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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.

Thomas Sowell: Part I of II

Issue #464, April 03, 2017

    Hero is not a word I use lightly. George Marshall and George Washington are among my heroes. Growing up in the St. Louis area in the 1950s, Stan Musial, arguably one of the 10 greatest non-pitchers ever, and an honest, decent, humble man, was a boyhood hero. Thomas Sowell, who I believe is the greatest social philosopher of our time, is one of my heroes. I write about Sowell now because he recently announced that, at age 86, he is laying down his pen.
    In this letter, I’ll take highlights from an interview with Sowell in the March 18/19 Wall Street Journal, and make several other points.
    Although Sowell has his reservations about Trump, he gives him credit for being “the first Republican who’s made any serious attempt to get the black vote by addressing problems that affect most blacks who are trying to do the right thing—such as education…The most successful schools for educating black kids have been a few charter schools. There are literally tens of thousands of kids on waiting lists.
    In order to get these reforms, you would have to go against the dogma not only of educators, but the American intelligentsia in general. The teacher’s unions complain that charter schools have skimmed off the cream…that’s nonsense, because people are chosen by lottery…There people are just desperate to get into the charter schools. They don’t want to be raising a bunch of thugs”.
    RMD comment: education starts at home. We were walking into Walmart behind a mother and her kids who looked like they couldn’t even afford to shop there. I told my boys, who were about 9 and 7 at the time, “you see those kids. They will never get ahead of you—never—because I won’t let them. I’ll give you every advantage: tutors, enrichment activities, travel, the best schools. Whatever”. This is why you work hard, to provide advantages for your kids. I will give more of Sowell’s thoughts on education in next week’s letter.   
    Sowell laments what he sees as the spread of “The grievance culture to low-income whites—and even to Great Britain”. An idea has taken hold “that you’re entitled to certain things, you don’t necessarily have to earn them. There’s a belief that somethings wrong if you don’t have what other people have—that it’s because you’re “disadvantaged”.
    Joe Louis and Joe DiMaggio were 2 of Sowell’s heroes. He describes a moment in the 1947 World Series between the Yankees and the Brooklyn Dodgers. DiMaggio comes up with the Yankees behind and runners on base. He hits a blast that Al Gionfriddo grabs before it goes over the wall. “DiMaggio by this time is rounding second base. He gives a little kick in the dust and goes back in. That was the biggest outburst in DiMaggio’s career…I still remember that self-control all these years later”.
    RMD comment: My opinion of Muhammad Ali seems to be different than just about everyone else. He started the braggadocios, taunting behavior, which I believe has done a dis-service to society and athletes in general, and black athletes in particular. Prior to Ali, modesty was considered a virtue. Think of Nile Kinnick, Lou Gehrig, Musial and DiMaggio. After a home run, Mantle ran around the bases with his head down.     
    I first heard of Sowell in the early 90s, when he wrote a column for Forbes. He believed that people must be held responsible for their actions: he saw fault with our faultless society. Someone commits an armed robbery: it’s not his fault, he was raised in poverty, no father to look up to: he was abused. Sowell: the response must be immediate with no equivocation. That is wrong!
    Race and Culture: A World View. “Attempts to achieve through multi-culturalism, affirmative action, or other policies what can only be achieved by the development of cultural capital are illusions and distractions only likely to make matters worse”.
    Migrations and Cultures: A World View. “Each ethnic group has carried forth a particular set of skills, attitudes and lifestyles”.
    RMD comment: You are not prejudiced to state a fact: people are different. Many of the Italians who came to the US were masons or worked in mines (see below). The Hungarians and Bulgarians worked in the steel mills. The Irish were often policemen or firemen. For generations, Mohawk Indians have been the premier high-level iron workers, fearlessly walking on beams hundreds of feet above the ground (see below).
    In next week’s newsletter, I’ll review Sowell’s latest, and presumably last, book Wealth, Poverty and Politics: An International Perspective.     
    The stock of Collector’s Universe (CLCT) has been on fire. They started in the 80s as PCGS (Professional Coin Grading Service). By providing an impartial, hands-off grading service (they do not deal in the product), they standardized grading. They also issue a Population Report, saying how many items are at each level. The result was to unlock the value of the high-end material. Everyone wants the best, and they are willing to pay for it. Then came PSA (Professional Sports Authentication), which had the same effect on sports cards. Their latest venture is to authenticate autographs, which has been quite lucrative. They pay a 5.5% dividend. Notice the breakout to a new high on very large volume in February. CLCT is +23% so far this year.
    I spoke to a baseball card dealer I’ve known since 1980. He says CLCT has cornered the grading market on coins and cards, have been able to aggressively raise prices, and their autograph business has exploded. 

    RMD comment: CLCT has a micro-capitalization of about $230M. The average daily volume is 30K. Compare this to Bank of America (BAC), with a market cap of $235B, trading 106M shares/day, and Apple (AAPL), which trades 28M shares per day and has a market cap of $754B (the most valuable company in the world).
    This allows me to make several important points:
    1) Peter Lynch of Fidelity Magellan fame loved stocks like this that no one else follows. You actually can have an edge over the big boys.
    2) I have collected baseball cards since 1958. This is a perfect example of investment ideas from your daily life.
    3) Widely-owned stocks typically trade in penny increments: bid: 103.34, ask 103.35. This stock can be: last trade 25.57, with a bid of 25.40, ask of 25.75, a spread of 1-2%. You must put in a limit price and be patient. Because they are thinly traded, such stocks can be quite volatile. Also realize these stocks can be more difficult to sell than a widely traded stock such as GE.
    4) You must research investments for yourself. Don’t just take anyone’s opinion—including mine.     
    I had a handful of patients from the Macon area (about an hour north of Columbia) with Italian surnames. After I read Sowell’s book, I asked why their families settled in a small town in northern Missouri. “To work in the coal mines” was always the answer. One man was a relative of world heavyweight boxing champ Primo Carnera (Look him up on Google. Not much of a boxer, but an awesome physical specimen).
    When you look at something close, your eyes converge (come together). When you look at something far away, your eyes diverge (look apart). When you put your head down, the ground is always close, so your eyes converge. But: if you are on the edge of a cliff and look down, what you see is far away, so your eyes diverge. I read many years ago that this causes a natural fear reaction in almost all mammals: you don’t want to fall off the cliff. There is a reason for the saying “Don’t look down”. As I remember, mountain goats (and presumably similar species) don’t have this natural fear response.
    RMD comment: Dies this apply to Mohawk Indians? Is it why they are fearless high-level iron workers?   

    My father, John Arthur Doroghazi, was born 100 years ago, April 2, 1917. Joseph and Elizabeth (nee Biro (Bee-doh) translates from Hungarian as Judge) Doroghazi had 9 live births. Only Dad (born #3), Uncle Steve (b 1919) and Uncle George (b 1925) lived to adulthood. Causes of death included scarlet fever, diphtheria, and the great influenza epidemic of 1919.
    In the 70s, there was a public service commercial on the TV in the St. Louis area with a person holding a vial of DPT (Diphtheria, Pertussis (Whooping Cough) and Tetanus) vaccine. They said “100 years ago, parents would have given everything they have to get this for their children. Now people won’t get it for free”.
    RMD comment: I believe the British physician (who has since lost his license) that said there was a relation between vaccines and autism has done one of the greatest dis-services to humanity as anyone over the last 20 years. Vaccinations, along with the germ theory and sterile technique, are arguably the greatest medical advances in the history of humanity.       

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