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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.

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. 

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