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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.

Human Capital, Education and Wealth

Issue #510, February 19, 2018

    Throughout history, 3 things have always represented wealth: 1) Land, 2) gold, and 3) human capital, the goods and services generated by a person’s toil.
    But if you think about it, land can only generate wealth if it’s worked to produce a crop, or mined for minerals, or timber or game are harvested, or a dwelling or business is built. In the end, if a home or apartment building or factory sits vacant, it’s only bricks and mortar and machines. Gold, and now paper assets such as stocks, bonds, bank deposits, derivatives and even cryptocurrencies, are wealth, but only because they represent a storehouse of value, of wealth previously created by someone’s work, accepted in exchange for land or goods or services. I submit that in the end, all wealth derives from human capital.
    Who succeeds in the US (or anywhere)? The people who work the hardest and are the best educated. All 5 of my grandparents came from Hungary (Mom’s dad died when she was 5, and my grandmother remarried). Grandma Nagy had an 8th grade education, everyone else went only through the 3rd or 4th grade. All of the next generation graduated from high school. Among the grandchildren and great-grandchildren, and their spouses, there are 2 physicians, an Optometrist, 3 attorneys, 3 MBAs, a PhD biochemist, a dentist and an accountant.
    An education can’t be taken away from you. A dictatorial government can take your land and your gold and your paper wealth, but they can’t take away your education. A robber can stick a gun in your face and steal your watch and your rings and your wallet, but they can’t take your education.
    I write about this now because of multiple books I’ve read recently about the success of various racial, religious, ethnic groups and nationalities as they move around the world. It is the main topic of several of Thomas Sowell’s books (see Issue #464, 4/3/17, 466, 4/17/17 and 467, 4/24/17). In The Other One Percent: Indians in America (Chakrevorty, Kapur and Singh), the authors attribute the success of Indians in the US to their human capital; the smartest, best educated and hardest working are the ones that came over. In The Story of the Jews: Volume Two: Belonging 1492-1900, (Schama, CCCO), in the mid-1500s in Europe, Jews were prohibited from most trades or professions, restricted mostly to being merchants or middlemen, physicians and money changers, livelihoods based upon a high degree of human capital (and, ultimately, monetary capital). The few places in Europe where the Jews weren’t persecuted, such as Antwerp and some of the city states in Italy, had vibrant economies. At the time, the Jews were more accepted in the Ottoman Empire than Christian Europe. The Cuban exile community in the US (at least one of whom takes this Newsletter) is so successful because Castro drove out the intelligentsia, the ones with all the human capital.
    Stressing education does not contradict my previous comments that I believe too many go to college. You must look at an education as an investment. It is a far better investment to obtain a degree in Engineering or Computer Science or an MBA or an MD or DDS than a degree in General Studies (whatever that is). In many cases, it’s better to obtain training as a carpenter or plumber or welder than become indebted to obtain a degree in Psychology or Acting from a prestigious university.
    Get a marketable education, work hard, save your money and stay out of debt. You can make it anywhere on earth. 
    Purdue Pharmaceuticals, makers of OxyContin, announced on Monday that their sales reps will no longer detail physician’s offices directly, and will cut their sales force in half.
    RMD comment: two issues ago I suggested that the main driver of the opioid epidemic was the importance of keeping high patient satisfaction scores. In the last issue, a subscriber noted that surely contributed, but suggested the more important issue was that the opioid makers had co-opted, and even bribed, the opinion makers in the medical establishment. It appears he was correct. Let’s hope this reset will be an important step in the right direction to bring this physician-prescribed opioid epidemic under control.
    It is alleged that Aetna (AET) has been denying more expensive medical treatments as recommended by the patient’s physician without an MD reviewing the case records.
    RMD comment: In my Commentary in the November, 2016 issue of The American Journal of Medicine (129;11:1141-1142) entitled “Negative Secular Trends in Medicine: High Hospital Profits” I say “Is it logical to operate a hospital for profit”?
    Is it logical to operate an insurance company for profit? Think about it: for a non-profit, after their costs, the remainder is spent on medical care. With a for-profit, after their costs, then after the distribution of profits to investors, there is less to spend on medical care. For-profits say they are more efficient. That has never been shown. To the contrary, 49 of the 50 most expensive hospitals in the US are for-profit.
    Quote of the year.
    Medicare and the insurance companies now pay physicians directly for their services. In bygone times, the patient would pay, and then receive reimbursement after submitting their bills.
    Mid to late 80s. We were in a large multi-specialty group called Boone Clinic. At the end of every month we received a list of patients who hadn’t paid their bills. You could choose to just write them off or send them to collection. One of the pulmonary physicians had taken care of a lady during a rocky and prolonged hospitalization. His bill was many thousands of dollars. He sees her back several times. He then receives notification that Medicare had reimbursed her, but she had not paid her bill to him.
    At the next visit, she drives up in a new set of wheels. He mentions that he knows she has received reimbursement. She says “Doctor, I got paid, didn’t you”?       

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