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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.

Some Observations

Issue #487, September 11, 2017

    Considering all of the bellicosity and provocative acts coming from Looney Tunes in North Korea, I was going to review previous newsletters “Wealth, War and Wisdom”, and Guns, Ammo and Liquor”, and, because of the hurricanes, throw in a discussion of how to prepare for a natural disaster. But there was some interesting action in the markets last week, so I’ll delay the man-made/natural disaster discussion until next week.

    I’ve mentioned Lowry’s frequently. In business since the 30s, I believe they are the best technical forecasting service in the business. By measuring the forces that drive all markets, namely supply and demand, they provide probabilities on where they believe the market is headed.
    They note that market tops are not a single event in time, but rather, a process. At the final top, the strength of the mega-cap stocks, which carry the major averages to all-time highs, disguises weakness in the broad market. First the small cap stocks lag and fall into a bear market (defined as a drop of 20% or more), then the mid-caps, then the large caps, and finally the biggest stocks, as exemplified by the “Nifty Fifty” in the early 70s, break down. At present, the small cap stocks have shown deterioration, but the over-all Advance/Decline line, which diverges and begins to deteriorate 4-6 months before the major averages make their final highs, continues to advance.
    RMD comment: Cull your losers (which is always good advice), esp. among the smaller stocks, and if you wish, redeploy the proceeds to the larger issues, such as the S&P 500, or even the S&P 100, the NASDAQ 100, and the DJIA.
    The dollar is weakening against almost everything. The US Dollar Index, weighted 57% to the Euro, 13.6% to the Yen, 11.9% to the British Pound, and the remainder to the Canadian Dollar, Swedish Krona and Swiss Franc, is down 10% this year. A front-page article in the WSJ on Friday notes the dollar is also down strong against the Chinese Yuan, despite efforts by the Chinese to keep exchange rates stable.
    RMD comment: as I emphasize every chance I get, currencies are the big game in town, because they reflect the world’s impression of the strength of a country’s economy. The day after Trump was elected, the dollar soared. Now it can’t seem to gain a bid, and is at a 2-year low. 
    This is not lost on gold. Gold was spanked the night of Trump’s election. Now it has broken strongly through resistance at $1,300. The miners, as represented by GDX (an ETF of the largest miners), have also been strong. Likewise, gold is due for a rest after such strong action.
    RMD comment: I again recommend the precious metals be a 5-10% position in your portfolio, with a core position of gold bullion in your personal possession. We’ll talk about this much more when the precious metals surpass the 2016 highs of gold $1,370 and GDX of 30.
    Interest rates are strongly associated with the action in the dollar. When interest rates are high, it makes a currency attractive. With Trump’s election, our interest rates popped in anticipation of a stronger economy, based esp. on higher defense and infra-structure spending, and tax reform/cuts. Yet we now find ourselves with the 10-year Treasury at the low of the year, and the yield curve is flattening: short-term rates have increased while long-term rates have dropped. However, the yield curve has not inverted, which often anticipates a recession.
    RMD comment: Interest rates are a mess. Savers are hosed, receiving less than inflation on their hard-earned money, while debtors, the largest (by far) being Uncle Sam, are encouraged to borrow even more (today’s Barron’s feels the deficit is headed higher, and I agree). In a free market, high interest rates signal a strong economy, and lower rates a weaker economy. Central banks now hold almost $16T of assets, which keeps rates artificially low. This same manipulation will keep rates artificially low for longer than you think, or is justified.
    We are in the midst of an experiment in financial markets that no one can say how it will end.
    In my book The Physician’s Guide to Investing: A Practical Approach to Building Wealth, I note that I’ve never heard of a female physician doing some of the stupid things male physicians have done to cause a life of never-ending financial insecurity. It was my impression that this is because female physician are more risk averse.
    The Economist (8/26/17). “Many studies show that testosterone-laden men are prone to overconfidence in trading. Women are more cautious”. Previous studies were all from the West. A new study in Chinese markets found women can be just as manic as men.
    RMD comment: accept the fact: people are different.
    Refiner Valero (VLO) has broken out to a new high. It is likely that the gulf hurricanes were the catalyst, but note that VLO has been in a base/consolidation period since Dec. of last year. It pays a 4% dividend. 

    So far this year:
    1) Tree-trimming $3,600.
    2) Window washing $1,100.
    3) Masonry work, back steps $1,200.
    4) Squirrel damage $900.
    5) I encourage you, or a family member, to mow your own lawn. Occasional work that is hot, boring, and smelly is good to help a professional maintain perspective on what the rest of humanity must do to make a living. If you hire a service, $40 x 20 times per summer = $800. Several times I was mowing my lawn when the service did the neighbors. I noticed immediately that my grass was shorter, ie, leaving the grass taller meant the neighbor’s lawn needed to be mowed more frequently. So—if you have a service mow your lawn, have them ratchet the blade down. Your lawn will look fine, and it could easily save you $100 per summer.
    6) Yearly termite inspection $65. The man usually does 10-15 inspections per week on homes being sold. Lately it’s down to 4-5 per week. He notes that Sept. is usually slow because people have settled in for the school year, but this is slower than usual. This is a great example of obtaining useful investment ideas from your daily life. Imagine: learning that the housing market might be slowing from the termite man. Randall Forsyth comments in today’s Barron’s that home construction and sales of existing homes have recently slowed. 
    RMD comment: Your home is a great investment for your heirs, but it is a depreciating assets for you. Considering the time costs of the money tied up in your home, the upkeep and taxes and insurance, it costs you 1% of the value per month to own a home. Likewise, I encourage you to own a home and pay off the mortgage at your earliest convenience. You will always have a place to live, and should the situation arise, you can tap the equity by downsizing or a reverse mortgage. 
    I got home late one afternoon and wanted to grill because it was nice outside. I needed to go to the store anyway, so bought some chicken thighs displayed in the butcher’s case on ice, because they were cheaper than the pre-packaged chicken. As the butcher was about to weigh them, I said “Sir, could you please wipe off the ice”.
    RMD comment: Grandma Nagy would have been proud of me. 
    I recommend:
    1) Evolution’s Bite: A Story of Teeth, Diet and Human Origins (Ungar, Princeton U. Press). A nice summary of the current knowledge of the evolution of man, using the study of dentition as a base.
    2) The Other One Percent: Indians in America (Chakravorty, Kapur, Singh). Indian-born and Americans of Indian descent make up 1% of the current US population. They are—by far—the most successful group in the US, with an income of almost twice the national average. The main reason is that those who emigrate have been triple-selected, twice by the social and educational system in India, then by the current US visa system, with its emphasis on the highly educated. They are bright and hard-working.
    I recommend this book to everyone, esp. if you are in that one percent.     


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