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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.

Leasing a Watch: Don’t

Issue #476, June 26, 2017

    One way I judge my newsletters is the feedback. It seems the less likely you are to find the topic discussed elsewhere, such as “A Wedding as an Investment”, (Issue #241, 12/24/12), and “Buying Jewelry: Gold, Diamonds and Pearls” (Issue #468, 5/1/17), or the more off-beat, “Critters and Varmints in your Home and Yard” (Interim Bulletin #473A, 6/7/17), the more they catch your eye. It is clear that the recent newsletter on “Leasing a Car: Don’t”, generated a lot of interest.
    In the June 19 Penta issue of Barron’s, there is an article “Just-in-Time Watch Rentals”. Eleven James, in NYC, rents watches. Here’s how it works. There are four levels of monthly “membership”, starting at $149 per month for watches worth $3,000 to $7,000, to $999 for watches worth $30,000 or more.
    (RMD comment: this man is clearly a sharp merchandiser. $999 rather than $1,000, which sounds so expensive. His products aren’t leased or rented, rather, you must be a “member”, implying exclusiveness. 
    Let’s run the numbers. For the $3K-7K group, the average is $5K. Round $149 to $150. $150 x 12 = $1,800 per year. At that price, you could buy the watch outright in less than 3 years. For the most expensive group, say the average watch is $50K, and round $999 to $1K. $1K x 12 = $12K per year. In a little more than 4 years, you could buy the watch. The vehicle you drive to work every day will eventually be worth zero, whereas quality watches are made to last a long time, basically your lifetime (I don’t say “forever”, because that is a very long time). My Bulova Accutron lasted 36 years. At the end of 3-4 years, the “members” have paid for this man’s watch collection.
    When leasing a car, you are terribly over-paying, but it is something you need: you have to get around. But leasing a watch? Not only do you have nothing financially—zero—to show for it, but you really don’t need it. Although I and many of my generation still wear watches, many younger people don’t. They just turn on their computer or cellphone and know the exact time.
    It is clear, at least to me, that this is just plain ego. Think about it: you are renting, sorry, leasing, bling! My “Dad, Grandpa Nagy Rule” applies here; would they be impressed? No. The man (almost) admits as much in the article. He says this new approach represents a “generational difference in lifestyle priorities and interests. The millennial generation has an aversion to long-term commitments”.
    RMD comment: We’re not talking about getting married, or moving from Columbia, Missouri, to Whiz-bang, Texas, or giving up a lifetime appointment to the Supreme Court. It’s a watch, man. A watch.
    ‘The sharing-economy model allows them to access experiences and embark on journeys otherwise unattainable” (see 2nd paragraph below for the rest of this quote).
    RMD comment: Uber is a good example of the power of the sharing economy. Rather than your automobile, your second largest capital asset after your home, just sit there for 23 hours a day, it is put to good use. This fellow is a savvy promoter who has noticed (created) a niche, and exploited it. Good for him. He’s just trying to make an honest buck.
    To finish the above quote: “without having to spend a major chunk of their savings”.
    This discussion allows me to make several points.
    1) It’s doubtful that people with this mindset are going to have a lot of savings. I don’t quote Ann Landers often, but someone asked her about the old saying “a fool and their money are soon parted”. She said (this is from 40 years ago, I am paraphrasing), “I didn’t know a fool ever had any money”.
    2) Such things can be enticing. It’s up to you to show discipline and not be seduced.
    3) Besides your home, if you can’t pay cash for something, you can’t afford it.
    4) Aside from the occasional situation where you need an expensive piece of equipment only once for a specific job, like renting a U-Haul or a pump, don’t lease. Remember: you don’t accumulate wealth buying, or leasing, depreciating assets.
    5) Presuming you can afford it, I encourage you to buy a quality gold watch. They last a long time, they look nice, and they are portable wealth.
    6) People who are careful with their money go through this kind of mental exercise all the time. Round numbers off or estimate, do the quick math, and you can easily determine if it’s worth it or not.
    7) Sometimes when I hear what people do for a living, I say “why couldn’t I get some of that action”. I once read someone got $1,500 for doing Jennifer Lopez eye brows. Think about this fellow renting watches to a bunch of millennial wanna-bees when you’re busting your chops on call over the July 4th weekend.
    You go to college for 4 years, med school for 4 years, and train for another 3-7 years. Don’t waste your money on foolishness like this. 
    Pharma has been doing well. Merck (MRK) is on the verge of breaking to a new recent high. Pfizer (PFE) has been strong. The biotechs (see the ETF IBB) are ripping, breaking out strongly to a 1 ½ year high, so I asked the opinion of an original subscriber with 30 years’ experience in the pharmaceutical industry.
    “Biotechs have been doing well since Trump’s election because the feeling is that the high prices will stick, but I don’t think investing now will bring a windfall. The reason for the recent bump is because the details of Trump’s health plan have emerged”.
    RMD comment: It appears to depend on whether the Republicans can pass their health care bill. I believe Trump is the most pro-business President since Coolidge, even more so than Reagan or Eisenhower. If many of the things he wants get passed, the market will do well.

    From Yahoo:  Derek Jeter is still in the bidding to buy the Miami Marlins, but his group needs more time to raise the $1.3B to complete the deal.
    RMD comment: I use this to illustrate the importance of credit, being able to borrow. It’s just as importance in your personal life as in your business.
    When I spoke in Youngstown, OH, in June, a House Officer (a semi-archaic term referring to people doing their Internship and Residency. In bygone times, Interns and Residents lived “in-house”. When I was an Intern at the Mass General, we all had rooms assigned at the Walcott, which no one used. It was torn down before I left), asked me about the first investments he should make when he had the basics covered.
    RMD comment: I’m surprised I haven’t written about this before. It will be the subject of next week’s newsletter. 
    Last weekend I played in the World Series of Poker Super Seniors event in Las Vegas, for those 65 and older (I’m 66).
    RMD comment: I’ve given up playing in the open events, available to all those 21 and older. I realized some time ago I’m no longer competitive against the kids. Look at athletic and intellectual performance. The body peaks at about age 26-27 (depressing isn’t it). There aren’t any 65 year olds in the NBA or NFL.
    I had been thinking about my play and realized I must be more aggressive, which I clearly was in this event. Three related quotes. 1) “You don’t win playing scared poker”, 2) “If you’re not caught bluffing at least once, you’re not bluffing enough” (I made one stone-cold bluff, got re-raised, and promptly folded), and 3) “Fortune favors the bold” (I believe Caesar said that).
    !720 people bought in. They paid the top 15% = about 257. Although I admit I had good cards, I also played very well. With about 500 people left, I had about 34,000 chips. Average stack about 15,000, so I was in great shape. Just staying even, I would easily finish in the money.
    First hand after moving to a new table. Lady raises and I call with a pair of 6s. Flop: 3-6-J. I flop a set (3 sixes). Pot about 4,000. I bet 1,500. I don’t want to let her in for free, but don’t want to chase her away. She raises me all-in for another 20,000 chips. I snap call, and turn over my set of 6s. She winces and turns over a pair of Queens.
    RMD comment: 1) She way over-bet the pot. A call would have been weak, a re-raise of 5-6K would have been about right. 2) Don’t make a bet that only a better hand will call, such as another over-pair, (AA or KK), or, like me, trips. The hands that she wants to call, like A-J, are going to fold to that kind of bet.
    After the flop, there are 45 cards left in the deck. Chance of a Queen on the turn = 2/45. It was a 7. The river: chance of a Queen = 2/44 = 4.5%. Of course it’s a Queen, or I wouldn’t be telling this story. I was crushed emotionally, short-stacked, and busted out shortly thereafter. If I had won that hand, I would have had a monster stack, near 4x the average. I would have easily gotten into the money, and maybe even contend for a big prize. First place was about $270K.
    1) This is why they call it gambling.
    2) I’ll take those kind of odds any time.
    3) Even with the odds tremendously in your favor, nothing is guaranteed.
    4) I admit, I’m very competitive. This still burns me.
    I highly recommend Killers of the Flower Moon: The Osage Indians and the Birth of the FBI (Grann, Doubleday). Between about 1915 and 1926, hundreds of Osage Indians in Oklahoma died under suspicious circumstances to gain their headrights (royalties from oil on their reservation). This is better than any detective-spy novel because it was true.
    I try to read one or two of the classics every year. From Mark Twain’s Life on the Mississippi. “When I was a little boy, Lem Hackett was drowned—on a Sunday. He fell out of an empty flatboat, where he was playing. Being loaded with sin, he went to the bottom like an anvil. He was the only boy in the village who slept that night. We others all lay awake, repenting”.   

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