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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

Escheat
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

Contracts
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

THE PHYSICIAN INVESTOR NEWSLETTER

HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.

Who Can You Trust? Part II of II

Issue #508, February 05, 2018

    This is to finish my review of Who Can You Trust? How Technology Brought Us Together and Why It Might Drive Us Apart (Botsman, Public Affairs).
    One of the problems with programming cars, and machines in general, involves the “trolley problem”. You are the controller of a runaway trolley hurtling towards 5 people on the track, who will certainly be killed. But you can flip a switch to divert the trolley down a different track where one person, currently out of harm’s way, will be killed. “Philosophers argue there is a moral distinction between actively killing one person or passively killing five. It’s a no-win situation with no right answer”.
    Most people surveyed wanted the autonomous vehicles to be programmed with this “utilitarian mindset”, sacrificing one life for many. But more than one-third of those thought cars should be programmed to protect their owners and passengers at all costs.
    RMD comment: This is a good example of philosopher’s (and behavioral economists, see Issue #412, 4/4/16 and 413, 4/11/16) over-think, spending time on situations for which there is no answer, situations you will never encounter. I suggest Captain Kirk’s solution to the unwinnable Kobayashi Maru scenario; reprogram the computer so you can win. I would program the car to do what you do in real life, as if you are driving with your wife and kids: protect the occupants.
    One of the ways distributed trust is generated in the digital age is through ratings: vendors and customers rate each other on Uber and Airbnb. Patient satisfaction scores are an important determinant of physician compensation, or even whether they keep their job (see below). Scoring systems have been developed in an attempt to “quantify” trust. About 70 years ago, Wm. Fair and Earl Isaac developed the first credit scoring system, now known as FICO (for Fair Isaac Corp.).
    What if everything you did, your entire existence, was rated by a “Citizen Score”? In 2014, the Chinese government passed a law to create a voluntary Social Credit System. In 2020, nation-wide participation become mandatory (nothing in a Communist country is “voluntary”). The final score will be based on not only your credit history, but also on your fulfillment capacity (honoring obligations), personal characteristics, behavior and preferences, and interpersonal relationships. What if your best friend’s score goes down? Your score goes down. 
    Here’s the issue: your Social Credit Score is known to everyone—and—it determines your status, how others perceive you, access to the best schools for your children, where you can live, chance to apply for a good job: reservations at a restaurant, even what airline flight you can take. China’s official policy says “If trust is broken in one place, restriction are imposed everywhere”.
    RMD comment: This is Orwell in real-life spades.
    One of the allures of the digital currencies, and anything else based on the blockchain concept, is that it represents a permanent, immutable publically distributed record.
    RMD comment: not so fast, partner. If people write the rules, they can change them. In 2016, a loophole was found in a “smart contract” using Ethereum as the digital currency. A hacker “rightfully claimed” their booty. The founders of Ethereum proposed a “hard fork”. If more than 51% of the people on the Ethereum network agreed, the rules could be changed. 87% voted yes, and the transaction was voided. So it’s not immutable.
    What is artificial intelligence? British code-breaker and mathematical genius Alan Turing said a computer could “think” when you couldn’t tell if you were talking to a person or a machine. John Good said that when a machine passes this test, it would inevitably become cleverer than us. “The first ultra-intelligent machine is the last invention that man ever need make” (RMD comment: see “Forbidden Planet”, based on Shakespeare’s “The Tempest”, “Colossus: The Forbin Project”, and “Terminator”).
    Here is the bottom line for placing more and more trust in machines: who programs the machines?
    This is admittedly a very superficial review. Many of the issues are far too nuanced to discuss in this space. I highly suggest you read the book for yourself. In the meantime, remember that any time you are on the Internet, the computers of Google and Face Book Amazon, the most powerful in the world, powered by the most sophisticated algorithms known to man, are storing and analyzing everything you do. They know you want a new pair of black shoes to go with your recently purchased Daniel Cremieux suit, that you are looking for a new job (before your boss, or your spouse, knows), and that last night on YouTube, for the 11th time in the last 2 years, you watched Bob Gibson strike out 17 Detroit Tigers in Game One of the 1968 World Series.
                                                                  RMD
     
    Almost all of the recent increase in narcotic-overdose deaths are prescription-related. So why are physicians writing so many narcotics prescriptions? I don’t believe I ever wrote a script for Oxycodone, or in 30 years wrote even 10 scripts for Tylenol #3 (Tylenol with 60 mg codeine).
    RMD comment: I believe it’s because of the recent importance placed on patient satisfaction scores. For you non-physician subscribers, these scores determine compensation, and, if they are low enough, and the physician is a hospital employee, whether they keep their job. It’s far easier for many docs to just write a script and make the patient, and your boss, happy, than tell them to suck it up, you’ll be OK, and lose your job. I assure you this happens.
 
    With my offers (see below), subscriptions will be up at least 50% this year. I encourage your questions, comments and feedback.
    This is from a retired physician in his mid-80s, old enough to remember the pain of the Great Depression, regarding yesterday’s Interim Bulletin on spending too much for Christmas decorations.
    “For most of my life, I wanted to have enough money to buy stuff. Then I learned I bought stuff to have pleasant experiences. Now I have so much stuff it has become a burden and takes away from the experiences I hoped to have in the first place. Now at Christmas I tell my family not to buy me any more stuff. Instead, I seek those wonderful experiences that cost no money and are free to everyone”. 
    A new subscriber and his wife are professionals in their mid-40s. They work hard, are careful with their money, and already have a net worth in the mid 7-figures (RMD comment: I’m impressed). Half of their net worth is in well-capitalized real estate, one-quarter is in retirement accounts, and one-quarter in non-retirement accounts. He is considering liquidating a good portion of his non-retirement account to pay off the mortgage. He wasn’t sure and asked my opinion.
    I suggested:
    1) one of the basic messages of my financial advice from the beginning has been to pay off the mortgage as early as you can. It’s hard to go wrong: you will always have a place to live. When the mortgage is paid off, or when your children finish their education: it’s like an armored car drives up to your door every month and drops off this big bag of money that’s now available for investment. 
    2) I also noted what he was doing was clearly working well for him.
    3) But what I believe is most important was that he wasn’t sure. You should never talk yourself into major decisions like this. You say yes, then no, then yes. It’s invariably the wrong decision. I believe he is best off sticking with his current plan, which is obviously working well for him.
    The newly-appointed Director of the CDC resigned over tobacco-related investments.
    RMD comment: I have no opinion on this case, but mention it as a chance to make an important point. I learned long ago (the easy way, someone told me) that “the appearance of a conflict of interests is a conflict of interests”. If you don’t want something to happen, don’t put yourself in the position where it could happen. 
    I remind you that:
    1) for $25 per person per year, a family member can “piggyback” on you subscription. Several people take advantage of this for 4 or 5 family members.
    2) For $50, you can give a gift subscription to a friend or colleague, your physician or your financial advisor, and I’ll extend your subscription for 1 year. 

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