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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

My Outlook for 2016, Part I of II
Issue #397, December 21, 2015

Want to Live a Long Time?
Issue #396, December 14, 2015

Some Tips on Retirement
Issue #395, December 04, 2015

Negative Interest Rates
Issue #394, November 30, 2015

What if the US Dollar Breaks to New Highs
Issue #393, November 23, 2015

How to Decrease Student Debt by 25%
Issue #392, November 16, 2015

The Importance of Buying Life Insurance when you are Young
Issue #391, November 09, 2015

Barron’s Conference, Part II of II
Issue #390, November 02, 2015

THE PHYSICIAN INVESTOR NEWSLETTER

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

My Outlook for 2016, Part I of II

Issue #397, December 21, 2015

    Since the beginning of my financial writing I have stressed the importance of credibility. I believe the best way to judge someone is what they have said and done in the past. Churchill recommended you put your impressions in writing so they could be referenced in the future.
    I went back to Issues #344 (12/15/14) and #345 (12/22/14) to see how my Outlook for 2015 played out.
    1) Precious metals: “Gold will eventually profit from all of the fiat funny money…but wait until it shows some real strength”.
    Gold is down almost 10% this year, so my advice to wait was correct.
    2) Interest Rates: “This is easy: they will stay low”.
    The 10-year Treasury is flat for the year and has traded in a tight range.
    3) Currencies: “Last year I thought currencies would be the biggest story, and they were. This will continue going forward”.
    Currencies were the big story and will continue to be.
    4) Commodities: “A strong dollar will keep the lid on commodity prices”.
    The US Dollar is up 20% since mid-2014. Commodities, such as oil, copper and iron ore, have been crushed, and are at multi-year lows. 
    5) Real estate: “Hopefully the recent loosening of lending standards won’t ignite another bubble…The firming of prices has again encouraged the foolish practice of borrowing against the equity in your home for consumption. Your goal should be to pay off your mortgage as soon as possible”.
    A good summary of this year’s action, and paying off your mortgage as early as possible is always good advice.
    6) Stock market: “A) go with the flow. B) Sell your losers. By far my most important advice is C) this is not a stock pickers market: stay with the S&P 500 and the DJIA”.
    More and more stocks, led by the smaller issues, are falling into their own bear market. The major averages, led by the FANG stocks (Facebook, Amazon, Netflix), have held up better, but also appeared to be topping or have topped.
    Overall, I believe my outlook for 2015 was worthy of a B+.
    Now, let’s get to next year. 
Precious Metals
    My basic advice is unchanged: wait for strength: either an obvious monster move that signals the market has turned, or better, wait for gold to break resistance at $1,250 and $1,350. At some time in the future, this great experiment of the Fed’s—don’t be fooled, because that is exactly what it is—will turn sour, and gold will again shine.
Interest Rates
    Many people believe that the main reason the Fed raised interest rates this week for the first time in 9 years was to maintain its credibility. They had previously said they would raise in rates in 2015, and this was their last chance to come through. Many Fed Governors also anticipate a steady rise in rates over the next few years.
    Several things are important to note. 1) The Fed’s actions have their greatest effect on short-term rates, especially the 2-year, with little if any influence on longer term rates. 2) The Fed raised rates in spite of signs of economic weakness here and world-wide. There is a real chance this rate rise won’t stick, and they will have to back-peddle. 3) Rising rates make the dollar more attractive (see below). 4) In the end, the market determines rates.
    Rising interest rates are bad for debtors and good for creditors. Immediately after the Fed’s announcement, many banks raised their Prime Interest Rate to 3.5%, but at the same time said they would not raise the rate they pay for deposits. This should help bank profits, but savers continue to get hosed.
    This will be one of my big calls: My overall impression is that rates will not rise much, if at all.
Currencies
    In my Outlook for 2014, I thought currencies would be the big story, and they were. In my Outlook for this year, I thought the same. In my Outlook for next year, I again believe currencies will be the big story.
    The dollar is already attractive and on the verge of breaking to new highs—but hasn’t yet. Higher interest rates here should make the dollar more attractive, which would 1) hurt the profits of our multi-national corporations, 2) keep a lid on commodities, and 3) hurt emerging markets, especially those dependent on commodities.
    Just about everyone outside the US wants to weaken their currency. If the dollar breaks to new highs, the Fed will eventually be forced to join the crowd. 
    Next week I’ll discuss my outlook for the stock market. In the meantime note that Friday’s close at 17,128 was below the close of mid-November and early December.

                                                                      RMD



   
    This is from a long-time subscriber currently in his Residency.
    “I brought up your life insurance article (Issue #391, 11/9/15) at a conference. Unfortunately, the advice goes unheeded, as folks are more worried about buying clothes on-line or leasing a new car. You will enjoy this. I bought a “new”  15-year old vehicle for $3,200 cash. I take great pleasure in parking between the new Mercedes and Lexus sedans in the Resident parking lot”.
    RMD comment: There is an inverse relationship between age and people who follow my advice. You have no idea how often I have heard “I wish I heard your advice 20 years ago”. Someone once said “You can make mistakes when you are young, because you can make it u later”. That is absolutely not true. To the contrary: the younger you are, the more careful you must be with your money. 1) You have less experience, and are more likely to make mistakes. 2) It ignores the power on compound interest. No one wants to make a mistake, but it’s less painful to lose $50K at age 45 when you already have $1M in the bank, than lose $10K at age 28, and forgo a half century of compounding. 
    College enrollment was down 1.7% this fall. 19.3M students were enrolled, down 1.3M from the peak in 2011.
    RMD comment: The last I saw, 37% of college grads work in jobs that don’t require a college education. I believe the government insuring student loans has led to 1) tuition far outstripping inflation (the Federal Reserve of NY issued a position paper that came to the same conclusion). 2) Debt is too easy to get, so students borrow more than they should, and 3) too many people go to college. I believe the least gifted 20% of those currently in college (and like it or not, this may include your little darling) would be far better off being the smartest bricklayer, welder or mechanic, than the dumbest college grad.
    I was talking to an internist in solo practice. To purchase the software and upgrade his computer capabilities, it cost him $84K to implement the new ICD-10 codes. He had no choice: without it, he could not bill Medicare. Furthermore, the company would not take a lease or a payment schedule: he had to pay cash (which he borrowed from the bank).
    RMD comment: ICD-10 is just more mindless bureaucracy (see Issue #386, 10/5/15). Billions in time and money are spent, and not a one patient is better off. 
    Carl Icahn said that because of no liquidity, high yield (junk) bonds are “a keg of dynamite. The meltdown is just beginning”.  He noted that the “ETFs of Blackrock (BLK) and other firms are dangerous”.
    RMD comment: Icahn, like all good investors, talk their own book. Likewise, he is a very smart guy who knows how to make money. There is no reason for him to say something that will make him look bad. It is highly unlikely that any subscriber own individual issues, but you may have a mutual fund or ETF that focuses on high yield. If so, most are already down 10-15%. You may consider unwinding that position. 
 
    Baseball players are signing 9-figure contracts. One pitcher will receive $1M per start.
    RMD comment: Good for them. I’ll bet there’s not 1 in 10 major leaguers who’ve heard of Curt Flood. I had the pleasure to meet Flood and Big Red (St. Louis football Cardinal) linebacker Bill Koman, and get their autographs, in about ’62 at the Jewish Temple in Clayton, MO.
    The average physician in the US makes $250K. People are willing to pay more to see a star athlete than they do to see their physician. 
    Two weeks ago I attended Dr. William C. Roberts’ 42nd annual Cardiology Conference in Williamsburg, VA, held over Illumination Weekend. The big celebration is Sunday afternoon and evening. The place was crawling with police. Just walking through a small part of the area, I saw 4 bomb-sniffing dogs and about 20 State policemen.
    RMD comment: Get used to it. It is going to take a long time, and much more effort, to defeat these people who want to destroy our liberal, Western society.

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