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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.

The Consumer Confidence Index

Issue #451, January 02, 2017

    The Consumer Confidence Index (CCI) is released at 10 AM ET on the last Tuesday of every month. It is compiled by the non-profit Conference Board from a survey of more than 5,000 households conducted by Nielsen (NLSN). It is indicative of the consumption component of the Gross Domestic Product. Opinions on current conditions make up 40% of the index, expectations of future conditions make up the other 60%.
    Respondents answer the five questions as “positive, negative or neutral”.
    1) Current business conditions.
    2) Business conditions for the next 6 months.
    3) Current employment conditions.
    4) Employment conditions for next 6 months.
    5) Total family income for next 6 months. 
    The CCI was started in 1967 and a base of 100 was established in 1985. The December reading of 113.7 was up from 109.4 in November. This number was driven solely by the Expectation Index, which increased sharply from 94.4 to 105.5, and was at its highest level since 107.4 in December, 2003. The Present Situation Index decreased from 132 to 126.1
    The highest reading for the CCI was 144.7 in January, 2000 (RMD: the absolute high of the bubble). The all-time low was 37.7 in January, 2009 (RMD: the low of the financial crisis).
    RMD comment: like all statistics, there will be month to month variability. In general, the larger the change, such as more than 5 points, the more significant. The trend is also important. Manufacturers and retailers use the CCI in their models to help estimate production and orders. Banks and credit card companies use it to anticipate a decrease or increase in demand for mortgages and credit.
    Some points on the market:
    I continue to be impressed with the information imparted by the VIX (Volatility Index, discussed in Issue #422, 6/14/16). To remind you, the VIX is also called the fear index because it goes up when the market goes down. On Tuesday, the market was up slightly and seemed quiet, but the VIX was up 4-6% most of the day. Sure enough, the DJIA dropped 110 points on Wednesday.
    With the election, the USD broke to a multi-year high and interest rates shot up. Gold was smoked. The Dollar is now stalled at 103, and the 10-year Treasury can’t seem to break through 2.50%. On Thursday, the precious metal miners had a monster day. Silver Wheaton (SLW) was +9.4%, GDX (an ETF of the large miners) was up 7.5%, and GDXJ (an ETF of the junior miners) was up 9.2%. However, on Friday they gave back a good part of those gains.
    The precious metals need to show much more strength before I can recommend you jump in.

    From time to time I will mention stocks that are near to or breaking out to new highs, stocks with strong momentum. Potlatch Corp ((PCH) is a diversified lumber and forest products company, so it would be a good way to play natural resources and housing. In 2006 it restructured as a REIT, and pays a dividend of 3.6%. I do not own PCH at present but I’m watching it closely.
    Last week I bought a pack of 100 plain, unlined 3x5 index cards = $1.50.
    RMD checking out. “I worked at an office supply store in high school. The unlined cards were 15 cents, the lined cards were 20 cents.”
    Clerk: “They sure have increased a lot”. Pause, then smile. “After January 20, they’ll say ‘Made in America’ and cost at least 20% more”.
    The people who voted for Trump are still sore about being called “deplorable”, and the people who voted for Clinton are still sore Trump won.
    RMD comment: the one thing that’s safe to say is that this will be the most business-friendly administration in a l-o-n-g time. The consumer believes it (see above), and the stock market believes it.
    A friend asked me to look at a lesion on her 22 year old daughter’s scalp. When I was in practice, I had a rule “if I noticed a skin lesion, I was concerned about it”. I picked up 7 melanomas. I was concerned and it was a basal cell carcinoma.
    RMD comment: In Issue #118 (8/16/10) I reviewed Gladwell’s book “Blink: The Power of Thinking Without Thinking. The book provided an intellectual framework for my personal rule. The brain has 2 computers. Your conscious, rational one for making analytical decisions, and your subconscious, good for making snap decisions. Ex: it’s 2 AM Sunday morning, you’re walking down an alley in the worst part of town (this wouldn’t be a problem if you weren’t there in the first place) and 2 guys are walking towards you with baseball bats. You don’t need to Google anything to figure out it’s time to scram.
    Mariah Carey walked off the stage at her New Year’s Eve performance.
    RMD comment: a surgeon subscriber noted that you don’t just walk out of the OR when get a little tough.
    There have been fights and altercations at multiple malls.
    RMD comment: There has been a loss of basic civility and common decency in our society. Machiavelli’s The Prince is one of the 10 most important books I have read. It is considered the beginning of the discipline of Political Science. The #1 desire of the average citizen is order: People are willing to give up some, even a fair amount of, freedom and their personal possessions for order: the knowledge that you and your family are safe when you walk down the street and conduct the basic business of your life.
    I’m going to put out an Interim Bulletin on Wednesday about recreational property. The subject of next week’s newsletter will be “Student Loans: But Wait, There’s More”.   

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