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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

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


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

Who Can You Trust, and How to Spot a Con Man

Issue #399, January 04, 2016

    In Chapter 20 of The Physician’s Guide to Investing, 2nd Edition, I provide insights on “Who can you Trust?”, and in Issue #10 (2/20/07) of this newsletter I discuss “How to Spot a Con Man”.
    Who can you trust?
    One of my main goals is to instill a sense of healthy skepticism. There are some times when you ae better served being skeptical and even cynical.
    Make people earn your trust.
    The people to be most trusted are your blood relatives.
    During the Great Depression, some Hungarian friends of my grandparents were in a legal tussle and signed their home over to them until it blew over. This is how I would define complete trust: someone you trust enough to sign your home over and expect to get it back. Someone you can trust with anything is worth more than gold.
    Want to hear a provocative but realistic comment? Can you trust your spouse? Fifty percent of marriages end in divorce (see Chapter 23, Divorce: Beware of Gold-diggers).
    If there are 10 people, inside and outside of your family, you can trust with anything, you are either 1) a saint, 2) terribly naïve, or 3) come from a big and good family.
    As physicians, we are taught to trust our patients. In the real, legal, financial world, blind trust is a formula for disaster. Physicians must learn to turn off, to segregate, this blind trust outside medicine. I make an analogy to a prize fighter. Inside the ring, he tries to beat his opponent senseless. Outside the ring, such behavior is not socially acceptable.
    Be hesitant to invest with someone who has previously lost you money, not that they may be dishonest, but rather because they just may not be a good investor.
    How to spot a con man:
    Greed. To quote George C. Scott in “The Flim-Flam Man: “Greed’s my line. Greed and 14-karat Ignorance. They never let you down…you can’t jip an honest man”. The higher the promised return—“double your money in 3 months”—the more likely they are bogus. Any return above 20% should immediately make you suspicious. 
    Charming and slick. You are a 57-year old man who looks, acts and talks like Archie Bunker. A drop-dead gorgeous 25-year old lady starts to hit on you. There are only 3 possibilities. 1) You drop to your knees and say “Hallelujah, there is a God”. 2) She is stoned, or 3) she just wants your money.
    Checkered past: entrepreneur (can mean anything), then salesman, then preacher (watch out here), then water ski instructor, then real estate developer. 
    Flash, Glitz and throws money around. See more below.
    Religion, race, color and creed: referred to as “affinity” scams. “You’re a Christian, I’m a Christian. You can trust me”, or “us African-Americans need to stick together”.
    Secrecy. The “investors” are told to keep things a secret, mostly so the pigeons don’t out the perps.
    If you don’t understand an investment, your concerns are well founded.
    Inconsistencies should immediately raise a red flag. You were told this, and it’s not right. You were supposed to get a check, and you didn’t. In the 1980s, a check-kiting scheme by EF Hutton was only brought down after a clerk at a tiny bank did their job and wouldn’t clear a check because the funds weren’t in the account.
    I write on this now for 2 reasons. First, it never hurts to review basic topics. Second, flamboyant, glitzy, outrageous behavior should always raise your suspicions. 
    Albanian-born ex-CEO of Turing Pharmaceuticals Martin Shkreli first gained fame (infamy) earlier this year when Turing purchased the rights to decades-old generic drug Daraprim and (rapaciously but legally) raised the price from $13.50 to $750 a pill. However, 2 weeks ago, Shkreli was arrested and charged with multiple counts of securities fraud unrelated to the purchase and repricing of the drug.
    Shkreli previously tweeted that he was “the world’s most eligible bachelor, but “sorry, you have to be a shareholder to meet me”. He also would stream live on the Internet hours of himself playing chess, strumming a guitar, answering questions from strangers, or mocking Democratic presidential candidate Bernie Sanders. He recently purchased the rights to a Wu-Tang Clan album for $2M. 
    I guarantee that at least once in your life a con man will try to work his evil ways on you. Flamboyant glitz should always cause your antenna to shoot up. I know of a con man who rented a jet just to impress the stooges (unfortunately, it worked). Consider this: you want the person who manages your investments to have respect for money, to be concerned about every basis point (1/100th of a percent) of return, not to be like Ex-Tyco CEO Dennis Kozlowski, who spent $6,000 on shower curtains, $15,000 on “Dog umbrella stands”, and $2M on a birthday party. I prefer people who are straight arrows, maybe even a little dull, if for no other reason they are more like me, and I find them more believable.
    One more point. Shkreli was named to the Forbes’ 30-under-30 list. Watch out when someone starts to name drop. It makes no difference to you if Johnny Carson or Walter Cronkite have chosen to invest. You must make up your mind for yourself.
    Below is a weekly chart of the DJIA, with the top in May, followed by a plunge in late August. The market rallied into year-end, but was not able to make a new high, and looks like it might be rolling over. Lowry’s numbers continue to deteriorate.
    RMD comment: watch 17,000 on the DJIA. If it breaks through this, it will probably re-test the lows of August/September. I forgot to add in last week’s note that 2016 will probably be more volatile. Watch the VIX (the Volatility Index).

    There have recently been a lot of ads on TV to donate to this charity or that.
    RMD comment: As a general rule, avoid any charity that advertises on TV, because too much of your donation goes to pay for the ads, and little, or very little, goes to programs. You are far better off giving to your church, or local Salvation Army or Boy Scouts. There are websites such as that provide a basic evaluation of a charity, and provide numbers on how much goes to programs vs. ads and salaries.
    I also wonder about stores that will take the change on your bill and give it to a charity. Sounds like a lot of work to raise a little money, a long run for a short slide. Just drop the change in the Salvation Army kettle on the way out.     

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