to ISIS, and the ones who are anarchists in general. Grandpa Nagy, in his heavily Hungarian-accented English, couldn’t say Ku Klux Klan. It came out “Cuckoo Clan”, which is quite accurate.
    I started (and stopped) White Trash: The 400-Year Untold History of Class in America. “Lest the reader misconstrue the book’s purpose, I want to make the point unambiguously: by reevaluating the American historical experience, I expose what is too often ignored about American identity. But I’m not just pointing out what we’ve gotten wrong about the past; I also want to make it possible to better appreciate the gnawing contradiction still present in modern American society”.
    RMD comment: I’m always wary of historical revisionists. Save your money.   


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