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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.

Economic Outlook for 2017: Part II of II

Issue #455A, February 02, 2017

    This is from a presentation made recently in Columbia by Scott Colbert and Joe Williams of Commerce Trust in Kansas City (a division of Commerce Bank (CBSH).
    The US 10-year Treasury is currently at about 2.5%. The average in Japan and the large Euro-zone countries is 0.9%.
    RMD comment: Interest rates will eventually rise, and may start to hurt our market later in the year. European rates are so low because Europe is a mess. If Marine Le Pen is elected President of France, they will leave the Euro, which will cause real turmoil.
    From 12/31/12 to 12/31/16, the total return of the S&P 500 was 70.7%. The EAFE (Europe, Australasia and Far East, basically the developed economies besides the US and Canada) returned 16.97%, and Emerging Markets (-) 5%.
    RMD comment: A regression to the mean would suggest it is time to give serious consideration to emerging markets. BUT: the big dog here is the US Dollar. Emerging markets are typically based on exporting commodities and their debt is not priced in local currency, but in US Dollars. They will be crushed by a strong dollar. I believe Trump wants a weaker dollar. A basic problem with investing in foreign markets are currency translations. If their market is up 10% in local terms, but their currency weakens, you are flat or down. Another way to play this game is to invest in natural resource companies based in North America.
    In his note, Scott thought the big themes were:
    1) look somewhere besides the S&P 500 for returns. International looks cheap. Floating rate securities look safe. Preferred stocks have sold off with bonds.
    2) This is the 4th longest economic expansion since 1949. It could conceivably become the longest. However, starting next year, there is a 1/3 chance of a recession starting in any year. They are cautiously optimistic.
    3) The Fed must stay accommodative. Any significant increase in interest rates has not been priced into the market.
    RMD final comment:
    1) as I have repeatedly emphasized, currencies are the big theme. Watch the US Dollar. If it breaks out to the upside A) commodities, including gold, will be hurt. B) Emerging markets will not do well. C) I’m not sure how that would affect our market. D) In the near-term it looks as if the Dollar may be breaking down rather than up. This will be discussed in more detail in the weekend newsletter.
    2) Avoid Europe. Avoid Mexico: they are in Trump’s sights (see below).
    3) Interest rates will eventually break to the upside, and this will hurt the market.
    4) Watch the VIX (Volatility Index). Last week it touched a multi-year low under 11. The long-term average is 19. If it stays below 15, we should be OK. 
    5) This will be the most business-friendly administration since Calvin Coolidge (that is a long time). Consider how well US business can do if 75% of regulations are wiped away (see below). One business owner noted he had more employees making sure he complied with regulations than producing his product. Even if taxes are not lowered, simplification will pay similar dividends.
    The deciding factor in my voting for Trump was the Supreme Court nominee(s). I like a lot of what he is doing, but going out of his way to bash Mexico makes no sense. Parts of central Mexico are almost lawless, with thousands of murders every year. My greatest fear is this lawlessness could spill over the border. Many of the Mexican drug lords have a home just inside the US where they park their wife and children for safe-keeping. There is already much more drug-related violence in these border areas of the US than gets into the national media.
    I asked someone who has a national presence in the banking industry what they thought of the new administration. 1) He received a questionnaire from the Trump people and agreed or strongly agreed with 95% of their proposals. 2) His organization wrote a multi-page report on how regulations can be streamlined. The administration and Congress are taking this seriously.
    I was recently in Las Vegas.
    RMD: “Where are you from originally?
    Taxi driver: “Afghanistan”.
    RMD: What are the predominant languages spoken there”?
    TD: Pashto and Dari.
    RMD: Is Dari similar to Farsi (modern Persian, spoken in Iran)?
    TD: Yes, they are dialects. People can understand each other.
    RMD: Kind of like someone from Brooklyn and Alabama.
    TD: (laughing): I never thought of it like that, but yes.

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