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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

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


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

Is a PhD Worth It? Part I of II

Issue #424, June 27, 2016

    Before getting to the main topic, I want to say a few things about the British voting to leave the European Union, and the 600 point drop in the market.
    Ex Fed Chairman Alan Greenspan was interviewed on CNBC. He said the global economy is in serious trouble, with unsustainable debt levels. The problem is entitlements. The full faith and credit of the US Treasury stands behind our currency and our bonds. What stands behind the Euro?
    When asked to say something positive, he said he couldn’t. This is the worst period he’s seen since he’s been in public service, worse than the October, 1987 crash.
    RMD comment: I don’t know if he’s right or wrong, but those are powerful words.
    Why was the market so wrong about predicting the British exit?
    RMD comment: 1) Central bank manipulation of almost everything distorts signals people rely on to make their decision. 2) People are tired of government bureaucratic elites telling them what to do. 3) Although somewhat protected by the English Channel, the British are afraid of the refugees from the Middle East.
    Interest rates will remain low. The chance of the Fed raising this year is nil. 

    I think this topic deserves two newsletters, because it touches on many points I have been discussing for some time, including student debt, prolonged training periods, and an education as an investment. 
    The last I saw, about 37% of college grads have jobs that don’t require a college education. These kids, the ones with the top 30-50th percentile intellect (maybe your little darling) would have been far better off as the smartest auto mechanic or shoe repair man than the dumbest (and indebted) General Studies Major. So how about the kids at the top, our best educated, those with a PhD?
    I’ll talk about this from 2 points of view. First is to compare a PhD to an MD, because their intellect is about the same, and the amount of time spent post-college is similar. The second will be the job prospects after a PhD finishes training.
    Med School is 4 years. The average MD graduate has about $175K of debt, about $30K from under-graduate, the rest from Med School. The average PhD will presumably have the same amount of under-graduate debt, but in general, should accumulate no more direct educational debt during their PhD training (unless they are a spend-thrift, and buy a new set of wheels, have credit card debt, and live beyond their means).
    There is a wide range of support for those pursuing a PhD. At one end are the Science and Business PhDs at the top schools, such as Stanford, Harvard, U. of Chicago, etc. They have very little Teaching Assistant responsibilities, yet receive full tuition and a stipend that can total $30K. At the other end are the Arts and Humanities at the less prestigious schools, which provide some support but require significant teaching responsibilities (causing some student to go more than 5 years to receive their PhD) to cover tuition.
    Let me note before moving on: it is a red flag not to receive a written commitment of support for the 5 full years. No matter how prestigious the school, these are to be avoided. 
    At this point, MDs and PhDs have finished their education, with the PhDs having significantly less debt.
    The difference is in job prospects and earnings. About 4% of MDs don’t match, but quickly receive a position somewhere. Bottom line: 99% of the MD graduates of US allopathic Med Schools will have a job as an MD. As of 2014, 39% (2 in 5) of PhDs did not have a job or plans for further study when they received their degree. Ouch!!
    The average MD in the US makes $250K per year. I didn’t look up what the average PhD makes: 1) there is, of course, a wide range, just as there is for physicians that pursue various specialties, 2) but it’s not $250K per year. 
    To simplify the discussion, say a tenured Professor takes on one PhD candidate per year, over a 20-year career. This results in a terrible pyramid; many PhDs are trained to fill one job. This trend has worsened as many schools employ Adjuncts in place of tenured professors. Some PhDs are teaching courses for $3K with no benefits.
    My Commentary “Negative Secular Trends in Medicine: Prolonged Training Periods” was in the March issue of The American Journal of Medicine”. I note that if someone starts med school at age 25 and pursues a sub-specialty such as Cardiology, they could be elected President of the United States before they can sit for their Board exams. This unfortunate trend also affects those with a PhD: post-doc periods have lengthened from one to as long as four years.
    In “A Medical Education as an Investment” in The American Journal of Medicine in 2014 (see references below), I note that each extra year of training costs a physician one year of their final salary. The same is true for a PhD: each extra year of training costs a year of their final salary. Although the average PhD makes more than a college grad, considering the time costs of money over the course of 7-9 years, a well-chosen BS or BA can be a much better investment than a PhD.
    In next week’s letter, I’ll say more about the job prospects, or lack of job prospects, for a PhD, why Universities continue to turn out so many PhDs, and alternative educational options that might represent a better investment for these smart, hardworking kids. 

    The above does not apply to MD/PhDs. I will discuss them, along with taking on a Service commitment, as ways to avoid the debt of a medical education in a newsletter in the near future.
    Doroghazi RM. Negative Secular Trends in Medicine: Prolonged Training Periods. Amer J Med. 2016;129(3):352-353.
    Doroghazi RM, Alpert JS. A Medical Education as an Investment: Financial Food for Thought. Amer J Med. 2014;127(1):7-11.
    Tesla Motors, run by billionaire CEO Elon Musk, purchased Solar City, run by billionaire CEO Elon Musk. Wall Street didn’t think much of the deal: the value of Tesla fell more than the purchase price of Solar City.
    RMD comment: was that a conflict of interests? Of course it was, but that’s not the point I want to make.
The mere appearance of a conflict of interest
a conflict of interests.


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