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    Dr. Marcinko is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; as well as Oglethorpe University and Emory University in Georgia, the Atlanta Hospital & Medical Center; Kellogg-Keller Graduate School of Business and Management in Chicago, and the Aachen City University Hospital, Koln-Germany. He became one of the most innovative global thought leaders in medical business entrepreneurship today by leveraging and adding value with strategies to grow revenues and EBITDA while reducing non-essential expenditures and improving dated operational in-efficiencies.

    Professor David Marcinko was a board certified surgical fellow, hospital medical staff President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest drug, DME and pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published academic text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

    Dr. David E. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner® who was named “Health Economist of the Year” in 2010. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, economics trade journals and publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News] etc.

    Later, Dr. Marcinko was a vital recruited BOD member of several innovative companies like Physicians Nexus, First Global Financial Advisors and the Physician Services Group Inc; as well as mentor and coach for Deloitte-Touche and other start-up firms in Silicon Valley, CA.

    As a state licensed life, P&C and health insurance agent; and dual SEC registered investment advisor and representative, Marcinko was Founding Dean of the fiduciary and niche focused CERTIFIED MEDICAL PLANNER® chartered professional designation education program; as well as Chief Editor of the three print format HEALTH DICTIONARY SERIES® and online Wiki Project.

    Dr. David E. Marcinko’s professional memberships included: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA, FPA and HIMSS. He was a MSFT Beta tester, Google Scholar, “H” Index favorite and one of LinkedIn’s “Top Cited Voices”.

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Annual Causes of Death in the USA

On Physical versus Behavioral CoDs

[By staff reporters]

BEHAVIORAL EPIDEMIOLOGY?

[Number 1 – Compared to Numbers 2, 3, 4, 5 and 6]

What it is – How it works?

http://ezinearticles.com/?A-Clear-Definition-of-Evidence-Based-Behavioral-Epidemiology&id=6270461

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ANATOMICAL versus SELF-INFLICATION

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Mental Health DR. MARCINKO

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Geographic Variations in Opioid Prescription Rates

For 2017

By http://www.MCOL.com

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BUSINESS, ORGANIZATIONAL BEHAVIOR & FINANCE FOR DOCTORS:

THANK YOU

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Crafting a Medical Practice Strategic Marketing Plan

Necessary Today – Not So In the Past

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[By Dr. David Edward Marcinko; MBA, CMP™]

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Marketing plays a vital role in successful practice ventures. How well you market your practice, along with a few other considerations, will ultimately determine your degree of success or failure. 

The key element of a successful marketing plan is to know your patients – their likes, dislikes and expectations. By identifying these factors, you can develop a strategy that will allow you to arouse and fulfill their wants and needs. 

The Beginning

Identify your patients by their age, sex, income/educational level and residence. At first, target only those patients who are more likely to want or need your medical services. As your patient base expands, you may need to consider modifying the marketing plan to include other patient types or medical services. 

Your marketing plan should be included in your medical business plan and contain answers to the questions asked below:

·Who are your patients; define your target market(s)?

·Are your markets growing; steady; or declining?

·How is the practice unique?

· What is its market position?

·Where will we implement the marketing strategy?

· How much revenue, expense and profit will the practice achieve?

·Are your markets large enough to expand?

·How will you attract, hold, increase your market share?

·If a franchise, how is your market segmented?

·How will you promote your practice and services?

Practice Competition

Competition is a way of life. We compete for jobs, promotions, scholarships to institutions of higher learning, medical school, residency and fellowship programs, and in almost every aspect of our lives. 

When considering these and other factors, we can conclude that medical practice is a highly competitive, volatile arena. Because of this volatility and competitiveness, it is important to know your medical competitors. Questions like these can help you determine:

·Who are your five nearest direct physician competitors?

·Who are your indirect physician competitors?

·How are their practices: steady; increasing; or decreasing?

· What have you learned from their operations or advertising?

·What are their strengths and weaknesses?

·How do their services differ from yours?

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Chief-Marketing-Officer

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Patient Targeting

Patient targeting generally describes the strategic competitive advantage and/or professional synergy that is specific and unique to the practice. Intuitively, it answers such questions as:

·Who is the target market?

·How is the practice unique?

·What is its market position?

·Where will we implement the marketing strategy?

·  How much revenue, expense and profit will the practice achieve?  

The science of modern marketing however, is based on intense competition largely derived from the interplay of five forces, codified in the early 1980s, by Professor Michael F. Porter of Harvard Business School. They are placed in this section of the business plan and include the following:

Power of suppliers: The bargaining power of physicians has weakened markedly in the last managed care decade.  Reasons include demographics, technology, over/under supply and a lack of business acumen. 

Power of buyers: Corporate buyers of employee healthcare are demanding increased quality and decreased premium costs within the entire healthcare industry. The extents to which these conduits succeed in their bargaining efforts depend on several factors:

·Switching Costs: Notable emotional switching costs include the turmoil caused by uprooting a trusted medical provider relationship.

·Integration Level: The practitioner must decide early on whether or not he will horizontally integrate as a solo practitioner, or vertically integrate into a bigger medical healthcare complex.

·Product Importance: Increasingly, HMOs do not often strive to delight their clients and may be responsible for the beginning backlash these entities are starting to experience. Additionally, some medical specialties have more perceived value than others (i.e., neurosurgery v. dermatology)

· Concentration:  Insurance companies, not patients, represent buyers that can account for a large portion of practice revenue, thereby bringing about certain concessions.  A danger sign is noted when any particular entity encompasses more than 15-25% of a practice’s revenues.

Threat of new entrants: Some authorities argue that medical schools produce more graduates than needed, inducing a supply side shock. Others suggest that there too many patients? Regardless, this often can be mitigated by practicing in rural or remote locations, away from managed care entities, or in areas with under-served populations.

Current or existing competition: Heightened inter-professional competition has increased the intensity and volume of certain medical services and referrals may be correspondingly with-held.  Rivalry occurs because a competitor acts to improve his standing within the marketplace or to protect its position by reacting to moves made by other specialists.

Substitutions: Examples include: PAs for DOs, nurse practitioners for MDs, technicians for physical therapists, hygienists for dentists, cast technicians for orthopedists, nurse midwives for obstetricians, foot care extenders for podiatrists and even, hospital sanitation workers for medical and surgical care technicians.  Any strategy to ameliorate these conditions will augment the successful business practice plan. 

Enter the Chief Marketing Officer [CMO]

A Chief Marketing Officer or marketing director is a corporate executive responsible for marketing activities in an organization.  The CMO leads brand management, marketing communications, market research, product management, distribution channel management, pricing, often times sales, and customer service, etc.

***

DEM at Drexel

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Academic Metaphor?

Now, with all the competition today at the college and university level; notwithstanding the recent Hollywood Elite University acceptance debacle, can you see how these basic ideas might also be helpful in the academic and educational strategic marketing ecosystem?



The Emerging Role of University CHIEF STRATEGY OFFICER

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 The changing role of a college / university Chief Marketing Office [narrow focus] –versus–  Chief Strategy Officer [broader entity focus].

Assessment

A good way to accomplish and codify the above marketing plan concept is through a SWOT analysis. Mention the Strengths, Weaknesses, Opportunities and Threats of your specialty specific practice and what you plan do to maximize the positive, and minimize the negative aspects of the analysis.

Conclusion

Only after the above forces have been considered, should you begin the process that many physicians mistake for crafting their marketing efforts; executing the actual marketing plan. 

If you are not going to the right audience, making the correct statements or delivering your message through the proper advertising channels, you might as well put your medical practice marketing plan into the trash can because it will not secure you funds, or benefit your practice. 

Do you have a marketing plan, and more importantly, how well do you execute it? 

More info: http://www.springerpub.com/prod.aspx?prod_id=23759

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

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How to Prepare for a Recession in 2019

Is Canada an Impending Metaphor for the USA?

[By staff reporters]

In economics, a recession is a business cycle contraction which results in a general slowdown in economic activity. Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.

Definition: https://www.amazon.com/Dictionary-Health-Economics-Finance-Marcinko/dp/0826102549/ref=sr_1_6?ie=UTF8&s=books&qid=1254413315&sr=1-6

But, what about the USA?

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How to Prepare for a Recession in Canada – 2019

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Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

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The Emerging Role of University CHIEF STRATEGY OFFICER

Common in Industry – Still Not so Much in Academe’

By Dr. David Edward Marcinko MBA

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http://www.CertifiedMedicalPlanner.org

A Chief Strategy Officer [CSO], or chief strategist, is the senior  executive responsible for assisting the Chief Executive Officer [CEO] with developing, communicating, executing, and sustaining corporate strategic initiatives. Some companies give the title Chief Business Officer [CBO] to its’ senior executives who are holding the top strategy role.

My opinion in academia

A few decades ago, the role of university Chief Strategy Officer [CSO] did not exist or marginally existed as a mid-level project manager in the communications department. It may have consisted of a formal background in teaching and education exhibited by the BA and/or B.Ed degrees or HR certification.

A first generation didactic CSO 1.0; if you will.

Then, as academic competition and granularity increased along with new technology information exchange, the need for deeper subject matter expertise arose. Next – generation business, under/graduate LAs, HUMANITIES, modern culture, psychology / sociology and STEM expertise arose to create and explore new – real or perceived – strategic advantages for university public relations in the form of the M.Ed, MA or MBA degrees in marketing, advertising, sales or competitive analysis.

THINK: Michal Porter PhD, known for his theories on economics, business strategy, and social causes. He is the Bishop William Lawrence University Professor at Harvard Business School, and a social impact consultant. He is credited for creating Porter’s five forces analysis, which is instrumental in business strategy development today.

Also, consider traditional S.W.O.T analysis, as well. SWOT analysis (alternatively SWOT matrix) is an initialism for strengths, weaknesses, opportunities, and threats—and is a structured planning method that evaluates those four elements of a project or business venture. A SWOT analysis can be carried out for a product, place, industry, university or person.

So, let’s call this a second generation expert CSO 2.0

However, as the complex business of running any college or university is ever changing, the ideal profile of CSO is still morphing to face modern business and management challenges like: physical and cyber security; culture and organizational behavior; gender differences, racial disparities and workplace violence issues; enrollment and international expansion; corporatization and competition; online and e-learning initiatives; with accounting, financial and economic pressures, etc.

Consequently, BODs are now seeking and embracing a new kind of CSO with advanced PhD or DBA degrees; and college and university experience. In fact, the role of contemporary CSO is emerging and becoming closer to that of an experienced corporate Chief Executive Officer, than the mere educator, academician or manager of the past.

Definitions: https://www.amazon.com/Dictionary-Health-Economics-Finance-Marcinko/dp/0826102549/ref=sr_1_6?ie=UTF8&s=books&qid=1254413315&sr=1-6

Universities and colleges  today

Insightful academic search committees are now seeking a new type of modern CSO who can build university and college rankings, maintain relationships with stakeholders, and project a positive image as a “celebrity university”.

This means shepherding students and attracting qualified youth, and faculty, for matriculation as areas of particular importance. This new entrepreneurial CSO must focus on business management, economics and finance – operational, marketing, advertising and consultative sales strategies to attract a qualified, protean and diverse student / professional staff that sets it apart from the competition; as well as more meaningfully interacting within [research and development], and without the university [outreach].

Accordingly, this  modern CSO must be a combination and protean surrogate for the university  CEO / CFO / CMO / COO / CAO and leader – NOT just a teacher or manager – who will help run it like a matrix business unit that makes a profit to generate needed capital and ROI.

Multiple lines of business – tuition; certifications; worker-placement; grants and endowments; CEUs and non-degree program fees; as well as for-profit R&D, publications, patents, copyrights and trade-marks; and applied business incubators – must ALL be created and managed as a diversified portfolio. S/he must lead in the implementation, planning and operations of systemic community responsive programs, as well as policy interventions requiring advocacy, political action and public analysis.

I prefer the moniker – CSO 3.0

Assessment

This academic CSO 3.0 must be a change-agent, crisis manager, corporate strategist, Machiavellian devotee and/or seasoned C-suite executive with the required inter – disciplinary skills outlined for this important position.

Above all – the modern CSO 3.0 must be pro-active, flexible and market responsive. This is not the place for tenure tracking.

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MEDICAL PRACTICE AND HOSPITAL OPERATIONS, STRATEGIC DEVELOPMENT, ORGANIZATIONAL BEHAVIOR AND FINANCIAL MANAGEMENT COMPANION TEXTBOOK SET

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[Foreword Dr. Phillips MD JD MBA LLM] *** [Foreword Dr. Nash MD MBA FACP]  [Foreword Dr. Hashem MD PhD] *** [Foreword Dr. Silva MD MBA]

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements.

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On the Clinical Efficacy of the Apple Watch?

New Studies Seek to Define Clinical Efficacy

[By Catalyst @ Health 2.0]

Preliminary results from the Apple Heart Study show the potential health benefits of wearables. Researchers from the Stanford University School of Medicine partnered with Apple to conduct a virtual observational study with more than 400,000 participants. The study used the Apple Watch’s irregular rhythm notification (IRN) system to detect atrial fibrillation (AFib). The results showed 0.5% of participants received irregular rhythm notifications. For those who were notified, 21% received and wore an ECG patch. Of those, Afib was confirmed 34% of the time. The positive predictive value of the overall study was 71%, however, this increased to 84% for the subgroup who also used an ECG patch. It should be noted that the study has not yet been published in a peer-reviewed journal.

Johnson & Johnson’s HEARTLINE Study aims to build on the Apple Heart Study. Announced back in January, the virtual clinical trial will enroll 150,000 Americans 65 years and older to detect AFib and collect outcomes data. Participants will be randomized to either receive the Apple Watch 4 or no watch at all. Compared to the Apple Heart Study, one key technical design difference allows the HEARTLINE Study to draw a clearer connection between AFib observance and confirmation. Instead of waiting for an ECG patch to be mailed to the participant, the ECG app on the user’s Apple Watch 4 will be engaged once the “IRN software detects five out of six consecutive irregular rhythms each lasting one minute.” Both the IRN software and the ECG app are FDA cleared for AFib detection. Although the clinical efficacy of wearables is far from conclusive, the innovative use of virtual clinical trials will likely be commonplace in the future with the continued proliferation of consumer-driven health technologies.

Healthcare Executives Under Threat of Business Model Disruption

Healthcare executives are increasingly worried about business model disruption due to the influx of new entrants, processes, and technologies into the healthcare industry. According to Change Healthcare’s 9th Annual Industry Pulse Survey, 13.3% of 185 healthcare leaders believe that innovations in care delivery will lead to potential advancement within the industry and 11.1% believe that refinement of customer experience will create disruptive change. Other potential disruptors include supply chain innovations (9%), launch of vertical one-stop healthcare companies (8%), and advances in artificial capabilities (7%). However, the survey findings also suggest that healthcare leaders are increasingly embracing healthcare technologies. Thirty percent of leaders indicate that EHRs are their leading source of clinical data and another 30% of respondents say that analytics are “extremely effective” or “very effective” at increasing workflow productivity.

Health systems are also jumping into the digital age, with patients portals employed by 73% and telehealth solutions employed by 54% of all surveyed respondents. Twenty percent of respondents indicate they currently use machine learning and 51% plan to employ the technology in the future. Interestingly, the survey reveals a marked lack of attention toward cybersecurity. Even while 40% of healthcare leaders see cybercrime as a potential risk, 38% answered that there are “too many competing priorities” to warrant the level of attention that cybersecurity needs. Nevertheless, the threat of disruption has charged healthcare leaders to intensify its commitment to combating new market entrants.

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a1b52ded-7730-4995-b27a-8ac36e8bf1e4

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Assessment

Your thoughts are appreciated.

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About Securities Order and Position Types

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A Primer for Physician Investors and Medical Professionals

By: DR. David Edward Marcinko; MBA, CMP™

[Editor-in-Chief] http://www.CertifiedMedicalPlanner.org

[PART 6 OF 8]

BC Dr. Marcinko

NOTE: This is an eight part ME-P series based on a weekend lecture I gave more than a decade ago to an interested group of graduate, business and medical school students. The material is a bit dated and some facts and specifics may have changed since then. But, the overall thought-leadership information of the essay remains interesting and informative. We trust you will enjoy it.

Introduction

At this point  in our long ME-P essay, it is important to understand the different types of orders and positions that can be used to buy and sell securities from the specialist.

Market Order:

A market order is an order to be executed at the best possible price at the time the order reaches the floor. Market orders are the most common of all orders. The greatest advantage of the market order is speed. The doctor specifies no price in this type of order, he merely orders his broker to sell or buy at the best possible price, regardless of what it may be. The best possible price on a buy is the lowest possible price. The best possible price on a sell is the highest possible price. In other words, if a medical professional customer is buying, he logically wants to pay as little as possible, but he is not going to quibble over price. He wants the stock now, whatever it takes to get it. If he’s a seller, the doctor client wants to receive as much as possible, but will not quibble, he wants out, and will take what he can get, right now. No other type of order can be executed so rapidly.

Some market orders are executed in less than one minute from the time the broker phones in the order. Because the investor has specified no price, a market order will always be executed. The doctor is literally saying, “I will pay whatever it takes, or accept whatever is offered”.

Limit Order:

The chief characteristic of a limit order is that the doctor decides in advance on a price at which he decides to trade. He believes that his price is one that will be reached in the market in reasonable time. He is willing to wait to do business until he has obtained his price even at the risk his order may not be executed either in the near future or at all. In the execution of a limit order, the broker is to execute it at the limit price or better. Better, means that a limit order to buy is executed at the customer’s price limit or lower, in a limit order to sell, at price limit or higher. If the broker can obtain a more favorable price for his doctor customer than the one specified, he is required to do so.

Order Length:

Now, even though the doctor has given his price limit, we need to know the length of effectiveness of the order. Is the order good for today only? If so, it is a day order, it automatically expires at the end of the day.  Alternatively, the doctor may enter an open or, “good until canceled” order. This type of order is used when the doctor believes that the fluctuations in the market price of the stock in which he’s interested will be large enough in the future that they will cause the market price to either fall to, or rise to, his desired price, i.e. his limit price. He is reasonably sure of his judgment and is in no hurry to have/his order executed. He knows what he wants to pay or receive and is willing to wait for an indefinite period.

Years ago, such orders were carried for long periods of time without being reconfirmed. This was very unsatisfactory for all parties concerned.  A doctor would frequently forget his order existed and, if the price ever reached his limit and the order was executed, the resulting trade might not be one he wished to make. To avoid the problem, open (GTC) orders must be reconfirmed by the doctor customer each six months. Does that mean six months after the order is entered? …No! The exchange has appointed the last business day of April and the last business day of October as the two dates per year when all open orders must be reconfirmed.

Example: Dr. Smith wants to buy 100 shares of XYZ. The price has been fluctuating between 50 and 55. He places a limit order to buy at 51, although the current market price is 54. Limit orders to buy (buy limit orders) are always placed below the current market. To do otherwise makes no sense. It is possible that, within a reasonable time, the price will drop to 51 and his broker can purchase the stock for him at that price. If the broker can purchase the stock at less that 51, that would certainly be fine with the doctor customer since he wants to pay no more than 51. A sell limit order works in reverse and is always placed above the current market price.

Example: Dr. Smith wants to sell 100 shares of XYZ stock. The order is 54. A sell limit order is place at 56. Sell limit orders are always placed above the market price. As soon as the pride rises to 56, if it ever does, the broker will execute it at 56 or higher. In no case will it be executed at less than 56.

The advantage of the limit order is that the doctor has a chance to buy at less or to sell at more than the current market price prevailing when he placed the order. He assumes that the market price will become more favorable in the future than it is at the time the order is placed. The word” chance ” is important. There is also the “chance” that the order will not be executed at all. The doctor just mentioned, who wanted to buy at 51, may never get his order filled since the price may not fall that low.  If he wanted to sell at 56, the order may also not ever be executed since it might not rise that high during the time period the order is in effect.

Stop Orders:

A very important type of order is the stop order, frequently called a stop-loss order. There are two distinct types of stop orders. One is the stop order to sell, called a sell stop, and the other is a stop order to buy, called a buy stop. Either type might be thought of as a suspended market order; it goes into effect only if the stock reaches or passes through a certain price.

The fact that the market price reaches or goes through the specified stop price does not mean the broker will obtain execution at the exact stop price. It merely means that the order becomes a market order and will be executed at the best possible price thereafter. The price specified on a stop order bears a relationship to the current market price exactly opposite to that on a limit order. Whereas a sell limit is placed at a price above the current market, a sell stop is placed at a price below the current market. Similarly, while a buy limit is placed at a price below the current market, a buy stop is placed at a price above the current market. Why would a doctor investor use a stop order?

There are two established uses for stop orders. One of them might be called protective, the other might be called preventive.

Protective: This order protects a doctors’ existing profit on a stock currently owned.

For example, a doctor purchases a stock at 60. It rises to 70. He has made a paper profit of $10 per share. He realizes that the market may reverse itself. He therefore gives his broker a stop order to sell at 67. If the reversal does occur and the price drops to 67 or less, the order immediately becomes a market order. The stock is disposed of at the best possible price. This may be exactly 67, or it may be slightly above or below that figure. Why? …Because what happened at 67 was that his order became a market order; the price he actually received was dependent upon the next activity in the market. Let us suppose that the sale was made at 66 1/2. The doctor customer made a gross profit of 6 1/2 points per share on his original purchase. Without the stop order, the stock may have dropped considerably below that before the customer could have placed a market order and his profit might have been less or, in fact, he might have even sold at a loss.

Preventive:

A doctor purchases 100 shares of a stock at 30. He obviously anticipates that the price of the stock will rise in the near future (why else would he buy?). However, he realizes that his judgment may be faulty. He therefore, at the time of purchase, places a sell stop order at a price somewhat below his purchase price, for example, at 28. As yet, he has made neither profit nor loss; he’s merely acting to prevent a loss that might follow if he made the wrong bet and the stock does fall in price. If the stock does drop, the doctor knows that once it gets as low as 28, a market order will be turned in for him and, therefore, he will lose only 2 points or thereabout. It might have been much more had he not used the sell stop.

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Miscellaneous Orders and Positions

Beside market, limit  and stop orders, there are some other miscellaneous orders to know.

A stop limit order is a stop order that, once triggered or activated, becomes a limit order. Realize that it is possible for a stop limit to be triggered and not executed, as the limit price specified by the doctor may not be available.

In addition, there are all or none and fill or kill orders, and even though both require the entire order to be filled, there are distinct differences. An all or none (AON) is an order in which the broker is directed to fill the entire order or none of it. A fill or kill (FOK) is an order either to buy or to sell a security in which the broker is directed to attempt to fill the entire”‘ amount of the order immediately and in full, or that it be canceled.

The difference between an all or none and a fill or kill order is that with an all or none order, immediate execution is not required, while immediate execution is a critical component of the fill or kill. Be cause of the immediacy requirement, FOK orders are never found on the specialist’s book. Another difference is that AON orders are only permitted for bonds, not stocks, while FOK orders may be used for either.

Also, there exists an immediate or cancel order (IOC), which is an order to buy or sell a security in which the broker is directed to attempt to fill immediately as much of the order as possible and cancel any part remaining. This type of order differs from a fill or kill order which requires the entire order to be filled. An IOC order will permit a partial fill. Because of the immediacy requirement, IOC and FOK orders are never found on the specialist’s book.

Long and Short Positions

A long buy position means that shares are for sale from a market makers inventory, or owned by the medical investor, outright. Market makers take long positions when customers and other firms wish to sell, and they take short positions when customers and other firms want to buy in quantities larger than the market maker’s inventory. By always being ready, willing, and able to handle orders in this way, market makers assure the investing public of a ready market in the securities in which they are interested. When a security can be bought and sold at firm prices very quickly and easily, the security is said to have a high degree of liquidity, also known as marketability.

A short position investor seeks to make a profit by participating in the decline in the market price of a security.

Now, let’s see how these terms, long and short, apply to transactions by medical investors, rather than market makers, in the securities markets.

When a doctor buys any security, he is said to be taking a long position in that security. This means the investor is an owner of the security. Why does a doctor take a long position in a security? Beside, receiving dividend income, to make a profit from an increase in the market price. Once the security has risen sufficiently in price to satisfy the investor’s profit needs, the investor will liquidate his long position, or sell his stock. This would officially be known as a long sale of stock, though few people in the securities business use the label “long sale”. This is the manner in which the above investor had made a profit is the traditional method used; buy low, sell high.

Let’s look at an actual investment in General Motors to investigate this principle further. A medical investor has taken a long position in 100 shares of General Motors stock at a price of $70 per share. This means that the manner in which he can do that is by placing a market order which will be executed at the best “available market price at the time, or by the / placing of a buy limit order with a limit price of $70 per share. The investor firmly believes, on the basis of reports that he has read about the automobile industry and General Motors specifically, that at $70 a share, General Motors is a real bargain. He believes that based on its current level of performance, it should be selling for a price of between $80 and $85 per share. But, the doctor investor has a dilemma. He feels certain that the price is going to rise but he cannot watch his computer, or call his broker, every hour of every day. The reason he can’t watch is because patients have to be seen in the office. The only people who watch a computer screen all day are those in the offices of brokerage firms (stock broker registered representatives), and doctor day traders, among others.

In the above example, with a sell limit order, if the doctor investor was willing to settle for a profit of $12 per share, what order would he place at this time? If you said, “sell at $82 good ’til canceled”, you are correct. Why GTC rather than a day order? Because our doctor investor knows that General Motors is probably not going to rise from $70 to $82 in one day. If he had placed an order to sell at $82 without the GTC qualification, his order would have been canceled at the end of this trading day. He would have had to re-enter the order each morning until he got an execution at 82. Marking the order GTC (or open) relieves him of any need to replace the order every morning. Several weeks later, when General Motors has reached $82 per share in the market, his order to sell at 82 is executed. The medical investor has bought at 70 and sold at 82 and realized a $12 per share profit for his efforts.

Let’s suppose that the medical investor, who has just established a $12 per share profit, has evaluated the performance of General Motors common stock by looking at the market performance over a period of many years. Let’s further assume that the investor has found by evaluating the market price statistics of General Motors is that the pattern of movement of General Motors is cyclical. By cyclical, we mean that it moves up and down according to a regular pattern of behavior. Let’s say the investor has observed that in the past, General Motors had repeated a pattern of moving from prices in the $60 per share range as a low, to a high of approximately $90 per share. Further, our investor has observed that this pattern of performance takes approximately 10 to l2 months to do a full cycle; that is, it moves from about 60 to about 90 and back to about 60 within a period of roughly l2 months. If this pattern repeats itself continually, the investor would be well advised to buy the stock at prices in the low to mid 60’s hold onto it until it moves well into the 80’s, and then sell his long position at a profit. However, what this means is that our investor is going to be invested in General Motors only 6 months of each year. That is, he will invest when the price is low and, usually within half a year, it will reach its high before turning around and going back to its low again. How can the doctor investor make a profit not only on the rise in price of General Motors in the first 6 months of the cycle, but on the fall in price of General Motors in the second half of the cycle? One technique that is available is the use of the short sale.

The Short Sale

If a doctor investor feels that GM is at its peak of $ 90 per share, he may borrow 100 shares from his brokerage firm and sell the 100 shares of borrowed GM at $ 90. This is selling stock that is not owned and is known as a short sale. The transaction ends when the doctor returns the borrowed securities at a lower price and pockets the difference as a profit. In this case, the doctor investor has sold high, and bought low.

Odd Lots

Most of the thousands of buy and sell orders executed on a typical day on the NYSE are in 100 share or multi-100 share lots. These are called round lots. Some of the inactive stocks traded at post 30, the non-horseshoe shaped post in the northwest corner of the exchange, are traded in 70 share round lots due to their inactivity. So, while a round lot is normally 700 shares, there are cases where it could be 10 shares. Any trade for less than a round lot is known as an odd lot. The execution of odd lot orders is somewhat different than round lots and needs explanation.

When a stock broker receives an odd lot order from one of his doctor customers, the order is processed in the same manner as any other order. However, when it gets to the floor, the commission broker knows that this is an order that will not be part of the regular auction market. He takes the order to the specialist in that stock and leaves the order with the specialist. One of the clerks assisting the specialist records the order and waits for the next auction to occur in that particular stock. As soon as a round lot trade occurs in that particular stock as a result of an auction at the post, which may occur seconds later, minutes later, or maybe not until the next day, the clerk makes a record of the trade price.

Every odd lot order that has been received since the last round lot trade, whether an order to buy or sell, is then executed at the just noted round lot price, the price at which the next round lot traded after receipt of the customer’s odd lot order, plus or minus the specialist’s “cut “.  Just like everything else he does, the specialist doesn’t work for nothing. Generally, he will add 1/8 of a point to the price per share of every odd lot buy order and reduce the proceeds of each odd lot sale order by 1/8 per share. This is the compensation he earns for the effort of breaking round lots into odd lots. Remember, odd lots are never auctioned but, there can be no odd lot trade unless a round lot trades after receipt of the odd lot order.

Part 5 of 8: About Securities “Shelf Registration”

Conclusion

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