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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

Escheat
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

Contracts
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

Embezzlement
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

The VIX
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

The War on Cash
Issue #408, March 07, 2016

Precious Metals: Don’t Jump in Yet
Issue #407, February 29, 2016

The Bear is Growling
Issue #406, February 22, 2016

The Importance of Showing Respect
Issue #405, February 15, 2016

The 80-20 Rule of Thumb Pareto Principle
Issue #404, February 08, 2016

Some Tips on Commercial Real Estate
Issue #403, February 01, 2016

Economic Outlook for 2016
Issue #402, January 25, 2016

Selling Short: Part II of II
Issue #401, January 18, 2016

Short-Selling. Part I. How it Works
Issue #400, January 11, 2016

Who Can You Trust, and How to Spot a Con Man
Issue #399, January 04, 2016

Outlook for 2016: Part II of II
Issue #398, December 28, 2015

THE PHYSICIAN INVESTOR NEWSLETTER

HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.

Medicine in 20 Years

Issue #447, December 05, 2016

    We’ve all heard “if present trends continue”. If you think about it, that will never happen, because it means the trend would go to infinity. The trick is to determine when trends will stop, or to identify new trends.
    Of course, no one can predict the future. Rather, I make these points for your interest. Likewise, Churchill said put what you believe will happen in writing, so it’s there if you are right (I don’t remember that he said anything about if you are wrong).
    1) Medicine will become increasingly female. If you look at the class pictures from the 1950s, about 5% were female. They were tokens. Medicine was denied access to half of the gene pool. When I graduated U. of Chicago in 1977, about 25% of the class was female. Now at least 50% of med school grads are female.
    I believe the biggest negative trend causing Medicine to lose its competitiveness for the smartest kids in the class is prolonged training periods. In the not-too-distant past, when one graduated Veterinary school you could go directly into practice. Now there is an additional 1-4 years of training post-graduation, identical to the Residency and Fellowship in Medicine. 85% of veterinary school grads are now female. When I asked the dean of a vet school why, he responded immediately “Males no longer apply. They prefer a career in Business or Engineering, where they finish training much sooner”.
    2) Medicine will become increasingly “Corporate”.
    A) I believe the second most important negative secular trend in Medicine is physicians becoming hospital employees. They may have an MD behind their name, but they are an employee, serving at the goodwill of the hospital CEO. They have little or no influence, and are a cost center to be controlled, no different than a housekeeper or how much it costs to pave the parking lot.
    B) Physicians used to have significant clout because they controlled patient flow. Now that is usually determined by the patient’s insurance. Physicians have little power. The professional organizations, such as the AMA, or the specialty Colleges, such as the American College of Cardiology, are powerless when compared to huge health care organizations, such as UNH or Anthem or Blue Cross, or the medical schools, which have the power of Universities behind them, or in their ability to lobby Congress.
    C) The physicians who are hospital employees will continue to have their salaries squeezed. When it comes down to the “Suit” running the hospital or the physician making more money, the Suit will win.
    3) The physicians who do best will be those why rely the least on the hospital, insurance, and the government. This will include Dermatologists, Plastic Surgeons, the various surgical subspecialties, such as Ophthalmology and ENT, and other specialties, such as Gastroenterology, who can perform their procedures outside the hospital. Any physician who can require cash for service, including psychiatrists, will do well. It stands that these specialties will attract the best physicians.
    4) The physicians who supply Primary Care will be increasingly squeezed by non-physicians, such as Nurse Practitioners and Physicians Assistants. The payers, ie, the government and insurance companies, will say that the NPs supply just as good a care. Of course they don’t, they have 5 years less training, but they will continue to get more support because their services are less expensive, making it increasingly difficult for the Primary Care docs to make a living, esp. a female who doesn’t practice full time.
    As a result, physicians will turn more and more into technicians: those who perform the procedures (see #3), leaving the primary care to Nurse Professionals.
    5) Except for a few of the best Internists, the Marcus Welby, MD types, who practice in affluent areas in a concierge-style practice. No insurance, no Medicare, just cash on the barrelhead.
    6) Private equity is getting more active in Medicine, especially with the subspecialists who perform procedures. I’m not sure how this will shake out. I need more insight, and will do a newsletter on this subject in the future. 
    At age 65, my #1 hope is that I’m here in 20 years to see if I’m right.   
                                                                  RMD
    Next week I’m going to talk about the stock market rally, which I believe is for real. The market, and many individual stocks such as Deere (DE), have broken to new highs on good volume. That’s strong action.
    The US has the world’s largest economy, with about 20% of the world’s output. Yet the capitalization of the US stock market is 37% of the capitalization of the world’s stock markets. Why the difference?
    RMD comment:1) The P/E of the US market is about 17, higher than the historical average of 15, whereas many markets, especially emerging markets, are below their historical average. 2) Many companies, such as in China and other Communist/Socialist counties, are state-owned, and thus not traded on an exchange. 3) Large family/privately-owned companies are more common in Europe, esp. Germany, than compared to the US.
    This is from a new banker subscriber about last week’s newsletter.
    “I do not think the consumer is in reasonable shape. While monthly debt payments are down thanks to lower interest rates, the amount of debt outstanding is staggering. There has been deleveraging, but lack of knowledge and self-discipline have consumers in a pickle”.
    He provided a graph comparing US Household Debt vs. Income. 1960: 50%. 1970: about the same. 1980: 60%. 1990: about 75%. 2000: 90%. 2007: 120%+. 2016: 95%.
    RMD comment: I appreciate subscriber feedback. It gives me ideas, and I’m old enough to appreciate that I’m not always right. Remember: work hard, save your money, and stay out of debt. Those who lived through the Great Depression came out with an overt fear of debt. Unfortunately, the attitude toward debt has become much more casual.
    In fact, the delinquency rate on subprime auto loans is the highest since 2009. This is especially depressing since people now often take 60 or even 72 month notes. In my opinion, if you are a physician who has finished training, you should pay cash for a vehicle. If you can’t afford a new car, pay cash for a 3-5 year old car. Do not be seduced into leasing a car: it is a total waste of money.
    Last month two good friends were talking. #1 was appropriately apprehensive because he needed a surgical procedure. #2: “I’ve had that. It’s a piece of cake”. RMD interjects: “One of the first things we learned in medical school is never tell a patient this won’t hurt, because it always hurts”.
    I saw #1’s wife at the grocery store this week. He’s miserable.
    RMD comment: for the non-physician subscribers, if your physician says “This won’t hurt”. Vigyaz (Hungarian, “look out for danger”). For the young physicians: be sure to tell your patients this will hurt, because there’s no downside. If you are right, you are right. If you are wrong, and it’s not that bad, they’ll think you are a great doc. Just don’t overplay it. 
    I asked a newspaper editor what is the strategy behind more and more newspapers switching from afternoon to morning delivery. He said two reasons are 1) an ad that comes out at 6 AM has a longer life (the person has more time to act on it) than an ad that comes out at 4 PM. 2) Delivery is easier, the roads are less crowded, at 4 AM than 4 PM.     
    I’m getting tired of listening to apologists saying that Castro did good things for Cuba. He was a Communist thug who killed or jailed or drove into exile anyone who disagreed with him. He supported revolutionaries throughout the world, and destroyed the economy of his country. The average Cuban makes $20 per month, while Castro lived in luxury: (see The Double Life of Fidel Castro: My 17 Years as Personal Bodyguard to El Lider Maximo (Sanchez, St. Martin’s Press).  Churchill’s comment on when he first met Stalin at his villa describes this Communist paradox perfectly: “Everything was prepared in totalitarian lavishness” (from The Second World War: Vol 4: The Hinge of Fate). Nixon’s comment: “Castro couldn’t even go to the bathroom unless the Soviet Union put the nickel in the toilet”. 
    Again I ask a favor: If you have previously used PayPal to pay for this newsletter, please go to the website   http://www.thephysicianinvestor.com  and make sure you are not set up for automatic payments. I encourage you to use PayPal if you wish, but the automatic payments cause more problems than it is worth. 

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