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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.

More on Buying Jewelry

Issue #469, May 08, 2017

    Based on the number of subscriber responses, my best Newsletter ever was “A Wedding as an Investment” (Issue #241, 12/24/12). Last week’s Newsletter on “Buying Jewelry: Gold, Diamonds and Pearls” clearly caught the interest of many of you.
    An original subscriber since the fall of 2006, married to a retired University President, notes that his wife will only buy used/antique jewelry, and has several favorite dealers. They have no heirs (the subject of the next Newsletter) and he has wondered what to do with the jewelry should his wife die first (RMD comment: her father, a very cool guy and a patient of mine, lived to 102 years of age). He called one of the dealers, who said simply “Call me immediately”.
    RMD comment: Only buy jewelry at wholesale, not retail. Only buy premium material: it holds its value better, and the dealers want it badly, because it sells quickly. In fact, the dealers will give you more and the mark-up is less on the premium material for just this reason.
    Another long-time subscriber wrote “I think you hit it out of the park. The portable wealth theme should not be dismissed. As the insurance agents say “You don’t check your insurance policy after your house burns down”.
    “What do you think about buying loose diamonds? No fabrication costs. Admittedly though, not a good Christmas gift for the missus”.
    RMD comment: True: there are no fabrication costs. Like all collectables, knowledge is power. I would only buy stones graded and certified by GIA. Remember that diamonds represent the most concentrated vehicle for portable wealth in the world.
    “What are your thoughts on collectable watches”?
    RMD comment: Great point. Barron’s and especially Forbes often have articles on horology. The current gold Rolex President sells for about $32K. There are many watches much more expensive. Watches are very collectable, and quite liquid (liquidity is the ability to sell something, to convert it to cash). This goes especially for men, as they (hopefully) don’t wear gold and jeweled necklaces, ear rings, and bracelets. 
    “Your best source of gemologist/jeweler advice will come from a patient. I treated a local jeweler several years ago, and now have a priceless (literally) source of advice”.
    RMD comment: That’s a great point, and one of the many satisfying and enjoyable aspects of being a physician.
    This is from another long-time subscriber. “I always have diamonds and emeralds GIA certified. With diamonds there is a personal bias to cut, and with emeralds a personal bias to origin: Zambian vs. Colombian. Always buy from a very reputable, high-end source. They will bargain if they realize you are well-informed. I also get advice from other jewelers (RMD comment: Most often, dealers will dis other dealer’s material because they want you to buy from them. A dealer that will give you an honest opinion on another dealer’s material is worth their weight in gold—no pun intended)”.
    “If jewelry doesn’t elicit a WOW factor, I don’t buy it”.
    RMD comment: I learned long ago never to talk myself into anything, when I said yes, then no, then yes, it was always a loser. When I looked at something for 10 seconds and said “this is the greatest thing since sliced bread”, they weren’t always a winner, but it’s where all my winners were. There is an intellectual basis for this observation in Gladwell’s book Blink: The Power of Thinking without Thinking (reviewed in Issue #118, 8/16/10).   
    “I never considered jewelry an investment”.
    RMD comment: Only partially agree. This is like buying any collectable: you buy it because you like it. It is a way to preserve wealth, but considering the buy and sell fees, which will be at least 25% (the dealers do have to make some money), you will need to hold it for years, decades, to realize a profit. Likewise, when you buy something that costs 4, 5 or maybe even 6-figures, that’s a lot of money, so you do need to be very conscious of the investment aspect.
    “One thing I learned is women first look at the jewelry and then the box: where did it come from. Men should not question this, just accept it. The emotional aspect of a gift to your wife of expensive jewelry is a testament from you to her regarding your love, appreciation, and all the hard work she does for your family”.
    RMD comment: Half of first marriages end in divorce. Of the half that remain married, half are unhappy. These folks are in lucky one-quarter. My hats off to them.
    In summary, I suggest you own some quality jewelry:
    1) when you can afford it, it’s OK to spend a few bucks on the finer things of life.
    2) Its portable wealth, an insurance policy if things go bad.
    3) Its wealth outside the banking system. A very important point.
    4) Its a storehouse of wealth.
    5) Its an heirloom that will (hopefully) be in your family for generations.   
    I would be remiss if I didn’t remind you that jewelry given as a gift is not community property in a divorce, it belongs to the recipient.
    The Parisian department store Bon Marche had a fixed-price policy as early as 1852. It was quickly adopted by US dept. stores. No haggling, the owner did not need to entrust bargaining to individual salesman, allowing the store size to expand almost indefinitely. Customers could send their children to do the shopping. (From The Americans: The Democratic Experience (Boorstin, Random House, 1973).
    Then came mail-order catalogue shopping pioneered by Sears (and to a lesser extent, Montgomery Ward), facilitated by expansion of the US Postal Service with free rural delivery. In the old dry goods store, the customer would give their orders to the clerk behind the counter, who would fetch the goods. In 1916, Piggly Wiggly, the first self-service grocery store, was opened by Clarence Saunders in Memphis, allowing the customer to fetch their own goods.
    Now Amazon (AMZN) is again changing the retail experience.   
    I highly recommend A Very Expensive Poison: The Assassination of Alexander Litvinenko and Putin’s War with the West (Harding, Vintage Books). This is better than any detective, spy novel because it’s true. As Felix Zulauf noted at last year’s Barron’s conference, Putin is an effective politician because he knows what he wants. The author feels Russia is a kleptocracy, the government is run like a mafia operation for the enrichment of a few at the top.
    We were in Chicago for my 40th med school reunion, and ate at nice restaurants down town several nights. The sales tax was 11+%.
    RMD comment: Chicago is approaching dysfunction. Rather than addressing their problems, they just raise taxes. Detroit had to declare bankruptcy, now Puerto Rico, Chicago might not be far behind.
    Whenever I take a taxi, I ask the driver how long they’ve been driving. Next question is where you are from originally (I can’t remember the last time I had an American-born driver). I asked the driver the cost of the taxi medallions in Chicago. “Last year they were $385K, but Uber is killing us. They’re down to $40K, and no one is buying. Many of the larger companies are just parking the cars”.
    RMD comment: capitalism is called creative destruction. General society profits, but if you’re on the destructive end, like the US steel industry since the late-70s, or the taxi industry since Uber, it’s painful.
    If you want to communicate with me, don’t send it through the website. My email address is listed at the top of the newsletter.  .(JavaScript must be enabled to view this email address)     


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