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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

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

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

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


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

Not Winning is not the same as not Losing

Issue #414, April 19, 2016

    This is an important letter because it discusses something that applies to your investments and life in general.
    One of my original subscribers called last week. He is frustrated that his broker advises him to stick with an investment he doesn’t like and that has been a loser, because it is standard advice for how a 79 year old should allocate their assets.
    There is a difference between not winning and not losing. In the former, you tried but didn’t succeed. In the latter, you were so concerned about the possibility of losing, and the resultant criticism, that you never tried.
    This is the MO of the mediocre investment advisor. I figured this out when I first started investing in the market in the mid-80s. I had collected baseball cards since 1958 when I was 7 years old. I still had them all. I had gotten back into the hobby in 1980 when I moved back from Boston to St. Louis. Baseball cards were exploding, and the big card maker Topps (TOPP) had just come public. I wanted to buy the stock but was thrice talked out of it by my broker. I would have more than tripled my money over 3 years. I was an expert on baseball cards, and it made me realize that I knew more than him. 
    The mediocre advisor will always recommend a blue-chip such as Proctor and Gamble (PG) or Intel (INTC). Here’s the reason: if you buy TOPP and it does great. OK, you were just lucky. But no matter how compelling the reasons, if it’s a bust, he can be criticized for buying an unknown company. If you buy PG or INTC and lose your rear, he will just say that’s the wisdom of the market. These brokers also recommend buy and hold forever. If investing didn’t require any thinking, we’d all be rich.
    A corollary of this is that I resolved that if I won or lost, it would be on my own decisions. If I tried and failed, I would hopefully learn from experience and move on. But I was not willing to lose on other’s advice when I thought I knew better. Of course, don’t be reckless, but in the end, you must trust your own judgment.     
    Capacity utilization usually runs around 80%. Last week it was reported at 74.8%, the lowest since 2010.
    RMD comment: Not good.
    This is from The Richest Man Who Ever Lived: The Life and Times of Jacob Fugger (Steinmetz, Simon & Schuster). Fuggar, rhymes with cougar, lived from 1459-1525 in Augsburg, Germany.
    “(They) would have found our modern banking system curious. They would have been struck that a banker could run his institution into the ground and still keep his house, not to mention his freedom (The owner of the bank was on the hook for everything, and could even go to debtor’s prison). They would scratch their heads over deposit insurance, although they would have liked the thought of someone else paying the bill for their reckless behavior. They would be even more curious about our currency system where nothing but faith in the government, rather than gold and silver, backstops legal tender…Currency backed by nothing but a promise? They may have said faith was for the church, not for money”.
    RMD comment: “curious” is not the word. 
    “It now seemed inevitable that as trade and technology developed, feudalism…would give way to a market-based economy…that divided resources based on what a person could pay rather than what he needed. Fugger argued that free markets created jobs and growth lifted all boats. But the intellectuals…weren’t buying it. They only saw that clever men like Fuggar grabbed all they could.
    RMD comment: The socialists have been making the same argument for 500 years.
    I recommend The Perfect Bet: How Science and Math are taking the Luck out of Gambling (Kucharski, Basic Books).
    “Rather than treating betting or financial markets as a set of static economic rules, it makes sense to view them as an ecosystem. Some traders are predators, feeding off weaker prey. Others are competitors, fighting over the same strategy and both losing…Simplicity does not mean predictability…Even if algorithms follow simple rules, they won’t necessarily behave in simple ways”.
    RMD comment: 1) the old saying was that when you traded stocks, bonds, options or futures, it was wise to presume there was a pro on the other end of the trade. Now it would be wise to presume you are trading against an algorithm run by a bot (a computer robot) owned and programmed by the professional. 2) Whenever you are gambling (or sometimes investing), remember the movie “War Games”. “The only way to win is not to play the game”
    From Blood Year: The Unraveling of Western Counter-terrorism.
    “Whereas President Bush was reckless, President Obama was feckless”.
    “These things underpin a post-Cold War system of international political economic and military norms, the spread of which was correlated with the greatest increase in human wellbeing in history. This global order wouldn’t long survive if the US decided to withdraw…And the US would suffer as much as, if not more than, other countries in this scenario, because America is a major beneficiary of that Western-centric world system. 
    RMD comment: this is the best book I’ve read on the current situation in the Middle East and the rise of ISIS. Kilcullen is an Australian counter-intelligence agent with no political ax to grind.
    Sorry this is a late. I was traveling last weekend and got home Monday night.   

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