Newsletter Archive
Issues older than 90 days

Available Issues

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.

Platinum and Palladium

Issue #456, February 06, 2017

    Platinum (Pt) and Palladium (Pd) are used in jewelry, but both presently find their predominant use in automobile catalytic convertors. Both have been strong lately: Pd is up $300 over the last year, and $150 over just the last 2 months. What’s up?
    Pt has a specific gravity (weight in comparison to water) of 21.45, the highest of any naturally occurring non-radioactive element. For comparison, the sp. gr. of nickel is 8.9, silver (Ag) 10.4 and gold (Au) 19.3. This difference in sp. gr. is obvious when holding a one ounce coin of each: the Pt coin is the smallest. The Mayans used Pt in jewelry.
    From 1970 until about 2 years ago, Pt was more valuable than gold 95+% of the time. When this happened, investors would go long Pt and short Au, making money when there was a regression to the mean.
    Point: For whatever reason(s), gold has been more expensive than Pt for the last 2 years. The regression to the mean trade works until it doesn’t work.
    So what has been driving the recent jump in the price of Pt and especially Pd?
    1) I believe the precious metals bottomed in December, 2015. The US Dollar has weakened (see below). Pt and Pd are being pulled along for the ride. 
    2) Yearly world Pt production is about 8M oz., about 250 metric tons, half of which comes from South Africa. For comparison, world gold production is about 2,500 tons. South Africa is having significant labor problems. In the latest 3-month period, Pt production was down 20% because miners were not showing up for work.
    3) The biggest reason for the pop in Pd is China. China is the largest auto market in the world (sales of almost 25M vehicles per year vs 17M in the US). I mentioned in a recent newsletter the terrible pollution in China. They have finally had enough, and over Christmas week the Chinese government announced they would try to meet world pollution standards, which means their cars will need a lot of Pd for catalytic convertors. In fact, I believe cleaning up the pollution in China will be one of the biggest issues in that country over the next decade.
    This newsletter is more for your information and interest. This is a niche area, to be avoided by the average investor. There are 1 oz. Pt coins. I have a few. They are hard to find, and not as liquid as gold or silver. Just as there are ETFs that hold physical gold (GLD) and silver (SLV), there are ETFs that hold physical Pt (PPLT) and Pd (PALL). The most efficient was to trade Pt and Pd is futures.
    This also allows me to make another point. A short-term blip up or down can be due to anything, but bull and bear markets are driven by basic forces. If there is a real increase in demand for Pt and esp. Pd, they should do well.

    In March, 2015, the US Dollar Index hit a multi-year high at 100. It was stopped at 100 again in December of that year. It finally broke above 100 in December, 2016, going to 103.5. It seemed like everyone was long the Dollar. Of course the Dollar promptly weakened, and has now broken below 100.
    RMD comment: Gold and the Dollar tend to move in opposite directions. It will be very hard for gold to break above last year’s high of $1,380 unless the Dollar weakens further. Currencies are the big game in town. 
    Every year at tax time I try to remind you of 3 things.
    1) If the IRS contacts you, it will always be by US Mail. If initial contact is via email or phone, it is always a scam. 
    2) Communications with your physician and your attorney are privileged. Communications with your accountant are not. You immediately say “I haven’t done anything wrong, what do I need to be afraid of?” Please, don’t be so naïve. What if there is something you don’t understand and have a legitimate question, which in the end is patently illegal? When you go to Las Vegas, the best way to bring money is via cashier’s check, with a copy faxed to the casino beforehand so they can have it verified when you arrive. When I first considered this, I wondered about doing something. Literally the next paragraph in the book I was reading said that was one of the bad guys favorite money laundering techniques is what I was thinking about. If you even mention it, you could be arrested, with some serious explaining to do.
    3) If you are audited, you must always have your lawyer or accountant be the one to communicate with the IRS.  When you meet with an IRS agent, the first question is always “Have you reported all of your income”? Even when not under oath, it is a felony to lie to an agent of the federal government (Don’t you love the irony: you can’t lie to an agent of the government, but politicians lie to us all the time). If they find you have not reported all of your income, you are a goner. Note that Martha Stewart and ex-Illinois Gov. Blagojevich went to jail more for lying to the FBI than for what they did. Be careful. Avoid direct communication with the IRS.
    At Rotary, our Sergeant at Arms always asks a few questions to see who can avoid being fined. “In the Super Bowl, how many punts have been returned for a TD”? RMD: “None”. SAA “Correct”.
    RMD comment: I had no idea of the correct answer, but zero was the only logical answer. In “Indiana Jones and the Last Crusade”, Harrison Ford and Sean Connery are looking for the Holy Grail, the chalice used by Christ at the Last Supper. Ford finally reaches his goal. The ancient knight asks him to choose the correct chalice from the hundred on the table. He chooses the one that is different: the wooden chalice from among all the golden ones.
    That is my point: the correct answer is often the one that is different.
    A friend sent me the invoice from Blessing Hospital in Quincy, IL when her grandmother gave birth to her mother in 1927. A 9-day stay.
            1 day @ $4.50                             $4.50
            8 days @ $2.50                           $20.00
            Laboratory                                 $1.00
            Birth Room                               $10.00
            Medicine                                   $0.15 (that’s 15 cents)
            Total                                       $35.65
    In a box next to the total, it says “The management wishes to state that the prompt payment of accounts is urged, because funds are necessary to meet the large outlay required in the handling of an institution of this size. Every dollar received by this hospital, whether donated or paid for services, is used in helping someone through a siege of illness”.
    RMD comment: Now the funds at “non-profit” hospitals are used to pay the CEO’s 7 and even 8-figure salaries, and generate hundreds of millions in profit.
    See my recent articles. 1) Negative Secular Trends in Medicine: High CEO Salaries. The American Journal of Medicine Feb, 2016. 2) Negative Secular Trends in Medicine: High Hospital Profits. The Amer J Med, November, 2016.
    I’ve got a lot of ideas for newsletters.
    1) I believe Thomas Sowell, a U. of Chicago grad, is the greatest social philosopher/economist of our time. He recently announced his retirement at age 86. I’ll review Dr. Sowell’s work.
    2) Never sign anything you haven’t read. Always have an attorney review a contract. This is one of those “preventing stupid doctor mistake” messages.
    3) MIT mathematician Edward Thorp developed the idea of black jack card counting. He also made jillions as a hedge fund manager. I will review his most recent book A Man for All Markets. 

Site by Delta Systems powered by ExpressionEngine