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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

Escheat
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

Contracts
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

THE PHYSICIAN INVESTOR NEWSLETTER

HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.

The Importance of a New High

Issue #489, September 25, 2017

    As I’ve often mentioned, I use fundamental analysis to determine what to buy or sell, and technical analysis to help determine when to pull the trigger. New highs and lows are important. For a new high, people are willing to pay a higher price than before. For a new low, they are willing to part with their position for less than they were previously.
    Before getting started, let me point out the difference between buying a stock on the breakout to a new high and momentum investing. With the former, there is usually an apparent reason, such as a strong earnings announcement, or that business is just good. With the latter, there is no basis in fundamentals, you buy only because you believe it will go higher. It is possible to make money, sometimes big money, with momentum investing, but you must be the first out the door or you will get trampled. Issues in the grip of momentum investing are often volatile, moving up or down 10 or 20% in one day. Aside from companies with just 1 or 2 products, like a biotech, or a company whose assets have been nationalized, or there is some other obvious dramatic event, the value of few real companies will be so volatile. Compare this to the current mania involving Bitcoin and other cryptocurrencies. That is momentum investing.
    If you look at long-term winners, say Apple (AAPL, chart not pictured), they don’t do straight up. Rather, they will move upward and then pause and back off. This pause is called a consolidation or base period, and can last from a few months to years. To make an analogy to water backing up behind a dam, the longer the base period, the more significant the breakout to new highs. A good example is John Deere (DE, chart not pictured), which broke out to a new 8 year high last November immediately after the election of Trump and the Republican Congress. 
    Sometimes stocks approach the previous high and blast right through. In the chart below for Chevron (CVX), the stock peaked in December, 2016, backed off, and this week rose to a new recent high.

    Another common pattern is called a cup and handle. The stock will go back to the previous high but not break out (the cup). It will then back off again, but not to the previous low, and not for as long a time period, and then break out to a new high (the handle). Sometimes it takes multiple probing of the previous high before the stock breaks out. The refiner Valero (VLO, see chart p 3) peaked at 67 in late 2015. It then backed off to about 46 in mid-2016, and in December of last year tested the old high, but didn’t break out (the cup). It again backed off, approached the previous high, and 4 weeks ago broke to a new high (completing the handle).
    It’s important not to anticipate a breakout—because it might not break out (see the chart of International Paper (IP) on page 4). It peaked at about 58 in mid-July, backed off, tested the high last week, and failed to break out (it could break out later) The 1 or 2% you leave on the table is much better than sitting on dead money, or even a loss.
    Watch the volume on the breakout. The best is when the stock blows to a new high on many times the normal daily volume and continues with nice follow-through and upward momentum over the next few days. It then may or may not go back to test the previous high. If this test is successful, and the stock again heads upwards, what was previously “resistance”, at about 67 for VLO, now becomes “support”. Failed breakouts, where the stock falls back quickly, usually occur on weak volume.       

                                                                   

                                                                            RMD
    WSJ (9/20/17). “Mountain of Debt Felled Toys “R” Us”.
    RMD comment: Some years ago I attended a conference where the lunchtime speaker was a memory expert. He said if you repeated something 8 times a day for 5 days in a row, you would remember it forever. “Now I lay me down to sleep” or “I pledge allegiance to the flag’. To illustrate the point, he used commercials that had not run for years. He said if he started it, we could finish it. The one for my age group was “Winston tastes good like a cigarette should, Winston tastes good like a” completed by the audience “x x cigarette should”.
    So you will remember it forever, 8 times a day for the next week, repeat that the secret to a life of financial security is:
Work hard, save your money, and stay out of debt.
    Every day or 2 I delete whatever is in my SPAM folder. The other day there was the salutation that the IRS wanted to contact me.
    RMD comment: A reminder. Initial contact from the IRS to you on any issue is always via US mail. The IRS will never make initial contact by phone or email or any other way besides US mail. Everything else is a guaranteed scam.

 
    Cousin Tony forwarded this from Bloomberg about the Equifax hack. Basic info goes on the black market for $10-20. The higher your credit card limit, or expensive cards, like platinum, or business cards are the 1st to be sold. W2 info goes for $30 and up, as it is great for identity theft, especially when they have your mother’s maiden name.

 

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