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Strange Things in the Precious Metals
Issue #531, July 17, 2018

Buying Years of Retirement
Issue #530, July 09, 2018

Rent-A-Kid for Retirement
Issue #529, July 02, 2018

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


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

A Story From Vegas

Issue #454A, January 25, 2017

    It looks like the DJIA, S&P 500 and NASDAQ will all close at a record high today. The VIX (Volatility Index) dropped to a multi-year low. This is all very bullish action, and will be discussed in detail in the weekend’s newsletter. It appears the market believes Mr. Trump when he says he will cut regulations by 75%. 
    I was sitting at the bar in a restaurant in Vegas for lunch and overheard snippets of a conversation. Please read on, because I believe a man was being set up for a big con.
    Floyd was facing me and doing all of the talking. He looked about 34-37, shaved head, stubble growth, 5-10 and 220 pounds of solid muscle: this guy was built like a tank. Nice long-sleeve shirt. Jerry looked a little younger, maybe 30-32, a black, short beard, wearing a hoodie with hood down and a baseball hat. Unfortunately, he was facing away from me, so I didn’t get a good look at his face or overhear much he said. They were there before I came and there when I left about 30 minutes later. They each had a drink, but there was no food.
    This was not a conversation between equals. Nothing struck me to suggest they were merely friends. There was never a smile or a joke. This was not a mentor-pupil conversation. It was not meant just to relay information, as when one asks the opinion of an expert. It was not a legitimate type of salesman-customer conversation. These are factual, appropriately optimistic for the product, and often quite low key. The best salesman I ever saw had a rule never to be the first one to talk about the product. The customer would always say “OK Steve, let’s get down to business.”
    Floyd wanted to be convincing, but was not over-the-top like a tent revival televangelist. He was slightly overbearing, and wanted to dominate Jerry without Jerry knowing it. He was a touch braggadocios. There was no name-dropping. This was not a sexual seduction. He was a little mesmerizing, and meant to impress but at the same time to instill some doubt and also a little fear.
    Several words I overheard were insurance, malpractice and lawsuit. I sure hope neither was a physician: Nothing about them struck me as having the bearing, personality or intellectual gifts to be an MD. Several times Floyd said “investment”.
    RMD comment: The two words that immediately came to mind to describe this scenario were malevolent and sinister. I believe Floyd was setting Jerry up for a con. If someone you know is on your side tells you they have serious doubts about a new acquaintance, please pay attention. Con men are con men because they are manipulative and seductive. Never underestimate their power to do you wrong.
    In black jack, if the dealer has an Ace up, you can make an extra bet called “insurance” against them having a black jack. Their chance of a BJ is 31% (16/51). Insurance pays 2 to 1 (33.3%), so the house has a 2% advantage on your bet.
    Patron: “should I take insurance”?
    Dealer: “If the house offers something, it’s never in your favor”.
    RMD comment: Wow! That is the most truthful thing I have ever heard a casino employee say. Never forget that. The casino is in business because it always wins. This also has general applications: when someone proposes something, your first thought should always be “What’s in it for me”? The more high pressure and slick the salesman (as above), the more you must ask yourself this question. 
    I believe the toughest hand in black jack to play is A-7 vs. the dealer’s 9, 10 or Ace. You have soft 18, a nice but not powerful hand. The most common card in the deck is a 10 (10, J, Q, K), so you must assume the dealer has this and you are beaten. The book say you should take a hit. If you draw a 10, you have hard 18: you’ve not been hurt, but you didn’t improve. A 9 knocks you down to 17: you only win if the dealer busts. 4, 5, 6, 7 or 8 knocks you down to 12-16: now you’re hitting a stiff (you are likely to bust). Your dream cards are a 2 or a 3, giving you 20 or 21.
    I had A-7 vs. 10. The dealer was a Caucasian lady about 55. I always try to engage the dealers in conversation, treat them with respect, and tip for good service (Note: all the casino jobs are minimum wage: 70-80% of their income is tips). When I have this hand, I hesitate, scrunch up my face and lament.
    RMD: “I hate to hit this, but I know the book says you should”.
    When the dealer has a 10 or an Ace showing, they have already checked their hole card to see if they have a black jack: they know what they have. She said “there are only 2 cards that will really help you”. I took that to mean she had a stiff and I should stand and take my chances. Sure enough, she turns over a 3 and goes on to bust.
    RMD comment: treat people nicely and sometimes they will give you break.
    Several weeks ago I discussed the concept of gambler’s ruin to provide analogies for your general investments. I noted the one house advantage you will never overcome is that the house will never run out of money. A subscriber wondered how large a bet the house would be willing to take. For perspective, the market capitalization of Wynn (WYNN) is about $9B. MGM is about $16B.
    RMD comment: I can’t imagine a casino would take bets that even approached 5% of their market cap. Some time ago I read a casino reported lower quarterly earnings because a person won $150M at roulette. Likewise, it’s hard to imagine someone who has accumulated that kind of money would be willing to risk $500M at the tables.             

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