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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.

Medicine in 20 Years

Issue #447, December 05, 2016

    We’ve all heard “if present trends continue”. If you think about it, that will never happen, because it means the trend would go to infinity. The trick is to determine when trends will stop, or to identify new trends.
    Of course, no one can predict the future. Rather, I make these points for your interest. Likewise, Churchill said put what you believe will happen in writing, so it’s there if you are right (I don’t remember that he said anything about if you are wrong).
    1) Medicine will become increasingly female. If you look at the class pictures from the 1950s, about 5% were female. They were tokens. Medicine was denied access to half of the gene pool. When I graduated U. of Chicago in 1977, about 25% of the class was female. Now at least 50% of med school grads are female.
    I believe the biggest negative trend causing Medicine to lose its competitiveness for the smartest kids in the class is prolonged training periods. In the not-too-distant past, when one graduated Veterinary school you could go directly into practice. Now there is an additional 1-4 years of training post-graduation, identical to the Residency and Fellowship in Medicine. 85% of veterinary school grads are now female. When I asked the dean of a vet school why, he responded immediately “Males no longer apply. They prefer a career in Business or Engineering, where they finish training much sooner”.
    2) Medicine will become increasingly “Corporate”.
    A) I believe the second most important negative secular trend in Medicine is physicians becoming hospital employees. They may have an MD behind their name, but they are an employee, serving at the goodwill of the hospital CEO. They have little or no influence, and are a cost center to be controlled, no different than a housekeeper or how much it costs to pave the parking lot.
    B) Physicians used to have significant clout because they controlled patient flow. Now that is usually determined by the patient’s insurance. Physicians have little power. The professional organizations, such as the AMA, or the specialty Colleges, such as the American College of Cardiology, are powerless when compared to huge health care organizations, such as UNH or Anthem or Blue Cross, or the medical schools, which have the power of Universities behind them, or in their ability to lobby Congress.
    C) The physicians who are hospital employees will continue to have their salaries squeezed. When it comes down to the “Suit” running the hospital or the physician making more money, the Suit will win.
    3) The physicians who do best will be those why rely the least on the hospital, insurance, and the government. This will include Dermatologists, Plastic Surgeons, the various surgical subspecialties, such as Ophthalmology and ENT, and other specialties, such as Gastroenterology, who can perform their procedures outside the hospital. Any physician who can require cash for service, including psychiatrists, will do well. It stands that these specialties will attract the best physicians.
    4) The physicians who supply Primary Care will be increasingly squeezed by non-physicians, such as Nurse Practitioners and Physicians Assistants. The payers, ie, the government and insurance companies, will say that the NPs supply just as good a care. Of course they don’t, they have 5 years less training, but they will continue to get more support because their services are less expensive, making it increasingly difficult for the Primary Care docs to make a living, esp. a female who doesn’t practice full time.
    As a result, physicians will turn more and more into technicians: those who perform the procedures (see #3), leaving the primary care to Nurse Professionals.
    5) Except for a few of the best Internists, the Marcus Welby, MD types, who practice in affluent areas in a concierge-style practice. No insurance, no Medicare, just cash on the barrelhead.
    6) Private equity is getting more active in Medicine, especially with the subspecialists who perform procedures. I’m not sure how this will shake out. I need more insight, and will do a newsletter on this subject in the future. 
    At age 65, my #1 hope is that I’m here in 20 years to see if I’m right.   
    Next week I’m going to talk about the stock market rally, which I believe is for real. The market, and many individual stocks such as Deere (DE), have broken to new highs on good volume. That’s strong action.
    The US has the world’s largest economy, with about 20% of the world’s output. Yet the capitalization of the US stock market is 37% of the capitalization of the world’s stock markets. Why the difference?
    RMD comment:1) The P/E of the US market is about 17, higher than the historical average of 15, whereas many markets, especially emerging markets, are below their historical average. 2) Many companies, such as in China and other Communist/Socialist counties, are state-owned, and thus not traded on an exchange. 3) Large family/privately-owned companies are more common in Europe, esp. Germany, than compared to the US.
    This is from a new banker subscriber about last week’s newsletter.
    “I do not think the consumer is in reasonable shape. While monthly debt payments are down thanks to lower interest rates, the amount of debt outstanding is staggering. There has been deleveraging, but lack of knowledge and self-discipline have consumers in a pickle”.
    He provided a graph comparing US Household Debt vs. Income. 1960: 50%. 1970: about the same. 1980: 60%. 1990: about 75%. 2000: 90%. 2007: 120%+. 2016: 95%.
    RMD comment: I appreciate subscriber feedback. It gives me ideas, and I’m old enough to appreciate that I’m not always right. Remember: work hard, save your money, and stay out of debt. Those who lived through the Great Depression came out with an overt fear of debt. Unfortunately, the attitude toward debt has become much more casual.
    In fact, the delinquency rate on subprime auto loans is the highest since 2009. This is especially depressing since people now often take 60 or even 72 month notes. In my opinion, if you are a physician who has finished training, you should pay cash for a vehicle. If you can’t afford a new car, pay cash for a 3-5 year old car. Do not be seduced into leasing a car: it is a total waste of money.
    Last month two good friends were talking. #1 was appropriately apprehensive because he needed a surgical procedure. #2: “I’ve had that. It’s a piece of cake”. RMD interjects: “One of the first things we learned in medical school is never tell a patient this won’t hurt, because it always hurts”.
    I saw #1’s wife at the grocery store this week. He’s miserable.
    RMD comment: for the non-physician subscribers, if your physician says “This won’t hurt”. Vigyaz (Hungarian, “look out for danger”). For the young physicians: be sure to tell your patients this will hurt, because there’s no downside. If you are right, you are right. If you are wrong, and it’s not that bad, they’ll think you are a great doc. Just don’t overplay it. 
    I asked a newspaper editor what is the strategy behind more and more newspapers switching from afternoon to morning delivery. He said two reasons are 1) an ad that comes out at 6 AM has a longer life (the person has more time to act on it) than an ad that comes out at 4 PM. 2) Delivery is easier, the roads are less crowded, at 4 AM than 4 PM.     
    I’m getting tired of listening to apologists saying that Castro did good things for Cuba. He was a Communist thug who killed or jailed or drove into exile anyone who disagreed with him. He supported revolutionaries throughout the world, and destroyed the economy of his country. The average Cuban makes $20 per month, while Castro lived in luxury: (see The Double Life of Fidel Castro: My 17 Years as Personal Bodyguard to El Lider Maximo (Sanchez, St. Martin’s Press).  Churchill’s comment on when he first met Stalin at his villa describes this Communist paradox perfectly: “Everything was prepared in totalitarian lavishness” (from The Second World War: Vol 4: The Hinge of Fate). Nixon’s comment: “Castro couldn’t even go to the bathroom unless the Soviet Union put the nickel in the toilet”. 
    Again I ask a favor: If you have previously used PayPal to pay for this newsletter, please go to the website  and make sure you are not set up for automatic payments. I encourage you to use PayPal if you wish, but the automatic payments cause more problems than it is worth. 

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