BONDS: Tobacco

Posted on November 23, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Tobacco bonds are a form of municipal debt securities and securitized debt whose payment obligations are tied to a master medical lawsuit settlement agreement between 46 states and several major U.S. tobacco companies.

In exchange for the states settling their lawsuits against the tobacco industry for recovery of tobacco-related health care costs and exempting the tobacco companies from private tort liability regarding harm caused by tobacco use, the companies agreed to curtail or cease certain tobacco marketing practices and to pay, in perpetuity, various annual payments to the states to compensate for the medical costs of tobacco-related illnesses.

These tobacco industry payments have been securitized into municipal bonds. One underlying risk, among others, is that if certain conditions are met, the tobacco companies may reduce or suspend part of their payments.

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MEDICAL ECONOMICS: Healthcare Inflation

Posted on November 23, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Inflation has hit record levels this year as demand for goods and services far outpaced supply, and many companies are still trying to bounce back from the shutdowns of early 2020. Health systems, which have razor-thin operating margins even in the best of times, aren’t an exception.

“In the past, we’ve always said that healthcare was kind of recession-proof because demand for healthcare keeps going, regardless of what’s happening in the economy,” said Tina Wheeler, leader of consulting firm Deloitte’s US healthcare practice.

But in the last year, inflation hovered around 8% for much of the year, while medical-care prices increased by only 4.8%, according to Wheeler. Since medical costs are negotiated between hospitals and payers years in advance, hospitals can’t just raise their prices now to keep up with the pace of inflation, said Gerard Brogan Jr., senior vice president and chief revenue officer at Northwell Health.

READ: https://medicalexecutivepost.com/2022/11/10/the-cpi-and-stock-markets/

Here’s how badly hospitals could be hurting:

  • Inflation could cause an additional $370 billion more in healthcare spending than the expected baseline increase by 2027, according to McKinsey.
  • The national health expenditure could grow at a rate of 7.1% over the next five years, compared to the expected economic growth rate of 4.7%, according to McKinsey.
  • By the end of 2021, total hospital expenses per adjusted discharge were up 20.1% compared to 2019, according to the trade group American Hospital Association.

Rising interest rates also hurt hospitals since their main access to capital is through issuing tax-exempt bonds, Wheeler said. The rising cost of capital limits hospitals’ ability to fund projects, like opening a new oncology center to treat patients, for example. Keep reading here

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About iMBA Inc Expertise in Healthcare Valuation

Posted on November 23, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

iMBA Inc., and the ME-P Team

By Ann Miller RN MHA CMP™

SPONSOR: http://www.MarcinkoAssociates.com

The www.MedicalBusinessAdvisors.com is focused solely on appraising medical practices, surgery centers [ASCs], medicine, podiatry, optometry and allied healthcare businesses.

Working with our affiliated partners, like the ME-P and others, we are also available for behemoth multi-specialty medical practices, major clinics, hospitals, related healthcare organizations and networks, and PHOs, etc.

We are backed by the expertise of dedicated appraisers and valuation analysts who are trained by the foremost organizations in our industry www.CertifiedMedicalPlanner.org

Practice owners, attorneys and accountants retain us for projects including, but not limited to the following:.

There are a Myriad of Reasons for Obtaining a Medical Practice Valuation and Appraisal Engagement

  • Outright selling-buying
  • Partnership and Associate buy-in / buy-out
  • Mergers and Acquisitions
  • Organic growth tracking
  • Hospital integrations
  • Private and public reporting
  • Financing and Venture Capital
  • Estate and tax planning

Our Capability

We have the ability to provide extensive analysis of value components in healthcare practices and provide appraisals based on business, economic, and market conditions. This involves detailed examination of financials and clinical data in the context of numerous factors including medical specialty, physician supply and demand, payer mix, regulatory environment, regional dynamics, and risk premium.

Assessment

Our methods and approaches adhere to accepted standards of healthcare practice appraisal and utilize direct market data to reach justifiable conclusions.  These are documented in a comprehensive report which is tailored to meet the need of the specific engagement.

BLUNDERS TO AVOID: Medical Practice Valuation Blunders[1]

SAMPLE ENGAGEMENTS: See partial engagement list below.

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. Contact: MarcinkoAdvisors@msn.com

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MORTGAGE BACKED SECURITIES: Prepayment Risk

Posted on November 22, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

DEFINITION

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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Prepayment risk is typically used in reference to mortgage-backed securities. It refers to the risk that mortgage refinancing activity might increase when market interest rates decline, which is generally not favorable for MBS investors.

For example, when homeowners refinance their mortgages, MBS investors are “prepaid,” shortening the life of their investments and forcing investors to reinvest the proceeds under lower interest rate conditions than what were most likely prevailing at the time of the original MBS investment.

Price adjustments for prepayment risk are one factor that helps explain why MBS, despite their generally high credit quality, have higher yields than comparable-maturity Treasury securities.

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The TIPPING POINT: Meanings Vary

Posted on November 22, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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A “Tipping point” has slightly varied meanings depending upon the field of study, but is frequently defined as a series of small changes in an evolutionary process that ultimately lead to a significant change or point beyond which new circumstances and conditions obtain.

For example, the point at which emerging economies go from being a long-time source of deflation to a source of inflation can be said to be an inflationary tipping point.

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The Tipping Point: How Little Things Can Make a Big Difference is the debut book by Malcolm Gladwell, first published by Litttle, Brown in 2000. Gladwell defines a tipping point as “the moment of critical mass, the threshold, the boiling point.” The book seeks to explain and describe the “mysterious” sociological changes that mark everyday life. As Gladwell stated: “Ideas and products and messages and behaviors spread like viruses do.”

Examples of such changes in his book include the rise in popularity and sales of Hush Puppies shoes in the mid-1990s and the steep drop in New York City‘s crime rate after 1990.

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DAILY UPDATE: Google and Ford Motor as Stock Markets Rise and Broaden

Posted on November 22, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

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The DOJ asked a judge to force Google to sell its Chrome browser, following his ruling that Google maintained an illegal monopoly in search.
Ford said it is cutting 4,000 jobs in Europe, about 14% of its workforce on the continent, citing weak demand for EVs and competition from Chinese cars.

CITE: https://www.r2library.com/Resource

STOCKS UP

  • Data analytics firm Snowflake soared 32.71% after posting impressive earnings, including a 28% increase in revenue last quarter.
  • BJ’s Wholesale Club has had an okay year, but its latest earnings report gave shareholders plenty to cheer. The big news: BJ’s is increasing its membership fee for the first time in seven years. Shares rose 8.24%.
  • Despite the fact that the world’s largest farming equipment manufacturer sees a big slowdown ahead, Deere beat earnings estimates last quarter, which was enough to help shares climb 8.12%.

STOCKS DOWN

It took a second, but it’s finally registering that Alphabet may be forced by the Department of Justice to divest its popular Chrome browser. Shares fell 4.74% as investors digest this stark reality.

  • Speaking of search engines, Baidu sank 5.90% after the Chinese tech stock missed analyst estimates on both earnings and revenue last quarter.
  • Speaking of Chinese companies, PDD Holdings, parent company of online retailer Temu, reported higher earnings and revenue last quarter—but it still fell short of analyst forecasts. Shares dropped 10.64%.
  • Speaking of struggling retailers, Beyond Inc., the company that owns Bed, Bath & Beyond and Overstock.com, was supposed to invest $40 million into struggling retailer The Container Store. Unfortunately for both, the deal fell through. Shares of Beyond sank 2.87%, while The Container Store dropped 9.79%.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The SPX buoyed 31.60 points (0.53%) to 5,948.71; the Dow Jones Industrial Average® ($DJI) rose 461.88 points (1.06%) to 43,870.35; and the NASDAQ Composite® ($COMP) stayed relatively flat, up 6.28 points (0.03%) to 18,972.42.
  • The 10-year Treasury note yield added two basis points to 4.42%, staying rangebound.
  • The CBOE Volatility Index® (VIX) slipped to 16.87, still above last week’s levels.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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INVESTMENT: Management Strategies

Posted on November 21, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Active investment management strategies are the opposite of passive investment strategies. Active portfolio managers regularly take investment positions that clearly differ from those of the portfolio’s performance benchmark, with the objective of outperforming the benchmark over time.

Passive: https://medicalexecutivepost.com/2024/06/09/active-or-passive-investing-pursuits/

In addition to the upside potential of outperforming the benchmark, there’s also the downside possibility of under performing the benchmark. In an efficient market, there should be roughly the same magnitude of out performers and under performers for any given benchmark. But, markets are not always efficient.

Active non-transparent investment management strategies are Exchange Traded Funds that are actively managed by a portfolio manager or team of managers without daily disclosure of portfolio holdings. Active transparent strategies are daily disclosures of portfolio holdings as an attribute of traditional index-based Exchange Traded Funds (ETFs). Active transparent exchange traded funds are actively managed by a portfolio manager or team of managers. As with index-based ETFs, their portfolio holdings are disclosed daily.

Di-Worsification: https://medicalexecutivepost.com/2024/04/09/what-is-financial-portfolio-di-worsification-2/

NOTE: Absolute return as an investment vehicle seeks to make positive returns by employing investment management techniques that differ from traditional mutual funds. Absolute return investment techniques include using short selling, futures, options, derivatives, arbitrage, leverage and unconventional assets.

CITE: https://www.r2library.com/Resource/Title/0826102549

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GROSSMAN-STIGLITZ: Financial Information Paradox

Posted on November 21, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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The Grossman-Stiglitz Paradox was introduced by Sanford J. Grossman and Joseph Stiglitz in a joint publication in American Economic Review in 1980 that argues perfectly informationally efficient markets are an impossibility since, if prices perfectly reflected available information, there is no profit to gathering information, in which case there would be little reason to trade and markets would eventually collapse.

IOW: According to colleague Eugene Schmuckler PhD MBA CTS, the Grossman-Stiglitz paradox is the inability to recoup the cost of obtaining market information and thus implies that efficient markets cannot exist.

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DAILY UPDATE: GoodRx as Stocks End Flat

Posted on November 21, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

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It’s not all good news for GoodRx.

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STOCKS UP

Williams-Sonoma soared 27.50% to a record high after the home goods store beat top and bottom line earnings expectations. Its operating profit margin jumped to 17.8% from 17% last year, and the company said its board greenlit a $1 billion stock buyback plan.

  • Wix jumped 14.31% on a solid beat for its third quarter. Profit for the software firm reached $0.46 per share, compared to the $0.12 per share it reported last year.
  • Lemonade rose 16.04% after Morgan Stanley upgraded the insurance company from “underweight” to “equal-weight.” At its investor day, Lemonade unveiled a plan to juice its premiums from $1 billion to $10 billion over the next several years.

STOCKS DOWN

  • Ford said it was cutting 4,000 jobs in Europe, about 14% of its workforce on the continent, citing weak demand for EVs and competition from Chinese cars. Shares fell 2.90%.
  • Qualcomm dropped 6.34% after its first Investor Day in three years disappointed. On Tuesday, the chipmaker revealed its big plans to expand from its bread-and-butter smartphone business into making chips for cars and PCs.
  • Elf sank 2.23% after short seller Carson Block, the founder of Muddy Waters Research, accused the beauty company of inflating revenue.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  •  The S&P 500® index (SPX) stayed mostly flat, up 0.13 points (0.0%) to 5,917.11; the Dow Jones Industrial Average® ($DJI) rose 139.53 points (0.32%) to 43,408.47; and the NASDAQ Composite® ($COMP) fell 21.32 points (0.11%) to 18,966.14. 
  • The 10-year Treasury note yield added four basis points to 4.41%.
  • The CBOE Volatility Index® (VIX) climbed to 17.26, near recent highs.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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Stocks, Treasuries, Gold and Bitcoin

Posted on November 20, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
SPONSOR: http://www.MarcinkoAssociates.com

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  • Stocks sank yesterday on news that Russian President Vladimir Putin lowered the threshold for using nuclear weapons, retaliation against the US for allowing Ukraine to use American-made long-range missiles. The NASDAQ and S&P 500 managed to recover, but the DJIA stayed all day in the red.
  • Treasury yields dropped as bonds rose.
  • Gold popped as traders sought safety, as the commodity benefited from the US dollar pulling back from a recent one-year high.
  • Bitcoin continued to climb slowly but surely, reaching another new all-time high.

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CHARGE MASTER: Medical Bills Paradox

Posted on November 20, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.CertifiedMedicalPlanner.org

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CHARGE MASTER MEDICAL BILLS

Classic Definition: A comprehensive review of a physician, clinic, facility, medical provider or hospital’s charges to ensure Medicare billing compliance through complete and accurate HCPCS/CPT and UB-92 revenue code assignments for all items including supplies and pharmaceuticals. The charge master captures the costs of each procedure, service, supply, prescription drug, and diagnostic test provided at the hospital, as well as any fees associated with services, such as equipment fees and room charges

Modern Circumstance: A charge master quizlet (charge description master [CDM]) document that contains a computer-generated list of procedures, services, and supplies with charges for each. Charge master rates are essentially the health care market equivalent of Manufacturer’s Suggested Retail Price (MSRP) in the car buying market. Poor charge master maintenance can lead to overpayments or underpayments. It can also lead to claim rejections from insurance companies, poor patient experience, or compliance violations.

Paradox Examples:

  • Superbills: An encounter form that is the financial record source document used by healthcare providers and other personnel to record treated diagnoses and services rendered to the patient during the current encounter. It is also called a superbill.
  • Payment rates: Almost no one actually pays the publicized charge master rates. The vast majority of health care consumers are represented by a payer of some kind, such as a commercial health insurance company, Medicaid, or Medicare. Commercial insurers negotiate the actual prices they pay during the process of contracting with providers. Medicare and Medicaid establish their own payment levels independent of hospitals’ charge master lists – Medicare through the federal government and Medicaid through state governments.
  • Cash pay: The sad irony of the charge master is that the uninsured are the most likely to be billed charge master rates because they are not represented by a third-party payer.
  • Problematic features: Other items also impede the ability of payers to have a comprehensive and accurate understanding of hospitals’ financial positions. For example, nonprofit hospitals are required to report charity care, bad debt expenses, community benefit initiatives, and uncompensated care. When these expenses are reported at the charge master level, expenses can be paradoxically overstated, potentially making a hospital’s financial position look worse than it actually is.

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CBOE: Chicago Board Options Exchange [Volatility Indexes]

Posted on November 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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RELATED DEFINITIONS

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Volatility indexes are forward-looking measures of the market’s expectations of volatility (or how much a stock index’s price moves). The CBOE manages and publishes three of the most widely used volatility indexes based on three major stock indexes:

The VIX Index tracks the expected 30-day future volatility of the S&P 500 Index.

The VXN Index tracks the expected 30-day future volatility of the NASDAQ-100 Index.

The VXD Index tracks the expected 30-day future volatility of the Dow Jones Industrial Average Index.

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SECURITY ORDERS: Stop-Loss and Stop-Limit

Posted on November 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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A Stop order, also known as a “stop-loss order,” a stop order is an order placed with a bank or brokerage firm to either buy or sell a security after it reaches a specified price. Once the price is reached, the stop order becomes a market order, meaning there is no guarantee that an order will be completely filled at the specified stop price.

MORE: https://medicalexecutivepost.com/2024/08/30/stock-orders-positions-doctors-should-know/

A Stop-limit order is order placed with a bank or brokerage firm to buy or sell a fixed amount of an investment after it reaches a specified or better price, combining the features of a stop order and a limit order.

MORE: https://medicalexecutivepost.com/2024/08/07/about-securities-order-and-position-types/

A stop-limit order requires investors to set two price points: the first initiates the stop (the order to buy or sell) and the second sets the limit, or price beyond which the investor would not like to buy or sell. The investor also sets a time frame for which the order is valid before being cancelled. If the investor’s price cannot be met during the specified time frame, the order will be cancelled.

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DAILY UPDATE: All About the Stock Markets

Posted on November 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

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SPONSORED BY: Marcinko & Associates, Inc.

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  • Stocks ended the day mixed, with the Dow sinking into the red while the S&P 500 and NASDAQ kicked off the week on a positive note thanks to gains from tech stocks.
  • Oil popped on a double-whammy of news: Long-range, US-made ballistic missiles launched from Ukraine into Russia might disrupt oil supply, while the shutdown of Norway’s Johan Sverdrup oil field due to a power outage will definitely disrupt oil supply.
  • Crypto continued its hot streak today: Bitcoin popped back above $90,000, giving other cryptocurrencies a boost.
  • Bitcoin’s boom has certainly helped MicroStrategy, which announced today that it purchased 51,780 bitcoins for approximately $4.6 billion in cash, or roughly $88,627 per bitcoin, in the last week alone.

CITE: https://www.r2library.com/Resource

STOCKS UP

The new Trump Trade continues: The president-elect’s selection of Liberty Energy CEO Chris Wright to lead the Department of Energy gave Liberty a 4.85% boost today. Wright is also on the board of nuclear company Oklo, which popped 14.83%.

  • Speaking of Trump, Trump Media & Technology Group soared 16.65% on the news that it may purchase crypto trading firm Bakkt.
  • Netflix disappointed viewers with its glitchy showing of Jake Paul vs. Mike Tyson, but shareholders forgave the company after it announced record viewership of the fight. Shares climbed 2.80%.
  • CVS Health gained 5.41% on news that it struck a deal with activist investor Glenview Capital Management to add four new seats to its board.
  • Robinhood jumped 8.29% to a new all-time high thanks to an upgrade from Needham analysts giving the investing app a “buy” rating due to its crypto offerings under a pro-crypto Trump presidency.
  • Warner Bros. Discovery rose 2.71% on a Wall Street Journal report that it has settled its legal dispute with the NBA, guaranteeing broadcast rights for the next decade.

STOCKS DOWN

  • Nvidia isn’t often in this section of the newsletter, but the semiconductor leader sank 1.29% today on a report from The Information that its new Blackwell chips are prone to overheating.
  • Palantir popped after moving over to the Nasdaq last week, but the red-hot software stock dropped 6.86% as investors collected profits.
  • Redfin may help you buy a house, but the online real estate brokerage is a “sell,” according to Goldman Sachs. The Wall Street firm cited low home sales, low affordability, and low chances of success in a competitive market. Shares fell 4.42%.
  • Uber dropped 5.35% to a new 52-week low on the threat of Tesla’s robotaxis ruling the road thanks to a Trump administration that seems keen on cutting self-driving regulations.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  •  The SPX was up 23.00 points (0.4%) to 5893.62; the Dow Jones Industrial Average® ($DJI) fell 55.39 points (0.1%) to 43,389.6; and the NASDAQ Composite® ($COMP) was up 111.69 points (0.6%) to 18,791.81.
  • The 10-year Treasury note yield fell one basis point to 4.41%.
  • The CBOE Volatility Index® (VIX) eased to 15.57.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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STOCK POSITION SIZING: How to Construct Investment Portfolios That Protect You

Posted on November 18, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Vitaliy Katsenelson CFA
For a while in the value investing community the number of positions you held was akin to bragging on your manhood– the fewer positions you owned the more macho an investor you were. 

I remember meeting two investors at a value conference. At the time they had both had “walk on water” streaks of returns. One had a seven-stock portfolio, the other held three stocks. Sadly, the financial crisis humbled both – the three-stock guy suffered irreparable losses and went out of business (losing most of his clients’ money). The other, after living through a few incredibly difficult years and an investor exodus, is running a more diversified portfolio today.

Under-diversification is dangerous, because a few mistakes or a visit from Bad Luck may prove to be fatal to the portfolio.

On the other extreme, you have a mutual fund industry where it is common to see portfolios with hundreds of stocks (I am generalizing). There are many reasons for that. Mutual funds have an army of analysts who need to be kept busy; their voices need to be heard; and thus their stock picks need to find their way into the portfolio (there are a lot of internal politics in this portfolio). 

These portfolios are run against benchmarks; thus their construction starts to resemble Noah’s Ark, bringing on board a few animals (stocks) from each industry. Also, the size of the fund may limit its ability to buy large positions in small companies.

There are several problems with this approach. First, and this is the important one, it breeds indifference: If a 0.5% position doubles or gets halved, it will have little impact on the portfolio. The second problem is that it is difficult to maintain research on all these positions. Yes, a mutual fund will have an army of analysts following each industry, but the portfolio manager is the one making the final buy and sell decisions. Third, the 75th idea is probably not as good as the 30th, especially in an overvalued market where good ideas are scarce.

Then you have index funds. On the surface they are over-diversified, but they don’t suffer from the over-diversification headaches of managed funds. In fact, index funds are both over-diversified and under-diversified. Let’s take the S&P 500 – the most popular of the bunch. It owns the 500 largest companies in the US. You’d think it was a diversified portfolio, right? Well, kind of. The top eight companies account for more than 25% of the index. Also, the construction of the index favors stocks that are usually more expensive or that have recently appreciated (it is market-cap-weighted); thus you are “diversified” across a lot of overvalued stocks.

If you own hundreds of securities that are exposed to the same idiosyncratic risk, then are you really diversified?

Our portfolio construction process is built from a first-principles perspective. If a Martian visited Earth and decided to try his hand at value investing, knowing nothing about common (usually academic) conventions, how would he construct a portfolio?

We want to have a portfolio where we own not too many stocks, so that every decision we make matters – we have both skin and soul in the game in each decision. But we don’t want to own so few that a small number of stocks slipping on a banana will send us into financial ruin.

In our portfolio construction, we are trying to maximize both our IQ and our EQ (emotional quotient). Too few stocks will decapitate our EQ – we won’t be able to sleep well at night, as the relatively large impact of a low-probability risk could have a devastating impact on the portfolio. I wrote about the importance of good sleep before (link here). It’s something we take seriously at IMA.

Holding too many stocks will result in both a low EQ and low IQ. It is very difficult to follow and understand the drivers of the business of hundreds of stocks, therefore a low IQ about individual positions will eventually lead to lower portfolio EQ. When things turn bad, a constant in investing, you won’t intimately know your portfolio – you’ll be surrounded by a lot of (tiny-position) strangers.

Portfolio construction is a very intimate process. It is unique to one’s EQ and IQ. Our typical portfolios have 20–30 stocks. Our “focused” portfolios have 12–15 stocks (they are designed for clients where we represent only a small part of their total wealth). There is nothing magical about these numbers – they are just the Goldilocks levels for us, for our team and our clients. They allow room for bad luck, but at the same time every decision we make matters.

Now let’s discuss position sizing. We determine position sizing through a well-defined quantitative process. The goals of this process are to achieve the following: Shift the portfolio towards higher-quality companies with higher returns. Take emotion out of the portfolio construction process. And finally, insure healthy diversification.

Our research process is very qualitative: We read annual reports, talk to competitors and ex-employees, build financial models, and debate stocks among ourselves and our research network. In our valuation analysis we try to kill the business – come up with worst-case fair value (where a company slips on multiple bananas) and reasonable fair value. 

We also assign a quality rating to each company in the portfolio. Quality is absolute for us – we don’t allow low-quality companies in, no matter how attractive the valuation is (though that doesn’t mean we don’t occasionally misjudge a company’s quality).

The same company, at different stock prices, will merit a higher or lower position size. In other words, if company A is worth (fair value) $100, at $60 it will be a 3% position and at $40 it will be a 5% position. Company B, of a lower quality than A but also worth $100, will be a 2% position at $60 and a 4% position at $40 (I just made up these numbers for illustration purposes). 

In other words, if there are two companies that have similar expected returns, but one is of higher quality than the other, our system will automatically allocate a larger percentage of the portfolio to the higher-quality company. If you repeat this exercise on a large number of stocks, you cannot but help to shift your portfolio to higher-quality, higher-return stocks. It’s a system of meritocracy where we marry quality and return.

Let’s talk about diversification. We don’t go out of our way to diversify the portfolio. At least, not in a traditional sense. We are not going to allocate 7% to mining stocks because that is the allocation in the index or they are negatively correlated to soft drink companies. (We don’t own either and are not sure if the above statement is even true, but you get the point.) 

We try to assemble a portfolio of high-quality companies that are attractively priced, whose businesses march to different drummers and are not impacted by the same risks. Just as bank robbers rob banks because that is where the money is, value investors gravitate towards sectors where the value is. To keep our excitement (our emotions) in check, and to make sure we are not overexposed to a single industry, we set hard limits of industry exposure. These limits range from 10%–20%. We also set limits of country exposure, ranging from 7%–30% (ex-US).

In portfolio construction, our goal is not to limit the volatility of the portfolio but to reduce true risk – the permanent loss of capital. We are constantly thinking about the types of risks we are taking. Do we have too much exposure to a weaker or stronger dollar? To higher or lower interest rates? Do we have too much exposure to federal government spending? I know, risk is a four-letter word that has lost its meaning. But not to us. Low interest rates may have time-shifted risk into the future, but they haven’t cured it.

READ: Position Sizing: How to Construct Portfolios That Protect You

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BOOLEAN: Logic & Search Engine

Posted on November 17, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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George Boole, an English mathematician from the 19th century, developed an algebraic method that he first described in his 1847 book, The Mathematical Analysis of Logic and expounded upon in his An Investigation of the Laws of Thought (1854).

Boolean algebra is fundamental to modern computing, and all major programming languages include it. It also figures heavily in statistical methods and set theory.

Today’s database searches are largely based on Boolean logic, which allows us to specify parameters in detail — for example, combining terms to include while excluding others. A Boolean search, in the context of a search engine, is a type of search where you can use special words or symbols to limit, widen, or define your search.

This is possible through Boolean operators such as AND, OR, and NOT, plus symbols like + (add) and – (subtract).

When you include an operator in a Boolean search, you’re either introducing flexibility to get a wider range of results, or you’re defining limitations to reduce the number of unrelated results.

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DEDICATED: Short Stock Bias Strategies

Posted on November 17, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Dedicated short bias strategies short stocks expected to depreciate as a result of company-specific catalysts or falling markets. These strategies maintain a net short exposure to the equity market, seeking to reduce equity portfolio volatility and offer the potential to earn returns in falling equity markets. Of course, they may be challenged in periods of rising equity markets.

From Shorting to a Short Bias

Prior to the long-term bull market for U.S. equities that took place in the 1980s and 1990s, many hedge funds used a dedicated short strategy, rather than a dedicated short bias strategy.

The dedicated short strategy was one that exclusively took short positions. The dedicated short funds were virtually destroyed during the bull market, so the dedicated short bias fund emerged and took a more balanced approach. The long holdings are enough to keep losses manageable, although funds can still run into problems with leverage and capital flight if losses continue for too long.

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VARIETY: Insensitivity

Posted on November 16, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Variety Insensitivity is the tendency to under appreciate the value of variety in choices.

According to Dan Ariely PhD, it’s like always ordering the same dish at your favorite restaurant and forgetting how exciting new flavors can be. Our brains love routine, but this can lead to boredom and missed opportunities. Embracing variety can enhance experiences and satisfaction.

So, next time you’re stuck in a rut, shake things up and try something different. Your brain will thank you for the new stimulation.

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BIAS: Of “Social Proof” and Influencers

Posted on November 15, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

INVESTING DEFINITION

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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Social Proof is a subtle but powerful reality that having others agree with a decision one makes, gives that person more conviction in the decision, and having others disagree decreases one’s confidence in that decision. 

This bias is even more exaggerated when the other parties providing the validating/questioning opinions are perceived to be experts in a relevant field, or are authority figures, like doctors, attorneys, financial advisors, teachers and/or people on television.  In many ways, the short term moves in the stock market are the ultimate expression of social proof – the price of a stock one owns going up is proof that a lot of other people agree with the decision to buy, and a dropping stock price means a stock should be sold. 

According to colleague Dan Ariely PhD, when these stressors become extreme, it is of paramount importance that all participants in the financial planning and investing process have a clear understanding of what the long-term goals are, and what processes are in place to monitor the progress towards these goals. 

Without these mechanisms it is very hard to resist the enormous pressure to follow the crowd; think social media and related influences.

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Convertible Securities, Bonds and Corporate Securities

Posted on November 15, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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Convertible securities are those that can be converted at the investor’s choice into other investments, normally into shares of the issuer’s underlying common stock. Convertibles are typically issued as bonds or preferred stock.

Convertible bonds, which provide an ongoing stream of income, can be converted into a preset number of shares of the company’s common stock and have a maturity date. Unlike common stock, which pays a variable dividend depending on a corporation’s earnings, convertible preferred stock pays a fixed quarterly dividend. It can be converted into common stock at any time, but often are perpetual.

Corporate securities (corporate bonds and notes) are debt instruments issued by corporations, as distinct from those issued by governments, government agencies, or municipalities.

Corporate securities typically have the following features: 1) they are taxable, 2) they tend to have more credit (default) risk than government or municipal securities, so they tend to have higher yields than comparable-maturity securities in those sectors; and 3) they are traded on major exchanges, with prices published in newspapers.

CITE: https://www.r2library.com/Resource/Title/0826102549

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DAILY UPDATE: Healthcare Private Equity Prominent as Stocks Go Down

Posted on November 15, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

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Private equity (PE) dollars have become prominent in the US healthcare industry in recent decades, with PE firms now owning roughly 8% of all private hospitals in the country, according to nonprofit Private Equity Stakeholder Project. But studies have illustrated the financial model’s potential adverse effects, such one published in JAMA in December 2023 that found PE-owned hospitals are 25.4% more likely to report patient complications. Others have found that PE-owned healthcare companies represented more than one-fifth of healthcare company bankruptcies in 2023 and that PE-owned hospitals see their assets drop an average of 24% following an acquisition.

CITE: https://www.r2library.com/Resource

STOCKS UP

Tapestry, parent company of luxury brands like Coach and Kate Spade, and Capri, parent company of luxury brands like Versace and Jimmy Choo, have announced they will mutually terminate their planned merger. Tapestry popped 12.80%, while Capri rose 4.43%.

  • Speaking of luxury brands, Burberry soared 18.04% after its CEO announced a turnaround plan designed to halt the company’s recent decline.
  • Semiconductor maker ASML plummeted last month on a profit warning, but rose 2.90% today on reassurances that it’s still on track to meet its 2030 revenue forecasts.

STOCKS DOWN

  • Super Micro Computer fell yet another 11.41% as it nears the November 16 deadline to report fiscal year earnings or be delisted from the Nasdaq.
  • Trump Media & Technology Group dropped 6.71% as investors digested news that company insiders are shedding shares, as well as in reaction to a number of President-elect Trump’s cabinet appointments.
  • Hims & Hers Health tumbled 24.46% on the news that Amazon is getting into the telehealth game, offering Prime members fixed prices on treatments for hair loss and erectile dysfunction.
  • Ibotta is a cashback rewards company, but its shareholders may want their cash back. The company beat on top and bottom line estimates last quarter, but the win wasn’t good enough, and shares sank 12.55%.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) fell 36.21 points (–0.60%) to 5,949.17; the Dow Jones Industrial Average® ($DJI) lost 207.33 points (–0.47%) to 43,750.86; and the NASDAQ Composite® ($COMP) dropped 123.07 points (–0.64%) to 19,107.65. 
  • The 10-year Treasury note yield fell three basis points to 4.42%.
  • The CBOE Volatility Index® (VIX) edged up to 14.17.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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PARADOX: Generosity V. Miserliness

Posted on November 14, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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According to BC Smith and Hilary Davidson, generosity is paradoxical. Those who give, receive back in turn. By spending ourselves for others’ well-being, we enhance our own standing. In letting go of some of what we own, we better secure our own lives. By giving ourselves away, we ourselves move toward flourishing. This is not only a philosophical or religious teaching; it is a sociological fact.

The the generosity paradox can also be stated in the negative.

By grasping on to what we currently have, we lose out on better goods that we might have gained. In holding onto what we possess, we diminish its long-term value to us. And, by always protecting ourselves against future uncertainties and misfortunes, we are affected in ways that make us more anxious about uncertainties and vulnerable to future misfortunes.

In short, by failing to care for others, we do not properly take care of ourselves. It is no coincidence that the word “miser” is etymologically related to the word “miserable.”

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INVESTMENT STRATEGIES: Market Neutral and Extended Equity

Posted on November 14, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

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Equity market neutral strategies seek to eliminate the risks of the equity market by holding up to 100% of net assets in long equity positions and up to 100% of net assets in short equity positions. These strategies attempt to exploit differences in stock prices by being long and short in stocks within the same sector, industry, market capitalization, etc. If successful, these strategies should generate returns independent of the equity market.

Equity market neutral portfolios have two key sources of return: 1) the Treasury Bill return (the interest on proceeds from short sales held in cash as collateral), and 2) the difference (the “spread”) between the return on the long positions and the return on the short positions. Stock picking, rather than broad market moves, should drive most of a market-neutral strategy’s total return (save for any return from the 100% cash position).

CITE: https://www.r2library.com/Resource

Extended Equity Strategies attempt to provide better returns than possible with long-only investments

An example of an extended equity strategy is a 130/30 portfolio, which gets its designation from taking a 130% long position and a 30% short position. In practice, this would mean $100mm invested in stocks that are viewed as attractive.

Next, the manager would borrow and sell short $30mm of unattractive stocks. Then the manager uses the proceeds from the short sale to buy an additional $30mm of attractive stocks. This results in a portfolio that has 130% long and 30% short exposure to stocks, or “extended” exposure to equities relative to a long-only, 100% stock portfolio.

Note: It’s important to point out that here is the risk of theoretical unlimited amount of loss with short selling, (i.e. the price of the short-sold stocks increases; the long position can only go down to $0).

CITE: https://www.r2library.com/Resource

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DAILY UPDATE: United Health, Cigna and Inflation as Stock Markets Flatten

Posted on November 14, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

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UnitedHealth Group posted nearly $6.1 billion in profit last quarter, edging out Elevance Health with $5.6 billion. Paige Minemyer has more takeaways from third quarter earnings results.

Cigna told investors the company is no longer pursuing a merger with Humana, opting to avoid tricky questions from federal regulators.

CITE: https://www.r2library.com/Resource

STOCKS UP

  • EV startup Rivian popped 13.71% after announcing a new $5.8 billion joint venture with Volkswagen to collaborate on a new line of vehicles that will begin rolling off the assembly line in 2027.
  • Rocket Lab…rocketed 28.44% to a new all-time high after increasing revenue 55% last quarter and announcing the first launch deal for its new Neutron rocket.
  • Charter Communications will purchase Liberty Broadband in an all-stock deal. Charter shares rose 3.63% on the news, while Liberty shares sank 5.05%.
  • Cava reported strong earnings today, including impressive same-store sales growth of 18%. Shares soared on the open, though ended the day up just 1.57%.
  • Flutter Entertainment, parent company of sports betting app FanDuel, rose 6.89% to hit an all-time high thanks to incredibly strong betting on the NFL last quarter.

STOCKS DOWN

  • The problems continue at Super Micro Computer, which announced it will need EVEN MORE time to submit its quarterly 10-Q form to the SEC. That’s on top of the delayed filing of its annual 10-K filing from back in June—and if it doesn’t file that by November 16, the stock will be delisted from the Nasdaq. Shares sank 6.31%.
  • Spirit Airlines really may go bankrupt this time. The beleaguered airline has lost hope of merging with Frontier Airlines, so shares plunged 59.32%.
  • Maplebear, which is the parent company of Instacart, delivered bad news for shareholders: Next quarter will be worse than expected. Shares fell 11.01%.
  • SoundHound AI reported record revenue last quarter, but shares plummeted 17.06% after the voice recognition stock also revealed much lower margins.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 1.39 points (0.02%) to 5,985.38; the Dow Jones Industrial Average® ($DJI) added 47.21 points (0.11%) to 43,958.19; and the NASDAQ Composite® ($COMP) fell 50.66 points (–0.26%) to 19,230.74. 
  • The 10-year Treasury note yield added two basis points to 4.45%, just below last week’s four-month high.
  • The CBOE Volatility Index® (VIX) slid to 14.03, down sharply from above 20 early last week.

CITE: https://tinyurl.com/tj8smmes

The Labor Department on Wednesday reported that consumer prices in October rose 2.6% from a year earlier. That marks a pickup in the pace of inflation from September, when prices were up 2.4% on the year.

A digital token inspired by a Shiba Inu dog meme is now worth more than the company that pioneered the assembly line. Yesterday, dogecoin continued its post-election surge to become more valuable than 121-year-old Ford.

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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Take the Physician-Focused FINANCIAL PLAN “Challenge”

Posted on November 12, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

Do You Have “What it Takes”?

Book Marcinko

DEM 2

By Professor David E. Marcinko MBBS DPM MBA MEd CMP®

Institute of Medical Business Advisors, Inc.

mba

www.CertifiedMedicalPlanner.org

cmp-logo16

My History

More than 20 years ago I crafted a comprehensive holistic financial plan for a young doctor colleague who was born in 1959. In fact, he was not even a medical student at the time; so “canned off-the-shelf plans”, computer generated software or generic spread sheets were not a viable creation option. It was all a granular, detailed, specific and cognitive work-product. Today, he is a board-certified internist.

So, in 2023, it is right and just to take a look back and see how well, or poorly, we’ve fared.

Now, I appreciate more than most how financial planning is a “process”; and not an isolated event. Yet, all sorts of “advisors” and “consultants” create and charge hefty fees for same, and on-going monitoring, every day.

The ME-P Challenge

Nevertheless, I challenge all you mid-career or senior financial planners /advisors to this competition; regardless of degree, certification or designation.

“Show me your financial plan” – AND – “I’ll show you my financial plan”

Here Comes the Judge

Then, our community of ME-P readers, subscribers, visitors and “judges” will decide the winner.

The contest is open to any financial advisor, planner, consultant, wealth manager, CFP®, CFA, insurance agent, CPA or CLU, ChFC, or stock-broker, etc., who is not afraid of transparency in his or her work product and purported expertise.

Of Financial Certifications and Designations

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Assessment

So, just send in a copy of any “blinded” physician-focused financial plan that is about 21 years old. We will post for all to see and review …. warts and all … including my own; three part mega-plan!

The winner will receive bragging rights, academic swagger, and expert promotion to our entire ME-P ecosystem and network of medical, business, law and graduate school communities; as well as physicians, nurses, healthcare executives and allied health care professionals.

An informed sought-after and lucrative sector – indeed!

IOW: Free publicity and positive “new-wave” PR – PRICELESS!

Of course, as an educator and professor of health economics and finance, we are pleased to present you with the deep medical business knowledge and detailed financial,managerial and accounting techniques used, with some real-life “tips and pearls” developed over the last two decades of R&D, right here:

MORE: Comprehensive Financial Planning Strategies for Doctors …[Best Practices from Leading Consultants and Certified Medical Planners™]

MORE: Risk Management Liability Insurance, and Asset Protection Strategies for Doctors and Advisors [Best Practices from Leading Consultants and Certified Medical Planners™]

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. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

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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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PART 1: My Sample Financial Plan I [Data gathering, goals and objectives]

PART 2: My Sample Financial Plan II [Data Analytics, Creation and Crafting]

PART 3: Request here: MarcinkoAdvisors@msn.com [Stress Testing and Completion]

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ANGUS DEATON’S: Paradox

Posted on November 12, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Angus Deaton’s 1980s studies, including one called “Why is consumption so smooth?” gave birth to a concept called the Deaton Paradox — in short, sharp shocks to income didn’t seem to cause similarly large shocks to consumption.

IOW: Consumption varies surprisingly smoothly despite sharp variations in income.

CITE: https://www.r2library.com/Resource/Title/0826102549

According to David Henderson, this was an important development in understanding the actions of consumers, causing economists to rethink the “permanent income hypothesis” developed by Milton Friedman, which suggested that people spend based on their lifetime income.

And, Mike Bird wrote a good article on Deaton the highlighted the Nobel Prize in Economics Committee.

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ECONOMIC: Paradoxes all Financial Advisors Should Know

Posted on November 11, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

BY DR. DAVID EDWARD MARCINKO MBA MEd CMP™

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A paradox is a logic and self-contradictory statement or a statement that runs contrary to one’s expectation. It is a statement that, despite apparently valid reasoning from true or apparently true premises, leads to a seemingly self-contradictory or a logically unacceptable conclusion. A paradox usually involves contradictory-yet-interrelated elements that exist simultaneously and persist over time. They result in “persistent contradiction between interdependent elements” leading to a lasting “unity of opposites”.

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And so, as we plan for our financial future thru a New Year Resolution for 2025, it’s helpful to be cognizant of these paradoxes. While there’s nothing we can do to control or change them, there is great value in being aware of them, so we can approach them with the right tools and the right mindset.

According to Adam Grossman, here are seven [7] of the paradoxes that can bedevil financial decision-making, clients and financial advisors, alike:

  1. There’s the paradox that all of the greatest fortunes—Carnegie, Rockefeller, Buffett, Gates—have been made by owning just one stock. And yet the best advice for individual investors is to do the opposite: to own broadly diversified index funds. More: https://tinyurl.com/285vftx4
  2. There’s the paradox that the stock market may appear over valued and yet it could become even more overvalued before it eventually declines. And when it does decline, it may be to a level that is even higher than where it is today.
  3. There’s the paradox that we make plans based on our understanding of the rules—and yet Congress can change the rules on us at any time, as the recent 2024 election results attest.
  4. There’s the paradox that we base our plans on historical averages—average stock market returns, average interest rates, average inflation rates and so on—and yet we only lead one life, so none of us will experience the average.
  5. There’s the paradox that we continue to be attracted to the prestige of high-cost colleges, even though rational analysis that looks at return on investment tells us that lower-cost state schools are usually the better bet.
  6. There’s the paradox that early retirement seems so appealing—and has even turned into a movement—and yet the reality of early retirement suggests that we might be better off staying at our desks.
  7. There’s the paradox that retirees’ worst fear is outliving their money and yet few choose the financial product that is purpose-built to solve that problem: the single-premium immediate annuity.

CITE: https://www.r2library.com/Resource/Title/0826102549

How should you respond to these paradoxes? As you plan for your financial future, embrace the concept of “loosely held views.”

In other words, make financial plans, but continuously update your views, question your assumptions and rethink your priorities.

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GIBSON’S PARADOX: Inaccurate Economic Observations

Posted on November 11, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

Why were interest rates and prices correlated?

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Gibson’s paradox is based on an economic observation made by British economist Alfred Herbert Gibson regarding the positive correlation between interest rates and wholesale price levels. John Maynard Keynes later called this relationship a paradox because he claimed that it could not be explained by existing economic theories.

CITE: https://www.r2library.com/Resource/Title/0826102549

There have been possible explanations raised by economists to solve Gibson’s paradox over the decades. But as long as the relationship between interest rates and prices remains artificially de-linked, there may not be enough interest by today’s macro-economists to pursue it any further.

In the end, Gibson’s paradox was neither Gibson’s (having been previously discovered by others) nor a true paradox (as plausible explanations already existed at the time of Keynes’s writing and more have been explored since) and is of little interest beyond being a historical footnote to the gold standard era.

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BRICS: Economics Defined

Posted on November 10, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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BRIC is an acronym for the economies of Brazil, Russia, India, China and South Africa,combined.

CITE: https://www.r2library.com/Resource/Title/0826102549

These are considered to be large developing economies that are part of a global, twenty-first century shift in economic power and influence away from the more established, traditional developed economies of the twentieth century.

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SORTINO: A Financial Risk Ratio

Posted on November 10, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

DEFINED

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The Sortino Ratio is similar to the Sharpe Ratio, it is a measure of risk-adjusted performance which looks at returns through the lens of the risk taken to achieve that performance, but instead of volatility of return, it uses downside variance as its measure of risk.

SHARP RATIO: https://medicalexecutivepost.com/2021/11/08/introducing-the-sharp-index/

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REO versus REIT

Posted on November 9, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Real Estate Operating Company (REOC)

A company that invests in real estate and whose shares trade on a public exchange.

Real Estate Investment Trust (REIT)

A real estate operating company (REOC) is similar to a real estate investment trust (REIT), except that an REOC will reinvest its earnings into the business, rather than distributing them to unit holders like REITs do.

Also, REOCs are more flexible than REITs in terms of what types of real estate investments they can make.

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KENNETH ARROW: Information Paradox

Posted on November 9, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

To sell information you need to give it away before the sale

By Dr. David Edward Marcinko MBA MEd

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THE FATHER OF HEALTH ECONOMICS

According to Wikipedia, a fundamental tenet of the paradox is that the customer, i.e. the potential purchaser of the information describing a technology (or other information having some value, such as facts), wants to know the technology and what it does in sufficient detail as to understand its capabilities or have information about the facts or products to decide whether or not to buy it. Once the customer has this detailed knowledge, however, the seller has in effect transferred the technology to the customer without any compensation. This has been argued to show the need for patent protection [HIPPA].

CITE: https://www.r2library.com/Resource/Title/0826102549

If the buyer trusts the seller or is protected via contract, then they only need to know the results that the technology will provide, along with any caveats for its usage in a given context. A problem is that sellers lie, they may be mistaken, one or both sides overlook side consequences for usage in a given context, or some unknown-unknown affects the actual outcome.

MORE :https://www.nobelprize.org/prizes/economic-sciences/1972/arrow/facts/

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ARTIFICIAL Scarcity

Posted on November 8, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Artificial Scarcity refers to the intentional limitation of the availability of a product or resource to create a sense of rarity, which often drives up its perceived value and price.

Think: surge pricing

And, circumstances with insufficient competition can lead to suppliers exercising enough market power to constrict supply. The clearest example is a monopoly, where a single producer has complete control over supply and can extract a additional price.

By creating a temporary shortage, sellers or producers can increase demand and capitalize on consumers’ fear of missing out, thereby influencing market dynamics to their advantage. This strategy is frequently used in marketing, particularly for limited-edition items or high-demand products.

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CURRENCY OPTIONS: Hedging and Overlays

Posted on November 8, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

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Currency Hedging is a risk-management strategy, as part of a foreign investment strategy, currency hedging is designed to reduce the impact from changes in the relative values of currencies involved in the foreign investment strategy.

CITE: https://www.r2library.com/Resource/Title/0826102549

In any foreign investment strategy, a significant part of the potential risk and return comes from exposure to relative currency value fluctuations. If exposure to those currency fluctuations is minimized, investors can experience more of a “pure play” exposure to the foreign investments. There is a variety of possible currency hedging strategies, ranging from swaps, options, and spot contracts to simply buying foreign currencies.

Currency Overlay is a financial trading strategy used to separate the management of currency risk from other portfolio strategies. A currency overlay manager can seek to hedge the risk from adverse movements in exchange rates, and/or attempt to profit from tactical currency views.

CITE: https://www.r2library.com/Resource/Title/0826102549

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DAILY UPDATE: FOMC Cuts Interest Rates as Stock Markets Rise

Posted on November 8, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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The Federal Reserve cut interest rates by 0.25 percentage points Thursday, the second consecutive cut after a two-year rate-hike run to curb post-pandemic inflation.

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What’s up

  • Lyft announced impressive earnings results thanks to more commuters using the ride-hailing service, as well as upbeat guidance for the future. Shares rose 22.92%.
  • Shareholders worried about a housing market slowdown hurting Zillow had nothing to fear: The real estate website crushed earnings estimates, and shares popped 23.77%.
  • Warner Bros. Discovery enjoyed its biggest single-quarter surge in subscribers ever thanks to streaming service Max, which sent shares soaring 11.81%.
  • Under Armour rocketed 23.33% higher after its cost-savings plan paid off last quarter and management guided for a strong quarter ahead.
  • Planet Fitness surprised shareholders with a solid quarter for the gym giant, as well as forecasts of more growth ahead. Shares climbed 11.26%.
  • Prison operators GEO Group and CoreCivic both surged on Trump’s election, and their rally continued today—in-spite of very different paths forward for each stock. GEO Group gained 13.63%, while CoreCivic rose 25.60%.

What’s down

  • Trump Media & Technology Group was one of the biggest winners on election night, and although the stock soared over the last few days, investors decided to take profits today. Shares sank 22.97%.
  • Wolfspeed plummeted 39.24% after announcing larger-than-expected losses last quarter, poor forecasts for next quarter, and layoffs to cut costs.
  • Match Group shareholders were heartbroken to hear that Tinder’s revenue fell last quarter, though strong revenue growth from Hinge helped ease the pain. Shares dropped 17.87%.
  • Virgin Galactic isn’t just a mean nickname from your high school years—it’s also a space stock that can’t make money to save its life. Shares fell 11.87%.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 44.06 points (0.74%) to 5,973.10; the Dow Jones Industrial Average® ($DJI) fell 0.59 points (0.00%) to 43,729.34; and the NASDAQ Composite® ($COMP) gained 285.99 points (1.51%) to 19,269.46.
  • The 10-year Treasury note yield (TNX) fell nine basis points to 4.34%, with most of the drop coming long before the Fed decision.
  • The CBOE Volatility Index® (VIX) continued its post-election plunge to 15.21.

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Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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INVESTING NEWS: Stocks, Bonds, Oil, Gold, Bitcoin and Sectors Review Post Election

Posted on November 7, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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BREAKING NEWS!

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  • Stocks surged and stayed higher all yesterday day on news of Donald Trump’s presidential victory. The Dow rocketed over 1,350 points as soon as markets opened, and all three indexes ended the day at record highs.
  • Treasury yields have paralleled Trump’s chances of taking the White House for the last few weeks, and his election sent them soaring to over 4.46% at one point today.
  • Oil and gold both fell as the dollar rose after Trump’s win. The greenback popped on the promise of Trump’s protectionist tariff policies and the lower likelihood of the Fed cutting interest rates as fast as previously expected.
  • Bitcoin surged as traders celebrated the beginning of the new, friendlier regulatory environment that Trump promised during his campaign.

CITE: https://www.r2library.com/Resource/Title/0826102549

Sector check-up

  • Financials were the biggest sector mover Wednesday, up 6.16%, hitting a new high.
  • Industrials were up 3.93% Wednesday, hitting a new high.
  • Energy was up 3.54% in the session. It’s now 4.28% from the April high.
  • Real Estate fell 2.64% during trading. It’s now 5.6% from the high. 
  • Consumer Staples fell 1.5%. The sector is 5.76% from the September high.
  • Utilities fell 1%. It’s now 5.72% from the mid-October high.
  • Duke Energy was flat over the past three months, and it is 6.3% from the October high.

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COCKTAIL: Party Effect

Posted on November 7, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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The cocktail party effect is the ability of the human hearing and auditory system to focus one’s listening attention on a particular speaker in a noisy environment, such as a crowded party. This allows people to focus on a specific conversation while filtering out other nearby conversations and background noise.

Consider that you’re at a crowded party, noise everywhere, but you hear your name mentioned across the room. How? Welcome to the Cocktail Party Effect.

Your brain is like a highly trained butler, filtering out the background chatter to catch something personally relevant. It’s not just your name, either; it could be juicy gossip or a mention of free pizza or an exciting new stock tip you’ve been considering; or even an IPO.

So, according to psychologist colleague Dan Ariely PhD, this selective attention keeps us sane in a noisy world, helping us focus on the things that matter – like whether that person just said “free drinks” or “freeloading, or “free-stock trading.”

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DAILY UPDATE: Record Stock Market Blast Off Post Trump Presidential Election

Posted on November 7, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Stocks Up

  • One more group of stocks that soared on a Trump election: Big Tech companies with antitrust problems. Another Trump presidency should go a long way toward clearing up the regulatory hurdles many companies have faced recently, which is why Alphabet popped 3.99% and Amazon rose 3.8%.
  • CVS Health surged 11.33% after meeting revenue forecasts but missing earnings expectations. However, the miss was due to a one-time charge, so shareholders quickly forgave the healthcare retailer.
  • Planet Fitness gained 6.09% on a surprise bid for bankrupt fitness chain Blink Holdings in an attempt to bolster its own gym business.

Stocks Down

  • Super Micro Computer had a chance to show the world it wasn’t committing the fraud it has recently been accused of. Instead, the company announced it is still unable to determine when it will file the quarterly report due August 29. Shares crashed 18.05%.
  • Home builder stocks sank on fears that a Trump presidency will slow the rate of Fed rate cuts, keeping mortgage rates higher for longer. DR Horton fell 3.8%, Lennar dropped 4.84%, Pulte Group lost 3.09%, and Toll Brothers tumbled 1.46%.
  • Cannabis stocks were betting big on a ballot measure in Florida to allow the sale of recreational marijuana. The initiative’s failure sent shares of Curaleaf plummeting 29.17%, Trulieve Cannabis plunged 38.8%, and Ayr Wellness sank 55.87%.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 146.28 points (2.53%) to 5,929.04; the Dow Jones Industrial Average® ($DJI) added 1,508.05 points (3.57%) to 43,729.93; and the NASDAQ Composite® ($COMP) gained 544.29 points (2.95%) to 18,983.47—a new closing high. 
  • The 10-year Treasury note yield (TNX) surged 14 basis points to 4.43%, its highest level since July.
  • The CBOE Volatility Index® (VIX) fell sharply to 16.3 as election-related uncertainty diminished.

CITE: https://tinyurl.com/tj8smmes

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STOCK MARKETS: Roaring and Soaring!

Posted on November 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

BREAKING FINANCIAL NEWS

By Staff Reporters

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Stocks just roared out of the gate this Wednesday morning following news that former President Donald Trump has secured a second term in the White House and Republicans won a majority in the Senate.

The Dow Jones Industrial Average rose 1,341 points, or about 3.1 percent, as the market opened, reaching a record high. It was the first time it has jumped more than 1,000 points in a single day since November 2022.

The S&P 500 also gained 1.9 percent, and the NASDAQ climbed 1.8 percent.

Despite concern from big business about Trump’s plan to impose blanket tariffs on imports to the U.S., Wall Street is anticipating tax cuts and deregulation during a second Trump presidency.

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INVESTING RISKS: Retained Earnings, Weighted Assets and Sequence of Return

Posted on November 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

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Retained Earnings Risk: Profits generated by a company that are not distributed to stockholders as dividends. Instead, they are either reinvested in the business or kept as a reserve for specific objectives, such as paying off debt or purchasing equipment. Retained earnings risks are also called “undistributed profits,” “undistributed earnings,” or “earned surplus.”

Risk-Weighted (or risk-adjusted) Assets: Within the context of measuring the financial stability of banks and other financial institutions, the risk-weighted assets figure is an aggregate of a financial institution’s assets (usually loans to its customers) after the loans have been individually adjusted for their risk. This involves multiplying each loan by a factor that reflects its risk. Low-risk loans are multiplied by a low number, high-risk by high. The aggregate number can then be used to calculate the financial institution’s capital ratio. Lower risk-weighted assets typically result in higher capital ratios, and higher risk-weighted assets usually translate to lower capital ratios.

Sequence-of-Returns Risk: The risk of market conditions impacting the overall returns of an investment portfolio during the period when a retiree is first starting to withdrawal money from investments as income. For example, if a retiree has to withdrawal income from his or her portfolio when market prices are depressed, the portfolio may lose out on the potential returns that income could have made once market prices recovered.

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DAILY UPDATE: Home Buyers and Jeff Bezos as Stock Markets Soar!

Posted on November 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

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First-time homebuyers in 2024 had a median income of $97,000, and their median age was 38. ​​OpenAI and Jeff Bezos invested in Physical Intelligence, a robot startup with the aim of “bringing general-purpose AI into the physical world.”

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Stocks Up

  • Cybersecurity darling Palantir soared 23.38% to a record high thanks to strong earnings, high AI demand, and big spending from the Department of Defense.
  • Astera Labs skyrocketed 37.70% after the semiconductor parts maker (and one of Nvidia’s key suppliers) announced strong earnings.
  • Crypto stocks had a great day thanks to a widespread cryptocurrency rally. Coinbase rose 4.13%, MicroStrategy gained 2.16%, and Riot Platforms jumped 8.13%.

Stocks Down

Trump Media & Technology Group arrested its recent downturn and popped 12% at one point today, but gave all those gains up and ended the day down 1.16%.

  • You’d think the end of a multi-week labor dispute costing billions of dollars would be a relief for shareholders, but Boeing still sank 2.62% on news that it’s reached an agreement with striking machinists.
  • It’s a me, lower revenue forecasts! Nintendo fell 1.68% after announcing that sales of its Switch console are starting to sag.
  • Wynn Resorts sagged 9.34% thanks to misses on both top and bottom line expectations last quarter.
  • Some of the smaller semiconductor stocks on the market took a beating today. NXP Semiconductor dropped 5.17% after announcing weaker-than-expected Q4 guidance, Lattice Semiconductor tumbled 1.37% after missing on sales forecasts and announcing job cuts, and while Cirrus Logic beat expectations this quarter, it still fell 7.09% on lower forecasts.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) rose 70.07 points (1.23%) to 5,782.76; the Dow Jones Industrial Average® ($DJI) added 427.28 points (1.02%) to 42,221.88; and the NASDAQ Composite® ($COMP) increased 259.19 points (1.43%) to 18,439.17.
  • The 10-year Treasury note yield (TNX) dropped two basis points to 4.29%.
  • The CBOE Volatility Index® (VIX) slipped to 20.72.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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METAVERSE MEDICINE: A Paradigm Shift?

Posted on November 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

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In what some are calling the next iteration of the internet, the metaverse is an unfamiliar digital world where you could be an avatar navigating computer-generated places and interacting with others in real time. In this space, the constraints of our physical, bricks and mortar world and travel habits fade. And new opportunities and challenges emerge.

CITE: https://www.r2library.com/Resource/Title/0826102549

For example:

  • Google in healthcare: The search giant has repeatedly successfully transferred its in-depth knowledge of algorithms in the field of medicine, particularly since it acquired DeepMind.
  • Apple in healthcare: Apple will keep on working on expanding the health features of its devices, Apple Watch and iPhones included.
  • Microsoft in healthcare: Microsoft’s cloud solutions provide integrated capabilities that make it easier to improve the healthcare experience.
  • Amazon in healthcare: Amazon will make further use of its vast knowledge of online shopping trends and behavior and will keep on providing what people need, from medicine to wearables.
  • IBM in healthcare: IBM has a lot to offer in federated learning, blockchain, and quantum computing.
  • Nvidia in healthcare: NVIDIA seems incredibly focused on its approach to healthcare. We can expect NVIDIA to be a leader in the use of artificial intelligence in healthcare.
  • Facebook in healthcare: The Metaverse developed by Facebook/Meta has incredible potential to revolutionize healthcare.

All this technology has huge potential because it uses both virtual reality (VR) and augmented reality (AR) technology to work in virtual spaces: All signs point to the metaverse being widely used as a disruptive change in healthcare, from better surgical precision to therapeutic uses to social-distance accommodations and more.

But along with these improvements come new problems that will change what we know about modern healthcare. The metaverse is a paradigm shift in healthcare that everyone involved needs to be aware of. This is because it changes how medical infrastructure is built, how startup costs are covered, and how data security and privacy are handled.

CITE: https://www.r2library.com/Resource/Title/0826102549

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ARTIFICIAL INTELLIGENCE: Big Technology Stocks

Posted on November 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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After its AI-related earnings disappointed Wall Street last quarter, Big Tech doubled down in the latest period:

  • Amazon spent $22.6 billion on property and equipment like data centers and chips. That’s an 81% spike from the same time last year.
  • Meta raised its low-end guidance for capex (capital expenditures), which could reach $40 billion by the end of the year. It beat earnings estimates, even with AR glasses subsidiary Reality Labs costing $4.4 billion in operating losses.
  • Apple is still betting on Apple Intelligence to boost sales. Most revenue came from the new iPhone 16, Apple Watch, and AirPods, but Apple services like TV+ and iCloud also grew massively to account for a quarter of the business.
  • Google crushed earnings estimates and revealed that more than 25% of all new code it writes is generated by AI (and reviewed by engineers).

CITE: https://www.r2library.com/Resource/Title/0826102549

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DAILY UPDATE: CVS Splits as Stocks Down in Slow Session

Posted on November 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

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Among consideration for CVS is splitting up its assets: CVS Pharmacy, pharmacy benefit manager CVS Caremark, and insurance arm Aetna. The company has reportedly been in talks with bankers about the move, Reuters reported early this month.

CITE: https://www.r2library.com/Resource

STOCKS UP

  • Just as Nvidia will replace Intel, Sherwin Williams will replace Dow Inc. on the Dow (how embarrassing, getting kicked off an index you share a name with). Sherwin Williams popped 4.59%, while Dow Inc. fell 2.08%.
  • Chewy is also getting added to an index, replacing Stericycle on the MidCap 400. Shares rose 6.34%.
  • Peloton pedaled 3.59% higher on a double upgrade from Bank of America analysts, who like the bike company’s higher profit outlook and hiring of new CEO Peter Stern from Ford.
  • Yum! China, the company that operates Pizza Hut and KFC restaurants in China, climbed 7.12% after announcing that new store openings translated into better-than-expected revenue and earnings last quarter.

STOCKS DOWN

Nuclear energy stocks took a big hit today after the Federal Energy Regulatory Commission ruled that Talen Energy could not increase the amount of energy its nuclear plant in Susquehanna, PA, produces in order to power an Amazon data center. Talen fell 2.23%, Vistra Corp sank 3.18%, and Constellation Energy plummeted 12.46%.

CITE: https://tinyurl.com/2h47urt5

Here’s where the major benchmarks ended:

  • The S&P 500® index (SPX) dipped 16.11 points (–0.28%) to 5,712.69; the $DJI dropped 257.59 points (–0.61%) to 41,794.60; and the $COMP lost 59.93 points (–0.33%) to 18,179.98.
  • The 10-year Treasury note yield (TNX) fell five basis points to 4.31%.
  • The CBOE Volatility Index® (VIX)edged up to 22.11, still below last week’s peaks.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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ECONOMICS: John B. Taylor’s Rule

Posted on November 4, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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Named for a U.S. economist, the JB Taylor Rule is a mathematical monetary-policy formula that recommends how much a central bank should change its nominal short-term interest rate target (such as the U.S. Federal Reserve’s federal funds rate target) in response to changes in economic conditions, particularly inflation and economic growth. It’s typically viewed as guideline for raising short-term interest rates as inflation and potentially inflationary pressures increase. The rule recommends a relatively high interest rate (“tight” monetary policy) when inflation is above its target or when the economy is above its full employment level, and a relatively low interest rate (“easy” monetary policy) under the opposite conditions.

To illustrate, the monetary policy of the FOMC, changed throughout the 20th century. The period between the 1960s and the 1970s is evaluated by Taylor and others as a period of poor monetary policy; the later years typically characterized as stagflation. The inflation rate was high and increasing, while interest rates were kept low. Since the mid-1970s monetary targets have been used in many countries as a means to target inflation.

However, in the 2000s the actual interest rate in advanced economics, notably in the US, was kept below the value suggested by the Taylor rule.

CITE: https://www.r2library.com/Resource/Title/0826102549

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DAILY UPDATE: Nvidia, Intel, Oil, Bitcoin, Treasury Yields, CMS and Physician Pay

Posted on November 4, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

***

http://www.MarcinkoAssociates.com

Daily Update Provided By Staff Reporters Since 2007.
How May We Serve You?
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CITE: https://www.r2library.com/Resource

Nvidia is replacing Intel on the Dow Jones Industrial Average, a shakeup to the blue-chip index that replaces a flagging semiconductor company with the primary vendor of GPUs for AI.

CITE: https://tinyurl.com/2h47urt5

  • Despite selling off last week, stocks spent Friday comfortably in the green thanks to strong earnings from big tech.
  • Treasury yields rose back above 4.3% as bonds sold off and investors poured money into risk assets.
  • Oil rose a bit on reports that Iran may retaliate against Israel sometime soon.
  • Bitcoin was unable to hold the line and continued to fall today as crypto volatility continues to escalate ahead of the election.

CITE: https://tinyurl.com/tj8smmes

Bipartisan Legislation Aims to Stop Medicare Cuts & Boost Physician Pay in 2025

Physicians and other healthcare practitioners may get a pay boost in 2025 through a bipartisan bill recently introduced in Congress. The proposed bill seeks to block planned Medicare pay cuts next year and would provide the first inflationary update to physician pay in years. The Medicare Patient Access and Practice Stabilization Act would counteract the 2.8% cut to the conversion factor proposed by the Centers for Medicare and Medicaid Services (CMS) in the draft CY-2025 Physician Fee Schedule. A stop-gap pay fix is usually enacted by Congress at the end of the year. 

Source: Emma Beavins, Fierce Healthcare [10/30/24].

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HFRI: Fund of Funds Composite Index

Posted on November 3, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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HFRI: Fund of Funds invests with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager.

CITE: https://www.r2library.com/Resource/Title/0826102549

The Fund of Funds manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers.

HFRI: https://hfr-wp-s3.s3.amazonaws.com/wp-content/uploads/2024/03/05142042/HFRI_formulaic_methodology.pdf

The HFRI Fund of Funds Index is not included in the HFRI Fund Weighted Composite Index.

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STRIPES: Separate Trading of Registered Interest and Principal of Securities)

Posted on November 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

SPONSOR: http://www.MarcinkoAssociates.com

DEFINITIONS

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STRIPS (Separate Trading of Registered Interest and Principal of Securities) is an acronym that describes both a government bond issuance program and the securities issued by the program. STRIPS are a form of zero-coupon security (defined below) created under the U.S. Treasury’s STRIPS program.

Originally, zero-coupon securities were created by broker-dealers who bought Treasury bonds and deposited these securities with a custodian bank. The broker-dealers then sold receipts representing ownership interests in the coupons or principal portions of the bonds.

CITE: https://www.r2library.com/Resource/Title/0826102549

Some examples of zero-coupon securities sold through custodial receipt programs are CATS (Certificates of Accrual on Treasury Securities), TIGRs (Treasury Investment Growth Receipts) and generic TRs (Treasury Receipts). The U.S. Treasury subsequently introduced a program called Separate Trading of Registered Interest and Principal of Securities (STRIPS), through which it exchanges eligible securities for their component parts and then allows the component parts to trade in book-entry form.

STRIPS are direct obligations of the U.S. government and have the same credit risks as other U.S. Treasury securities. STRIPS are generally considered the most liquid (easily bought and sold) zero-coupon securities.

GOVERNMENT: https://www.treasurydirect.gov/marketable-securities/strips/

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DAILY UPDATE: Ford, Peloton and Starbucks as Stocks Climb

Posted on November 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

***

Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

***

http://www.MarcinkoAssociates.com

Daily Update Provided By Staff Reporters Since 2007.
How May We Serve You?
© Copyright Institute of Medical Business Advisors, Inc. All rights reserved. 2024

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Ford paused production of its F-150 Lightning electric truck from mid-November to early January as demand for the once-coveted EV dwindles.

Peloton named Peter Stern, the co-founder of Apple Fitness+, as its next CEO.

Starbucks is bringing back Sharpied names on cups for the first time in four years as new CEO Brian Niccol tries to shake up the struggling coffee chain.

CITE: https://www.r2library.com/Resource

STOCKS UP

  • Boeing offered striking machinists yet another new contract offer, including a 38% pay raise over the next four years. The union will vote on the contract on Monday. Shares climbed 3.54%.
  • Avis Budget motored 10.92% higher despite missing forecasts on both earnings and revenue. Shareholders celebrated the rental car company’s strong growth expectations from management and took advantage of a cheap valuation.
  • Globalstar rocketed 32.38% after the satellite communications company announced an expanded deal with Apple.
  • Charter Communications soared 11.87% after losing fewer subscribers than expected, which is like a back-handed compliment in the investing world.

STOCKS DOWN

  • Trump Media & Technology Group remains on the roller coaster, falling another 13.53% today as early exit polls show Vice President Kamala Harris with a lead in several key states.
  • Wayfair may have met earnings expectations last quarter, but the online home goods retailer also lost customers and fulfilled fewer orders. Shares fell 6.26%.
  • Super Micro Computer continued to sell off after the resignation of its financial auditor, an almost-sure sign of fraud. Shares sank another 10.51%.

CITE: https://tinyurl.com/2h47urt5

  • The S&P 500® index (SPX) rose 23.35 (0.41%) to 5,728.80 to end the week down 1.37%; the Dow Jones Industrial Average® ($DJI) added 288.73 points (0.69%) to 42,052.19 to end the week down 0.15%; and the NASDAQ Composite®($COMP) gained 144.76 points (0.80%) to 18,239.92 to end the week down 1.50%.
  • The 10-year Treasury note yield (TNX) climbed eight points to 4.36%, the highest since early July.
  • The CBOE Volatility Index® (VIX)remained elevated at 21.88.

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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