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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.

Thomas Sowell: Pat II of III

Issue #466, April 17, 2017

    In this second part of my tribute to Thomas Sowell, I will review his latest, and presumably last, book Wealth, Poverty and Politics: An International Perspective.
    “Back in the time when it was common to speak more frankly about different levels of achievement by different peoples”.
    RMD comment: that neatly sums up the fallacy of political correctness.
    Knowledge, skills, habits and discipline create wealth. A disproportionate amount of advancement has come from cities. Anything which causes isolation, such as water, deserts, and mountains, causes people to fall behind. Modern transportation and communications have helped, but when a culture has been behind for centuries, it is difficult to catch up because civilization continues to advance.
    Sub-Saharan Africa is a prime example. They did not benefit from Rome, China or Western Europe. The coastline lacks good harbors, many of their rivers are unnavigable. Although many countries are asset-rich, they continue to lag behind most of the world. Another problem is language diversity, which causes cultural isolation.
    RMD comment: Nothing, including religion, ties people together more than language. The language of the US is English and must remain so. Look at Quebec and Canada.
    Throughout history and to the present day, mountainous areas are characterized by poverty, isolation, backwardness and illiteracy. They are also characterized by lawlessness. Because of a lack of opportunity, these areas suffer a constant brain drain.
    RMD comment: Outside St. Louis, Kansas City, Springfield and Columbia, Missouri is quite rural. If you’re a really smart, hard-working kid in a town of 20K or smaller, there is no reason to stay there.
    “The most striking social difference between living in the temperate zones (Europe, the US and China) and living in the tropics…is the life-threatening challenge…of growing enough food during the limited spring and summer months to last through the cold winter months…This meant that people living where seasons changed had to develop a sense of urgency about time…and discipline…qualities not so necessary where food could be grown year round.” Accumulating food for the winter also “required the discipline of savings”. 
    Culture is important to achievement. Geography, weather, genetics; are of little to no use without the cultural prerequisites of human capital. For centuries the Germans had a specific set of skills, and took them wherever they went, with particular stress on education. The Germans pioneered kindergarten and the research university, and was one of the first European nations to have free and compulsory education. They excelled in military skills. Pershing and Eisenhower were of German ancestry.
    Cultures can be receptive or isolated. “In the Arab world, the number of books translated from other languages is just one-fifth of the number translated by Greece alone….Put differently, Spain translates more books annually into Spanish than the Arabs have translated into Arabic in a thousand years”.
    Western civilization embraced the Arabic numerals as superior to the Roman (MCCCCXCII = 1492. In 1638, the govt. of Japan cut itself off from the rest of the world. When Commodore Perry sailed to Japan in 1853, the Japanese quickly recognize their backwardness. They embraced Western Culture, and within half a century, became, and remain, an industrial power.
    Ethnic or immigrant minorities, such as the Chinese in the US and Southeast Asia, the Jews in Europe and the US, the Lebanese in West Africa, although they often start with only the clothes on their back, and succeed through hard work, are easily demonized by the less successful majority. “Politics promoted a sense of grievance against those with a more successful culture, and a sense of entitlement” to the majority groups bypassed. 
    The most corrupt countries are the poorest. “Honesty is more than a moral issue. It is also an economic factor”. There is arguably no country more endowed with natural resources than Russia, but widespread corruption has existed since czarist times.
    Quality of education is as important as level of education. “People who have acquired academic degrees, without …economically meaningful skills, not only face disappointment and dissatisfaction, but often become negative factors in the economy and even sources of danger…In many places and times, soft-subject students and intellectuals have inflamed hostility, and sometimes violence, against many other successful groups”.
    I’m barely half way through the book and have much more to discuss, so I’ll finish this in a subsequent issue.         

    Two weeks ago I mentioned Collectors Universe (CLCT), the micro-cap stock that grades coins (PCGS), baseball cards (PSA) and authenticates autographs, and pays a 5% dividend. The next Thursday, CLCT was at one point up more than 10%.
    RMD comment: I’m thinking “Wow, my subscribers will be impressed”.
    Last week, CLCT was off more than 6%, closing slightly below where I mentioned it.
    RMD comment: Reality check. When you start to think you’re an investment genius, you know you’re not. This is a perfect example of Talib’s book Fooled by Randomness. To make an analogy to everyday life, even a blind squirrel can find an acorn sometimes.
    Gold has been strong, up from $1,200 to $1,285 in the last 3 weeks.
    RMD comment: Patience. Gold needs to show a lot more strength. It must close above $1,390, the high of last summer, before I can recommend it to you.
    I have learned there is a lot more to buying new tires than just buying tires. In the past, I would just replace the tires with ones of equal quality and drive off. In 2012, I bought a BMW 750, with the goal that I’ll never have to buy another sedan. The tires have 29K miles and need replacement, so I called a local subscriber who used to own a tire store (RMD comment: I like to think I have a 2-way relationship with subscribers. I’m flattered that you appreciate my advice, and I have enough subscribers that I can get personal advice on almost anything.). He came over and checked things out. “They wore out so fast because they’re high performance tires, made to go up to 170 MPH. You don’t drive that fast—-do you”?
    RMD comment: Next time you buy a new car or new tires, be sure to tell the dealer your driving habits. Ex: if you live in rural Minn., you need tires that are good in snow. If you’re a 66-year old straight-laced fuddy-dud retired cardiologist who is scared to go more than 2 MPH over the speed limit, you don’t need high-performance tires.   
    Taboo: Why Black Athletes Dominate Sports and Why We’re Afraid to Talk About It (Jon Entine, Public Affairs, 2000). This is to sports what Sowell’s books are to politics. Blacks dominate speed positions while whites dominate power positions (such as football offensive line and weightlifting).
    RMD comment: Because of their thick, heavy bones, it is speculated that Neanderthals were significantly more powerful than modern Homo sapiens. Do you think the residual Neanderthal genes in whites of European origin explains why they dominate power positions?   


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