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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

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


By Robert M. Doroghazi, M.D., F.A.C.C.

Trump and the Markets: The Good

Issue #445, November 21, 2016

    While I was in med school from 1973-1977, the Chicago Cubs were pretty weak. I remember watching a game on TV. The Cubs had runners on 1st and 2nd, and the batter hits a triple. The Cubs scored—no runs, both runners were thrown out! The headline in the paper the next day was “Despite great odds, Cubs lose”. That’s about how I would sum up the recent election: despite great odds, Clinton loses.
    Because Trump is such a wild card (that’s not a bad pun), the markets were fearful of his victory. At one point early Wednesday morning, the DJIA futures were down 800 points, at about the Brexit low. The market then abruptly changed its mind, that a Trump Presidency might not be so bad after all, and was up for 7 days in a row.
    So: where might things be headed?
    1) I think most important is that after several head fakes over the last 5 years, the 35-year bull market in bonds appears to be over, and interest rates are headed higher. The reason: Trump’s business career was built on debt. He understands it, and embraces it. To finance infrastructure spending and possible tax cuts, we’ll need to borrow more.
    A) It benefits the banks, who can charge a higher spread between deposits and the money they loan out. XLF, an ETF of the largest banks, is up 10%. The regional banks are up even more.
    B) It will benefit savers and anyone else reliant on fixed-income, such as pension funds, insurance companies, and foundations.
    C) Because of the puny yield from bonds, the high dividend paying stocks, like the Utilities, REITs (Real Estate Investment Trusts), and consumer staples (like Proctor and Gamble, PG) have outperformed over the last few years. Now they are getting crushed.
    D) The US Dollar is more attractive, and has broken out to a multi-decade high. In the short term, this hurts commodities, emerging markets (because they are often the exporters of commodities), and the precious metals, which have already weakened. In the longer term, a strong dollar could hurt US exports. As I have emphasized for some time, currencies are the name of the game.
    E) Higher interest rates hurt debtors. Our government has been able to limp along only because interest rates are so low. If we borrow even more at a higher rate of interest, there will be trouble, and as Harold Hill says in The Music Man, “Yes I’m talking Trouble, that’s Trouble with a capital “T’. The lead article in today’s Barron’s is on this subject. Borrowing pulls growth forward from the future, which makes the present look better. The problem is that the future will come, and the debt must be serviced.
    2) With the Republicans controlling the White House and both branches of Congress, there is the possibility for real reform.
    A) A signature of the Obama administration was going around Congress to impose arbitrary and expensive regulations. This is what I see as one area for real, positive change. This is why the Russell 2000, representing many of our small businesses, has performed so well since the election.
    B) There will almost certainly be reform of international tax rules, allowing our big multinationals with billions parked overseas (like Pfizer (PF), Microsoft (MSFT), Apple (AAPL), etc.) to repatriate the money, which totals about $2T, to the US. That would create some jobs.
    C) There could be reform of individual income taxes, but don’t hope for a lot. Likewise, any cut, and especially any simplification, is a step in the right direction.
    D) The goal of the radical Greens is straightforward: they are anti-progress, and anti-capitalism. Every reasonable person wants a clean environment, but the last administration pandered to the far left. There is the possibility for common sense policies on energy and environmental issues.
    3) Specific areas and sectors.
    A) Trump wants to fund infrastructure projects. Copper has zoomed higher, as have related stocks, such as Freeport-McMoran (FCX) and Vulcan Materials (VMC).
    B) The drugs stocks had been beaten down in anticipation of a Clinton victory. They have since rebounded.
    4) The only reason I voted for Mr. Trump is because the next President will have at least one, and possibly two (Ginsberg) or even 3 (Kennedy) Supreme Court nominations. The far left wants to gut the First and Second Amendment. Likewise, I have always been pro-choice. The Supremes better leave Roe v Wade as is. 
    As Bret Stephens said in his weekly column in the Wall Street Journal, considering that Trump has no previous political or military experience, he is going to do either a really good job or a really bad job. We just talked about the Good that might happen. In an Interim Bulletin, I’m going to talk about the potential Bad and Ugly.     
    I hope you found the above interesting, but what counts to your pocketbook is—where is the market headed? Over the next week or two, it will probably pause or pull back a little. After this, it will probably go to new highs.
    Heart surgeon Dr. Denton Cooley died at age 96.
    RMD comment: Cooley was a great physician. He is worthy of our respect.
    In 1988, after the bust in the oil patch and the downturn in Texas real estate, Cooley was forced to declare bankruptcy, unable to service debts of $100,000,000.
    RMD comment: This is what breaks my heart: solid, honest, good, hard-working docs make jillions of bucks and end up in bankruptcy. We all know some. Debt destroy wealth. Debt is a financial 4-letter word. The goal of a physician is not to be the richest guy in town, because you won’t be. Your goal is to work hard, save your money, and stay out of debt, so you can live the upper-middle class life of a physician, retire when you wish rather than work because you must, and to be able to provide your children with a superior education and all the other advantages that come with money. 
    There was a post on Facebook showing a man dressed like a deer hunter kneeling over a long-horned cattle saying that he got his buck.
    In the 60s, George Carson was the outdoor editor at one of the St. Louis papers (I can’t remember if it was the Post Dispatch or the long-defunct Globe Democrat). He did a weekly session on KMOX radio “At your service”, where people called in with questions and comments. It was deer season. Carson said he was at a deer check station when one hunter brought in a goat, and another brought in a pig—shot 6 rimes! He said a farmer had the unpleasant experience of his cattle being shot. He painted “COW” on the cattle. One was shot. Someone posted that they were at the deer check station when a man brought in a donkey.
    RMD comment: I am a strong believer in the 2nd Amendment and the right to bear arms, but there are some people who would probably be better off without a weapon. 

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