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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 III of III

Issue #467, April 24, 2017

    This will finish me review of Sowell’s latest, and presumably last, book Wealth, Poverty and Politics: An International Perspective.
Social Factors
    In American families where the parents are professionals, children hear an average of 2,100 words per hour. Children of working class parents hear 1,200 words per hour—children whose family is on welfare hear 600 words per hour. “It is painful to contemplate what that means cumulatively over the years…(Poor children) are also handicapped in both the quantity and the quality of their parents…it is hard to escape the conclusions reached by The Economist: “Nothing the government can do will give the children of Cabin Creek (see below) the same life chances as the children of Bethesda”.
    In 1938, the percentage of blacks attending Stuyvesant High (the elite NYC public high, with admission based on test scores), was almost as high as the proportion of blacks in the city. In 1979, blacks were 12.9% of the students, 1995, 4.8%, and by 2012, only 1.2% (about 2/3 are now Asian, as Jews were in the majority before WW II). “None of the usual explanations of racial disparity—genetics, racism, poverty or a legacy of slavery—can explain this retrogression…Clearly, something else was happening…One of the few possibilities is culture within the black community”.
    There have long been different cultures among blacks. After the Civil War, one of the few quality educational institutions for blacks in the South was Dunbar in Wash, DC, the first black public HS in the country. The school graduated almost all of “the first blacks who” pioneered in many fields. “From its beginning, it had a wholly different cultural orientation from that of the ghetto”. It also issued a handbook on how students should behave in school and in life as a whole. The success of Dunbar grads created resentment among many blacks, because it represented “elitism” and the blacks were “acting white”. 
    “The changing social culture of the 1960s and beyond included a celebration of ghetto culture, essentially an offshoot of the dysfunctional redneck culture of the South…So pervasive (was this influence) that even middle-class black youngsters felt a need to adopt attitudes, values and behavior from the ghetto culture, as a sign of social solidarity or a need to avoid the stigmata of “acting white”. Sowell notes one of the few black leaders to resist this trend was Martin Luther King.
Political Factors
    “Few words have been repeated so often or so insistently as “diversity”, without a speck of evidence being offered or asked to substantiate its claims of economic or social benefits. And the evidence to the contrary is huge”.
    To show how politics can effect wealth and success, Sowell looks at Nigeria, one of the poorest and most turbulent countries in the world. “In 2010, there were 260K Nigerians in the US, 0.75% of the black population. Yet in 2013, 20 to 25% of the 120 black students at Harvard Business School were Nigerian…Nearly ¼ of Nigerian households in the US have incomes of more than $100K…the way Nigerians progress under American institutions…is much like the way the overseas Chinese and Indians (and Cubans) progressed far better outside their homelands”.
    Sowell provides evidence that every increase in the minimum wage results in an increase in unemployment among black youth. (RMD comment: to take this to its illogical conclusion, if the minimum wage were raised to $100, we would all be rich).
    “Perhaps the most culturally isolated of all American ethnic groups are those descendants of the indigenous American Indian population who still live on reservations with great legal autonomy, but with lower per capita incomes than blacks, Hispanics or other American Indians not living on reservations”.
    Since the triumph of the welfare state in the 1960s, which resulted in the disintegration of the two-parent families, there has been a “retrogression” in academic achievement, and more welfare dependency, unemployment and crime. “Meanwhile, the children of low-income immigrants, not burdened by ideology…do far better”.
    “Some people may imagine that one way of showing empathy with less fortunate people…is to take a non-judgmental attitude towards their transgressions…Barbarism is hardly a gift to any community”.
Implications and Prospects
    “The leadership of lagging groups is often a major impediment to the groups’ advancement, since leaders have every incentive to promote a vision in which the groups’ problems are caused primarily, if not exclusively by the sins of other people…When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear”.

    Several weeks ago I mentioned Blackstone Group (BX) and their 5% dividend. On Thursday, BX reported earnings of 82 cents per share vs. an estimate of 68 cents, up 135% from the 31 cents in the same period last year. BX was up on good volume, but didn’t quite make a new recent high.
    RMD comment: Momentum investing is when you buy something just in hopes it will go higher. If you would buy BX on a breakout, I wouldn’t consider that pure momentum investing, considering the breakout is based on strong fundamentals.
    On Saturday we went to the annual Gala for the Museum of Art and Archaeology. I was on the Board for about 20 years. I donated a signed copy of The Alien’s Secret and a one-year subscription to The Physician Investor Newsletter. I put no value on it (thus I do not claim it as a charitable donation), so whoever is the lucky purchaser can claim the entire purchase price as a deduction.
    RMD comment: I again remind you: Don’t purchase anything at a charity auction, because you can only take a deduction for the amount above the fair market value. Give cash and deduct the full amount. I assure you the charity will be quite happy.
    In anticipation of earnings reported after the close on Monday, Netflix (NFLX) was +4.33 to 147.25 on 2.5X normal volume. The Street at first seemed disappointed, and in the after-hours it traded as low as 141. By one hour before the open on Tuesday, NFLX was trading at 148.5. That was the high for the day, NFLX closed lower.
    RMD comment: The only time to trade in the pre or after-market sessions is if the stock hits your sell or buy target. To remind you: you must use a limit order, or you will get clipped by the sharpies. I trade at Charles Schwab: they will not even accept a market order in the off-hours sessions. 
    Jerry West, Laker great of the 60s and early 70s, was a native of West Virginia, and played college ball for the Mountaineers. His nickname was “Zeke from Cabin Cree

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