BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
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Markets: Last week’s market bloodbath will go down in the history books. The S&P 500’s 10% plunge on Thursday and Friday, after President Trump announced massive tariffs, ranks among the steepest two-day decline in the last 70 years, on par with Black Monday in 1987, the post-Lehman Brothers rout in 2008, and the Covid plunge in March 2020. More than $6 trillion was wiped out from stocks over two days, and the NASDAQ entered a bear market, down 20% from a previous high.
Trading restarted at 9:30 am ET for what Bill Ackmanpredicts will be “one of the more interesting days in our country’s economic history.”
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Monday Crash?
On the other hand, CNBC host and market commentator Jim Cramer just warned that America is in store for another “Black Monday” market crash similar to the record 1987 collapse if President Trump doesn’t curtail his tariff plan.
Cramer — who noted that the 1987 crash saw the Dow Jones Industrial Average fall by 22.6% in a single day — said the bloodbath could be repeated after the brutal two-day sell-off following the announcement of Trump’s sweeping tariffs against nearly 90 countries.
If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario … the one where we went down three days and then down 22% on Monday, has the most cogency,” Cramer said on his show Saturday, referencing the worst single-day fall in the history of the Dow.
In 2015, the Federal Trade Commission (FTC) released a staff report entitled Internet of Things: Privacy & Security in a Connected World, in which it recommend that Internet of Things (IoT) style devices, which of course include medical and clinical devices, need to maintain a good security posture. It’s worth noting that the FDA, FTC, and other government regulators are centering on a few key guidelines. The following recommendations come directly from the FTC report.
Companies should build security into their devices at the outset, rather than as an afterthought. As part of the security by design process, companies should consider:
Conducting a privacy or security risk assessment
Minimizing the data they collect and retain
Testing their security measures before launching their products
Companies should train all employees about good security, and ensure that security issues are addressed at the appropriate level of responsibility within the organization
Companies should retain service providers that are capable of maintaining reasonable security and provide reasonable oversight for these service providers.
When companies identify significant risks within their systems, they should implement a defense-in-depth approach, in which they consider implementing security measures at several levels.
Companies should consider implementing reasonable access control measures to limit the ability of an unauthorized person to access a consumer’s device, data, or even the consumer’s network.
Companies should continue to monitor products throughout the life cycle and, to the extent feasible, patch known vulnerabilities
According to colleague Shahid N. Shah MS, the FTC report and FDA guidelines are remarkably consistent. When thinking of cybersecurity and data privacy, engineers tend to think about authentication, authorization, and encryption. Those are the relatively easy topics. For safety-critical devices, however, things are much more difficult and need to encompass a larger surface of questions, including but not limited to:
Asset Inventory: Is the device discoverable, and can it associate itself with standard IT inventory systems so that revision management, software updates, and monitoring can be automated?
Cyber Insurance: Does the device have enough security documentation to allow it to be insured by standard cyber insurance riders?
Patching: How is the firmware, operating system (OS), or application going to be patched by IT staff within hospitals (or the home for remote devices)?
Internal Threats: Has the device been designed to circumvent insider (hospital staff, network participants, etc.) threats?
External Threats: Has the device been designed to lock down the device from external threats?
Embedded OS Security: Is the device sufficiently hardened at the operating system level, such that no extraneous software components, which increase the attack surface, are present?
Firmware and Hardware Security: Are the firmware and hardware components sourced from reputable suppliers and free of state-sponsored spying?
Application Security: Is the Microsoft Security Development Lifecycle (SDL) or similar software security assurance process integrated into the engineering process?
Network Security: Have all network protocols not in use by the device been turned off so that they are not broadcasting?
Data Privacy: What data segmentation, logging, and auditing is being done to ensure appropriate data privacy?
HIPAA Compliance: Have proper steps been followed to ensure Health Insurance Portability and Accountability Act (HIPAA) compliance?
FISMA Compliance: If you’re selling to the federal government, have proper steps, such as use of Federal Information Processing Standard (FIPS) certified encryption, been followed to ensure Federal Information Security Management Act (FISMA) compliance?
Data Loss Prevention (DLP): Is there monitoring in place to ensure data leakage outside of the device doesn’t occur?
Vulnerabilities: Have common vulnerabilities such as the Open Web Application Security Project (OWASP) Top 10 been reviewed?
Data Sharing: Are proper data sharing agreements in place to allow sharing of data across devices and networks?
Password Management: Are passwords hardcoded into the device or made configurable?
Configuration Protection: Are configuration files properly check-summed and protected against malicious changes?
ASSESSMENT
It is vital to perform a security assessment on a healthcare practice to understand the environment, identify risks and perform risk mitigation. A one-time security assessment with risk mitigation is not sufficient in 2025. This is a continuous process that needs to be performed religiously to maintain a secure and compliant practice.
Your knee hurts, so you pay a visit to your favorite orthopedist. He smiles, maybe even gives you a hug, and then tells you: “I feel your pain. Really, I do. But I don’t treat left knees, only right ones. I find I am so much better with the right ones. Last time I worked on a left knee, I didn’t do so well.”
Though many professionals — doctors as well as lawyers, architects and engineers — get to choose their specializations, they rarely get to choose the problems they solve. Problems choose them. Investors enjoy the unique luxury of choosing problems that let them maximize the use of not just their IQ but also their EQ — emotional intelligence.
Let’s start with IQ. Our intellectual capacity to analyze problems will vary with the problem in front of us. Just as we breezed through some subjects in college and struggled with others, our ability to understand the current and future dynamics of various companies and industries will fluctuate as well. This is why we buy stocks that fall within our sphere of competence. We tend to stick with ones where our IQ is the highest.
Though we usually think about our capacity to analyze problems as being dependable and stable over time, it isn’t. It might be if we were characters from Star Trek, with complete control over our emotions, like Mr. Spock, or who lacked emotions, like Lieutenant Commander Data. This is where our EQ comes in.
I am not a licensed psychologist, but I have huge experience treating a very difficult patient: me. And what I have found is that emotions have two troublesome effects on me. First, they distort probabilities; so even if my intellectual capacity to analyze a problem is not impacted, my brain may be solving a distorted problem. Second, my IQ is not constant, and my ability to process information effectively declines under stress. I either lose the big picture or overlook important details. This dilemma is not unique to me; I’m sure it affects all of us to various degrees.
The higher my EQ with regard to a particular company, the more likely that my IQ will not degrade when things go wrong (or even when they go right). There is a good reason why doctors don’t treat their own children: Their ability to be rational (properly weighing probabilities) may be severely compromised by their emotions.
A friend of mine who is a terrific investor, and who will remain nameless though his name is George, once told me that he never invests in grocery store stocks because he can’t be rational when he holds them. If we spent some Freudian time with him, we’d probably discover that he had a traumatic childhood event at the grocery store (he may have been caught shoplifting a candy bar when he was eight), or he may have had a bad experience with a grocery stock early in his career. The reason for his problem is irrelevant; what is important is that he has realized that his high IQ will be impaired by his low EQ if he owns grocery stocks.
There is no cure for emotions, but we can dramatically minimize the impact they have on us as investors by adjusting our investment process. First and foremost, investors have the incredible advantage of picking domains where they can remain rational.
To be a successful investor, you don’t need Albert Einstein’s IQ (though sometimes I wish I had Spock’s EQ). Warren Buffett undoubtedly has a very high IQ, but even the Oracle of Omaha chooses carefully his battles; for instance, he doesn’t invest in technology stocks.
Investors have the luxury of investing only in stocks for which both their IQ and EQ are maximized, because there are tens of thousands of stocks out there to choose from, and they need just a few dozen.
Meanwhile, I hope when I go see the doctor, he will tell me, “I don’t do left knees,” because the best result will come from a doctor who while treating me will utilize both IQ and EQ.
Posted on April 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
WARNING – WARNING
By Dr. DavidEdwardMarcinko; MBA MEd
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According to www.NPR.org, there are more than120,000 health care forums on the Internet with opinions ranging from pharmaceuticals, to sexual dysfunction, to acne. The same goes for commercial doctor blogs that promote lotions, balms and potions, diets and vitamins, minerals, herbs, drinks and elixirs, or various other ingest-ants, digest-ants or pharmaceuticals, etc.
And, to other doctors, the blogging craze is a new novelty where there are no rules, protocols, standards or precise figures on how many “medical-doctor” or related physician-blogs are “out there.” Unfortunately, too many recount gory ER scenes, or pictorially illustrate horrific medical conditions, or serious and traumatic injuries. Of course, others simply are medical practice websites, or those that entice patients into more lucrative plastic surgery or concierge medical practices. Some are from self-serving/credible plaintiff-seeking attorneys wishing to assist patients.
Not all physician blogs are geared toward practice information, marketing or medical sensationalism. In fact, just the opposite seems to be the case in extremely candid blogs, like “Ranting Docs”, “White Coat Rants,” “Grunt Docs”, “Cancer Doc,” “The Happy Hospitalist,” “Mom MD”, “Cross-Over Health”, “Angry Docs” and “M.D.O.D.,” which bills itself as “Random Thoughts from a Few Cantankerous American Physicians.”
According to some of these, they are more like personal journals, or public diaries, where doctors vent about reimbursement rates, difficult cases, medical mistakes, declining medical prestige and control, and/or what a “bummer” it is to have so many patients die; not pay, or who are indigent, noncompliant. We call these the “disgruntled doctor sites.” Some even talk about their own patients, coding issues, or various doctor-patient shenanigans.
But, according to psychiatrist and blogger Dr. Deborah Peel and others, the problem with blogging about patients is the danger that one will be able to identify themselves – the doctor – or that others who know them will be able to identify them.” Her affiliation, Patient Privacy Rights, rightly worries that patients might track back to the individual, and adversely affect their employment, health insurance or other aspects of life.
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And, according to Dr. Jay S. Grife; MA Esq., it is certainly true that if a doctor violates a patient’s privacy there could be legal consequences. Under HIPAA, physicians could face fines or even jail time. In some states, patients can file a civil lawsuit if they believe a doctor has violated their privacy. Still, internet privacy issues are an evolving gray-area that if not wrong, may still be morally and ethically questionable [personal communication].
Our colleague Robert Wachter MD, author of the blog called “Wachter’s World,” says it’s important for doctors to be able to share cases, as long as they change the facts substantially. On the other hand, the author of “Wachter’s World” and a leading expert on patient safety alternately suggests “You might say we as doctors should never be talking about experiences with our patients online or in books or in articles.” But, he says that “patients shouldn’t take all the information on blogs at face value. Taken for what they are — unedited opinions, and in some cases entertainment — blogs can give readers some useful insight into the good, the bad and the ugly of the medical profession”. Link: http://www.the-hospitalist.org/blogs
Well, fair enough! But, doctors unhappy with their current medical career choice, or its modern evolution, should probably consider counseling or even career change guidance, re-education and re-engineering. It is very inappropriate to vent career frustrations in a public venue. It’s far better for the blog to be private and/or by invitation only; if at all [Personal communication].
We believe that a hybrid mash-up of both views can be wholly appropriate, or grossly inappropriate in some cases. Of course the devil is in the details; linguistics and semantics aside. Nevertheless; what is not addressed in electronic physician “mea-culpas” are the professional liability risks and concerns that are evolving in this quasi-professional, quasi-lay, communication forum.
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Example: We have seen medical mistakes, and liability admissions of all sorts, freely and glibly presented. In fact,
“Some physicians find that the act of liability blogging as a professional confession that is useful in moving past their malpractice mistakes. And, it is also a useful way to begin a commitment to a better professional life of caring in the future. It helps eliminate the toxic residue and angst of professional liability and guilt. Moreover, as they are unburdened of past acts of omission or commission, doctors should remember to also forgive those who have wronged them. This helps greatly with the process and brings additional peace.”
However, although some may say that this electronic confession is good for the soul, it may not be good for your professional liability carrier, or you, when plaintiff’s attorneys release a legion of IT focused interns, or automated bots, searching online for your self-admissions and scouring for your self-incriminations. Of course, a direct connection to a specific patient may still not be made and no HIPAA violation is involved. But, a vivid imagination is not need needed to envision this type of blind medical malpractice discovery deposition query even now.
QUESTION:“Doctor Smith, I noted all the medical errors admitted on your blog. What other mistakes did you make in the care and treatment of my client?”
And so, the question of plausible deniability, or culpability, is easily raised. If you must journalize your thoughts for sanity or stress release; do it in print. And, don’t tell anyone about it so the diary won’t be subpoenaed. Then tear it up and throw it away. Remember, with risk management, “It is all about credibility.” Don’t trash yours! These thoughts may be especially important if you covet a medical career as a researcher, editor, educator, medical expert or something other than a working-class or employed physician.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Profitability ratios measure a company’s ability to generate income relative to revenue, balance sheet assets, operating costs, and equity. Common profitability financial ratios include the following:
The gross margin ratio compares the gross profit of a company to its net sales to show how much profit a company makes after paying its cost of goods sold:
Gross margin ratio = Gross profit / Net sales
The operating margin ratio, sometimes known as the return on sales ratio, compares the operating income of a company to its net sales to determine operating efficiency:
Operating margin ratio = Operating income / Net sales
The return on assets ratio measures how efficiently a company is using its assets to generate profit:
Return on assets ratio = Net income / Total assets
The return on equity ratio measures how efficiently a company is using its equity to generate profit:
Return on equity ratio = Net income / Shareholder’s equity
Posted on April 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING US STOCK MARKET NEWS
By ME-P Staff Reporters
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Stocks in the U.S. opened sharply lower on Friday, extending a slide from the previous trading session triggered by President Trump’s announcement of sweeping new tariffs on U.S. imports earlier this week.
The S&P 500 fell 144 points, or 2.5%, to 5,252 as of 9:34 a.m. EST. The Dow Jones Industrial Average tumbled 1,006 points, or 2.5%, and the NASDAQ Composite slid 3.1%.
The indexes’ free-fall Thursday was their biggest one-day drop since 2020, with more than $2 trillion in investor wealth erased from the S&P 500. The S&P 500 and Dow each sank more than 4% yesterday, while the tech-heavy NASDAQ plunged nearly 6%.
NOTE: Drops of this magnitude aren’t unheard of on Wall Street, but they’re rare. Over the last 25 years, the S&P 500 has fallen 4% in a single day 38 times, according to Adam Turnquist, chief technical strategist for brokerage firm LPL Financial.
Stocks were decimated yesterday in the first full trading day following President Trump’s tariff announcement. It was the biggest single-day decline since the start of the Covid-19 pandemic in March 2020. Every Magnificent Seven stock was battered—Apple worst of all. And so perhaps it is a good time to discuss the concept of “Money Scripts”.
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Money Scripts are unconscious beliefs about money that are typically only partially true, are developed in childhood, and drive adult financial behaviors. Money scripts may be the result of “financial flashpoints,” which are salient early experiences around money that have a lasting impact in adulthood. Money scripts are often passed down through the generations and social groups often share similar money scripts. And so, we argue that Money scripts are at the root of all illogical, ill-advised, self-destructive, or self-limiting financial behaviors.
In research at Kansas State University [KSU], researchers identified four distinct Money script patterns, which are associated with financial health and predict financial behaviors. These include: (a) money avoidance, (b) money worship, (c) money status, and (d) money vigilance [personal communication Brad Klontz, PsyD, CFP®, Kenneth Shubin-Stein, MD, MPH, MS, CFA and Sonya Britt, PhD, CFP®].
And so, we all like to think our financial decisions are fully rational, but the truth is that our subconscious beliefs have a dramatic impact on our money and financial decisions. These money scripts are important to know and understand. A summary is below:
Money Avoidance
Money avoidance scripts are illustrated by beliefs such as “Rich people are greedy,”“It is not okay to have more than you need,” and “I do not deserve a lot of money when others have less than me.” Money avoiders believe that money is bad or that they do not deserve money. They believe that wealthy people are corrupt and there is virtue in living with less money. They may sabotage their financial success or give money away even though they cannot afford to do so. Money avoidance scripts may be associated with lower income and lower net worth and predict financial behaviors including ignoring bank statements, overspending, financial dependence on others, financial enabling of others, and having trouble sticking to a budget.
Money Worship
Money worship is typified by beliefs such as “More money will make you happier,” “You can never have enough money,” and “Money would solve all my problems.” Money worshipers are convinced that money is the key to happiness. At the same time, they believe that one can never have enough. Money worships have lower income, lower net worth, and higher credit card debt. They are more likely to be hoarders, spend compulsively, and put work ahead of family.
Money Status
Money status scripts include “I will not buy something unless it is new,” “Your self-worth equals you net worth,” and “If something isn’t considered the ‘best’ it is not worth buying.” Money status seekers see net worth and self-worth as being synonymous. They pretend to have more money than they do and tend to overspend as a result. They often grew up in poorer families and believe that the universe should take care of their financial needs if they live a virtuous life. Money status scripts are associated with compulsive gambling, overspending, being financially dependent on others, and lying to one’s spouse about spending.
Money Vigilance
Money vigilant beliefs include “It is important to save for a rainy day,” “You should always look for the best deal, even if it takes more time,” and “I would be a nervous wreck if I did not have an emergency fund.” The money vigilants are alert, watchful and concerned about their financial welfare. They are more likely to save and less likely to buy on credit. As a result, they tend to have higher income and higher net worth. They also have a tendency to be anxious about money and are secretive about their financial status outside of their household. While money vigilance is associated with frugality and saving, excessive anxiety can keep someone from enjoying the benefits that money can provide.
Identification
When money scripts are identified, it is helpful to examine where they came from. A simple behavioral finance technique involves reflecting on the following questions:
What three lessons did you learn about money from your mother?
What three lessons did you learn about money from your father?
What is your first memory around money?
What is your most painful money memory?
What is your most joyful money memory?
What money scripts emerged for you from this experience?
How have they helped you?
How have they hurt you?
What money scripts do you need to change?
Conclusion
Ideally, from a balanced middle ground, we can see past the limitations of money scripts, our self and others who are polarized. Those who believe “Money is meant to be spent” or “Money is meant to be saved” have a world view that results in extreme positions. Labeling them as “correct” or “wrong” is not a useful way to try to shift anyone’s polarized money script beliefs.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Posted on April 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS – MARKET VOLATILITY
By Staff Reporters
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US stocks nosedived on Thursday, with the Dow tumbling more than 1,200 points as President Trump’s surprisingly steep “Liberation Day” tariffs sent shock waves through markets worldwide. The tech-heavy NASDAQ Composite (IXIC) led the sell-off, plummeting over 4%. The S&P 500 (GSPC) dove 3.7%, while the Dow Jones Industrial Average (^DJI) tumbled roughly 3%. [ongoing story].
So, does the traditional 60 stock / 40 bond strategy still work or do we need another portfolio model?
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The 60/40 strategy evolved out of American economist Harry Markowitz’s groundbreaking 1950s work on modern portfolio theory, which holds that investors should diversify their holdings with a mix of high-risk, high-return assets and low-risk, low-return assets based on their individual circumstances.
While a portfolio with a mix of 40% bonds and 60% equities may bring lower returns than all-stock holdings, the diversification generally brings lower variance in the returns—meaning more reliability—as long as there isn’t a strong correlation between stock and bond returns (ideally the correlation is negative, with bond returns rising while stock returns fall).
For 60/40 to work, bonds must be less volatile than stocks and economic growth and inflation have to move up and down in tandem. Typically, the same economic growth that powers rallies in equities also pushes up inflation—and bond returns down. Conversely, in a recession stocks drop and inflation is low, pushing up bond prices.
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But, the traditional 60/40 portfolio may “no longer fully represent true diversification,” BlackRock CEO Larry Fink writes in a new letter to investors.
Instead, the “future standard portfolio” may move toward 50/30/20 with stocks, bonds and private assets like real estate, infrastructure and private credit, Fink writes.
Here’s what experts say individual investors may want to consider before dabbling in private investments.
It may be time to rethink the traditional 60/40 investment portfolio, according to BlackRock CEO Larry Fink. In a new letter to investors, Fink writes the traditional allocation comprised of 60% stocks and 40% bonds that dates back to the 1950s “may no longer fully represent true diversification.“
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
QUESTION:Can I invest my Individual Retirement Account [IRA] in a Hedge Fund?
This is up to the manager, but there is no legal restriction on a hedge fund accepting individual retirement account (IRA) assets. IRA accounts are not well suited for funds that make extensive use of leverage, however. In such cases, the fund is likely to generate significant amounts of unrelated business taxable income (UBTI) – profits of the fund attributable to the use of leverage. The holder of an IRA account must pay taxes on UBTI, even if the UBTI was generated in an IRA account.
But, today’s hedge funds may or may not use leverage. Many hedge funds are not hedged at all, but rather are just specialized versions of regular long stock portfolios. If such funds do not use much leverage, IRA investors will not encounter much difficulty with UBTI and should not hesitate in considering these funds.
In considering whether to accept IRA money, hedge fund managers must consider several factors. If the only type of retirement money accepted by the hedge funds is IRA money, then the manager has no limit on how much retirement money the fund can accept. If, however, there are other types of retirement money invested in the fund, such as pension funds, IRA money will be counted towards a total of 25 percent of fund assets that can be invested in retirement accounts before the fund becomes subject to the Employment Retirement Income Security Act of 1974 (ERISA). Funds subject to ERISA regulations face a heavy administrative burden and more restrictions than most fund managers like.
Finally, IRA distributions from a hedge fund are subject to the standard 20 percent withholding unless the funds are directly rolled over to other qualified plans.
In the latest iteration of Trump Administration healthcare cuts, the Centers for Medicare & Medicaid Services (CMS) announced on March 12th, 2025 that four Center for Medicare and Medicaid Innovation (CMMI) payment models would be sunset at the end of 2025, earlier than originally scheduled.
Cutting these models, which decision was based on “a comprehensive and data-driven review of [CMS’s] model portfolio,” are anticipated to save nearly $750 million (although the source of these savings was not detailed).
This Health Capital Topics article discusses the models being ended and the impact on healthcare stakeholders. (Read more…)
Posted on March 30, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Negativity bias is not totally separate from pessimism bias, but it is subtly and importantly distinct. In fact, it works according to similar mechanics as the sunk cost fallacy in that it reflects our profound aversion to losing. We like to win, but we hate to lose even more.
And so, according to cognitive scientist Mackenzie Marcinko PhD, when we make a decision, we generally think in terms of outcomes—either positive or negative. The bias comes into play when we irrationally weigh the potential for a negative outcome as more important than that of a positive outcome.
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Pessimism bias on the other hand, is a cognitive bias that causes people to overestimate the likelihood of negative things and underestimate the likelihood of positive things, especially when it comes to assuming that future events will have a bad outcome.
For example, the pessimism bias could cause someone to believe that they’re going to fail an exam, even though they’re well-prepared and are likely to get a good grade.
According to colleague Dan Ariely PhD, The pessimism bias can distort people’s thinking, including your own, in a way that leads to irrational decision-making, as well as to various issues with your mental health and emotional well being.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
In the first month of 2025, hospital revenue and expenses both increased, balancing each other out and resulting in continued steady financial performance for hospitals, according to Kaufman Hall’s January 2025 National Hospital Flash Report.
Revenues grew more quickly in the inpatient setting, as more patients were treated in the hospital and emergency department than in outpatient settings. While expense increases were largely driven by drug costs, the rate of that growth has significantly slowed.
This Health Capital Topics article reviews the report and the current state of hospital operations. (Read more…)
Avram Noam Chomsky is an American professor known for his traditional work in linguistics and political activism. Sometimes called “the father of modern linguistics”, Chomsky is also one of the founders of the field of cognitive science. He is a laureate professor of linguistics at the University of Arizona and an professor emeritus at MIT.
And so, modern linguists today approach their work with scientific rigor and perspective [STEM], although they use methods that were once thought to be solely an academic discipline of the humanities.
Contrary to this humanitarian belief, according to Professor Mackenzie Hope Marcinko PhD of the University of Delaware, linguistics is now multidisciplinary. It overlaps each of the human sciences including psychology, neurology, anthropology, and sociology. Linguists conduct formal studies of sound structure, grammar and meaning, but also investigate the history of language families, and research language acquisition.
An important concept for all medical professionals to understand is the current rate of return (CCR).
According to this principle, the current rate of a taxable return must be evaluated in reference to a similar non-taxable rate of return. This allows you to focus on your portfolio’s real (after-tax return), rather than its’ nominal, or stated return.
Now, since most medical professionals own a combination of both vehicles, it is important to calculate the average rate of return (ARR), as demonstrated in the following matrix. Usually, this will result in the assumption of more risk, for the possibility of great return.
To compare after tax yields, with taxable yields, use the following formulas:
Tax equivalent yield = yield / (1 – MTB), while taxable yield X (1-tax rate) = tax exempt yield.
Example: if the yield on a tax exempt municipal bond was 6%, and you are in a 28% tax bracket; the equivalent taxable yield (ETY), is 8.3%, calculated in the following manner: 06 / 1.00 – .28 =.083, or, 8.3% ETY. This means that you would need a taxable instrument paying almost 9 % to equal the 6 percent tax exempt bond.
Posted on March 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS
By Staff Reporters
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Intel (NASDAQ: INTC) just said today, that three members of its board of directors would be stepping down as the embattled chip maker reshapes itself under new Chief Executive Lip Bu-Tan.
Omar Ishrak, the former CEO of medical device maker Medtronic (MDT), University of California, Berkeley Dean Tsu-Jae King Liu and University of Pennsylvania professor Risa Lavizzo-Mourey are leaving Intel’s board, the company said in a filing.
For years, I thought of cryptocurrency as a digital replacement for traditional money. After all, Bitcoin has “coin” right in the name. But let’s be honest: if Bitcoin is a currency, then my mother’s old Beanie Baby collection is a retirement fund.
A real currency needs to be stable. It should allow you to buy a coffee today without wondering whether, by tomorrow, that same amount could buy a car—or be worth nothing at all. Bitcoin and its kin like Ethereum and Dogecoin fail this test spectacularly.
Recently I have realized that cryptocurrency might be something even bigger and stranger than currency. It is not just digital money; it’s a bet on the huge global demand for financial autonomy.
In an age where every dollar is tracked, crypto offers an escape from traditional financial oversight. That makes it attractive not just to cybercriminals and tax evaders, but also to privacy advocates, speculators, and people living under restrictive financial policies. It doesn’t replace traditional money, it sidesteps it. It allows people to move, store, create, and destroy wealth outside of conventional banking systems. Some use it for transactions. Others see it as a hedge against inflation or a bet on the future of decentralized finance. Governments and banks don’t quite know what to do with it.
Crypto exists in a financial gray zone. It’s not widely accepted for everyday purchases, yet it can hold immense value. Unlike cash, which is limited by geography, or gold, which requires secure storage, crypto can be transferred globally in seconds. That’s part of its appeal, especially in countries with strict capital controls or volatile economies.
At the heart of cryptocurrency’s identity is the way it is produced. Crypto isn’t just a speculative asset—it’s an industrialized wealth-creation system. Imagine a massive warehouse filled with powerful computers “manufacturing” cryptocurrency. These mining operations exist solely to create new “coins” and process transactions, consuming enormous amounts of electricity in the process. The larger the operation, the more crypto it produces.
This is not how traditional currencies work. Fiat currencies are managed by central banks aiming for economic stability. Crypto, by contrast, is controlled by a decentralized network of miners and participants [block-chain]. Its supply is fixed, immune to government intervention. Some see this as a weakness. Others argue it is crypto’s greatest strength.
As Bitcoin and other major cryptocurrencies become more integrated into mainstream finance, the risks evolve. Even as regulators warn about crypto’s role in illicit activity, major corporations and investment firms are offering crypto-backed products. Some politicians, including President Trump, are discussing national Bitcoin reserves. This growing legitimacy makes crypto harder to ignore. But if crypto-backed funds become widespread, a crash could ripple far beyond crypto traders. That said, crypto remains a small fraction of global finance. Unless institutional adoption grows significantly, even a major downturn likely wouldn’t trigger systemic collapse.
Crypto’s increasing presence in finance does not make it a sound retirement investment. It is still a speculation. And speculations—whether in Bitcoin, meme stocks, or dot-com startups—are high-risk and not suitable for long-term financial security. Retirement portfolios should be built on diversification, stability, and predictable returns. Crypto offers none of these.
For years, I saw crypto as a failed currency. What I now think it to be is a decentralized speculative asset, driven by a growing demand to bypass traditional financial systems. Its future remains uncertain. As regulation increases and mainstream adoption expands, its role will continue to shift. But crypto is no longer just a niche experiment. It has become a financial force that governments, institutions, and individuals must reckon with—whether they embrace it or try to control it.
*** Several years ago we noted that far too many mid-career, mature and physician clients using traditional stock brokers, management consultants and “financial advisors”, seemed to be less successful than those who went it alone. These Do-it-Yourselfers [DIYs] had setbacks and made mistakes, for sure. But, the ME Inc,. doctors seemed to learn from their mistakes and did not incur the high management and service fees demanded from general or retail one-size-fits-all “advisors.”
In fact, an informal inverse related relationship was noted, and dubbed the “Doctor Effect.” In other words, the more consultants an individual doctor retained; the less well they did in all disciplines of the financial planning, professional portfolio and investing continuum.
Of course, the reason for this discrepancy eluded many of them as Wall Street brokerages and wire-houses flooded the media with messages, infomercials, print, radio, TV, texts, tweets, and internet ads to the contrary. Rather than self-learn the basics, the prevailing sentiment seemed to purse the holy grail of finding the “perfect financial advisor.” This realization was a confirmation of the industry culture which seemed to be: Bread for the advisor – Crumbs for the client!
And so, we at the the Institute of Medical Business Advisors Inc. (iMBA), and this Medical Executive-Post, formed a cadre’ of technology focused and highly educated doctors, financial advisors, attorneys, accountants, psychologists and educational visionaries who decided there must be a better way for their healthcare colleagues to receive financial planning advice, products and related management services within a culture of fiduciary responsibility.
We trust you agree with this ME Inc philosophy as illustrated in this free white paper available upon request.
PROFESSIONAL PORTFOLIO CONSTRUCTION [Investing Assets and their Management] Subscribe, Read, Like and Refer
Email whiote paper request here:MarcinkoAdvisors@outlook.com
Without proper internal accounting controls, a medical practice [MD, DO, DPM, DDS, DMD] might never reach peak profitability. Internal controls designed and implemented by the physician-owner help prevent bad things from happening.
Embezzlement protection is the classic example. However, internal controls also help ensure good things happen most of the time; according to colleague Dr. Gary Bode; MSA, CPA.
Some Common Embezzlement “Old School” Schemes
Here are some ‘old-school” embezzlement schemes to avoid; however the list is imaginative and endless.
The physician-owner pocketing cash “off the books”. To the IRS, this is like embezzlement to intentionally defraud it out of tax money.
Employee’s pocketing cash from cash transactions. This is why you see cashiers following protocol that seems to take forever when you’re in the grocery check out line. This is also why you see signs offering a reward if he/she is not offered a receipt. This is partly why security cameras are installed.
Bookkeepers writing checks to themselves. This is easiest to do in flexible software programs like QuickBooks, Peachtree Accounting and related financial software. It is one of the hardest schemes to detect. The bookkeeper self-writes and cashes the check to their own name; and then the name on the check is changed in the software program to a vendor’s name. So a real check exists which looks legitimate on checking statements unless a picture of it is available.
Employees ordering personal items on practice credit cards.
Bookkeepers receiving patient checks and illegally depositing them in an unauthorized, pseudo practice checking account, set up by themselves in a bank different from yours. They then withdraw funds at will. If this scheme uses only a few patients, who are billed outside of the practice’s accounting software it is hard to detect. The doctor must have a good knowledge of existing patients to catch the ones “missing” from practice records. Monitoring the bookkeeper’s lifestyle might raise suspicion, but this scheme is generally low profile and protracted. Checking the accounting software “audit trail” shows the required original invoice deletions or credit memos in a less sophisticated version of this scheme.
Bookkeepers writing payroll checks to non-existent employees. This scheme works well in larger practices and medical clinics with high seasonal turnover of employees, and practices with multiple locations the podiatrist-owner doesn’t visit often.
Bookkeepers writing inflated checks to existing employees, vendors or subcontractors. Physician-owners should beware if romantic relationships between the bookkeeper and other practice related parties.
Bookkeepers writing checks to false vendors. This is another low profile, protracted scheme that exploits the podiatrists-owner’s indifference to accounts payable.
Assessment
Operating efficiency, safeguarding assets, compliance with existing laws and accuracy of financial transactions are common goals of internal managerial and cost accounting in medical practice.
CONCLUSION
Hopefully, the above is a good review to prevent common practice embezzlement schemes. Unfortunately, it is a never-ending endeavor.
References: Marcinko, DE: Dictionary of Health Economics and Finance. Springer Publishing Company, NY 2007.
During his first month in office, President Donald Trump’s administration has rolled out edicts calling for significant changes at a fast and furious pace, with a number of healthcare agencies and programs across the U.S. Department of Health & Human Services (HHS) targeted.
In an attempt to keep up with the latest actions of the legislative and executive branches of the federal government, this Health Capital Topics article summarizes recent events in Washington and the impact of these changes (both imminent and impending) on providers and patients. (Read more…)
A hostile takeover happens when an entity takes control of a company without the knowledge and against the wishes of the company’s management. A hostile takeover is an acquisition strategy requiring that the entity acquire and control more than 50% of the voting shares issued by the company.
In mergers and acquisitions (M&A), a hostile takeover is the acquisition of a target company by an acquiring company that goes directly to the target company’s shareholders, either by making a tender offer or through a proxy vote.
Ideally, an entity interested in acquiring a company should seek approval from the target company’s Board of Directors. The difference between a hostile and a friendly takeover is that, in a friendly takeover, the target company’s board of directors approve of the transaction and recommend shareholders vote in favor of the deal.
Defenses against a hostile takeover
These defense mechanisms can be preemptive or reactive, depending on how prepared the company is for the possibility of a hostile bid.
Poison pill is one of the most common defenses against a hostile takeover. Officially known as a “shareholder rights plan,” the poison pill allows existing shareholders to purchase additional shares at a discount, diluting the ownership interest of the acquiring company. The goal is to make it prohibitively expensive for the acquirer to complete the takeover.
A golden parachute is another defense strategy, which involves providing lucrative compensation packages (bonuses, severance pay, stock options, etc.) to key executives in the event they are terminated as a result of the takeover. This creates a financial disincentive for the acquiring company, as it would need to pay out these large sums upon completing the takeover.
In a Crown jewel defense, the target company sells or threatens to sell its most valuable assets—its “crown jewels”—if the takeover is completed. This reduces the attractiveness of the company to the acquirer, as the most desirable assets would no longer be part of the deal.
The Pac-Man defenses a more aggressive strategy in which the target company turns the tables by attempting to buy shares of the acquiring company, effectively launching a counter-takeover. While rare, this defense can deter hostile bids by making the takeover battle more costly and complex.
A White-Knight defense involves the target company seeking out a more favorable acquirer, or “white knight,” to make a friendly takeover bid. This allows the target company to avoid the hostile acquirer while still securing the benefits of a merger or acquisition.
The hostile takeover between Sanofi-Aventis and Genzyme Corp. occurred in 2010 when Sanofi, a French pharmaceutical company, wanted to buy Genzyme, a US biotech firm specializing in rare diseases. Genzyme resisted the offer, leading to conflict. Sanofi started a public campaign to pressure Genzyme’s shareholders into selling.
After months of negotiations, the two companies reached a deal in 2011. Sanofi agreed to pay $74 per share, with additional payments tied to Genzyme’s future performance, bringing the total deal value to around $20.1 billion. This acquisition allowed Sanofi to expand into the lucrative market for rare disease treatment.
Posted on March 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
ByJ. Chris Miller JD
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Your personal and financial life is constantly changing. Significant changes always necessitate the need to review your life. However, a few key events trigger the need to review your estate plan. If any of the events below have occurred since you reviewed your estate plan, see a competent adviser to help you achieve your goals.
Birth of a child or grandchild.
Death of a spouse, beneficiary, guardian, trustee or personal representative.
Marriage of you or your children.
Divorce. (Review beneficiary designations and asset titling)
Move out of state. An estate is settled under the laws of the state in which the decedent resided. Certain provisions of a will that are valid in one state may not be in another.
Change in estate value. A large increase or decrease in the size of an estate may greatly affect some of the strategies that were implemented.
Changes in business. Starting, buying or selling a medical practice or other business has an impact on your estate. The addition or death of a business owner will cause a review.
Tax law changes. EGTRRA has dramatically changed the way we plan for estate taxes. It is important to note that only planning for estate taxes has been effected. Estate planning involves much more than just the motivation to reduce or eliminate taxes. Assuring that your family is financially taken care of, that children have the opportunity to go to college, that your debts are paid, that charitable desires are achieved, provisions for a needy child, proper selection of a guardian, the list goes on. Please do not use the new law as an excuse to not plan your estate.
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OVERHEARD IN THE FINANCIAL ADVISOR’S LOUNGE
From my perspective, estate planning is a team sport, and lawyers rely on financial advisers all the time to spot issues for clients. We do not share the opinion that non-lawyers are incapable of giving good advice.
The recent horrifying murder of UnitedHealthcare Group CEO Brian Thompson has called attention to the anger many Americans feel about our health care system. This tragedy has thrust the very real issue of health care costs back into the headlines.
One article on the topic, from Ken Alltucker for USA Today, offered seven reasons why Americans pay so much for health care with such poor results. When I saw the headline, I thought, “Finally, someone’s going to bring up the elephant in the room: taxes.”
The seven reasons included bloated administrative costs, lack of price transparency, overpaid specialists, higher prescription drug prices, and more. But I didn’t see a word about how, compared to other developed nations with “cheaper” health care, Americans pay far lower taxes. That omission feels like leaving a critical piece of the puzzle off the table.
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In reality, countries with universal health care are not pulling off some magic trick of efficiency. They are simply collecting the money differently—through significantly higher taxes. Americans, on the other hand, pay for health care more directly, through out-of-pocket costs and insurance premiums.
In a column last year, I did the math. Americans spend about 17.8% of GDP on health care, plus 27.7% of GDP in taxes. That’s a total of 45.5%. Now compare that to twelve European countries with universal health care. They spend a median of 11.5% of GDP on health care and collect 41.9% of GDP in taxes. Total? 53.4%. In other words, Americans are spending 7.9% less overall on healthcare and taxes combined.
The saving isn’t what it appears, though. A fair comparison of healthcare costs and taxes needs to account for the fact that universal healthcare systems cover 100% of their populations, while the U.S. system currently leaves about 8% uninsured. If you factor in the cost of covering our uninsured residents, the U.S. likely spends a comparable percentage of income on healthcare as European countries with universal systems.
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Our system is far from perfect. As the USA Todayarticle points out, administrative costs are bloated. Harvard’s David Cutler estimates up to 25% of our health spending goes toward paperwork, phone calls, and processing. Price transparency is practically nonexistent. The cost of a diagnostic test might vary from $300 to $3,000 depending on where you go. We pay much more for prescription drugs and many procedures than those same treatments cost in other developed nations. Another issue is the fee-for-service model that rewards doctors for ordering more tests and procedures, whether or not patients get better.
We can do better. Innovations like value-based care, where providers are paid for outcomes rather than procedures, could help shift the system toward real results. Greater price transparency would empower patients to make informed choices and force providers to compete. And addressing administrative inefficiencies could save billions.
Yet fixing the system requires being honest about trade-offs. If we want universal health care at European price rates, we need to accept European tax rates. That’s the part of the conversation that often gets left out. It’s easy to be angry at hospitals, insurance companies, and drug manufacturers—and yes, they all have plenty to answer for. But we also need to face the reality that we’ve chosen a system that prioritizes lower taxes over centralized health care.
Anger may have put the flaws in our health care system in the spotlight. Finding genuine solutions will require moving beyond expressions of anger and frustration. It will demand thoughtful discussions about what kind of health care system, as individuals and as a nation, that we want and how we are willing to fund it.
Absolute Return – the goal is to have a positive return, regardless of market direction. An absolute return strategy is not managed relative to a market index.
Accredited Investor – wealthy individual or well-capitalized institutions covered under Regulation D of the Securities Act of 1933.
Alpha – the return to a portfolio over and above that of an appropriate benchmark portfolio (the manager’s “value added”).
Arbitrage – any strategy that invests long in an asset, and short in a related asset, hoping the prices will converge.
Attribution – the process of “attributing” returns to their sources. For example, did the returns to a portfolio (over and above some benchmark) come from stock selection, industry/sector over- or under-weighting or factor weighting. Software programs are helpful in reporting an attribution.
Beta – a measure of systematic (i.e., non-diversifiable) risk. The goal is to quantify how much systematic risk is being taken by the fund manager vis-à-vis different risk factors, so that one can estimate the alpha or value-added on a risk-adjusted basis.
Correlation – a measure of how strategy returns move with one another, in a range of –1 to +1. A correlation of –1 implies that the strategies move in opposite directions. In constructing a portfolio of hedge funds, one usually wants to combine a number of non-correlated strategies (with decent expected returns) to be well diversified.
Drawdown – the percentage loss from a fund’s highest value to its lowest, over a particular time frame. A fund’s “maximum drawdown” is often looked at as a measure of potential risk.
Hurdle Rate – the return where the manager begins to earn incentive fees. If the hurdle rate is 5% and the fund earns 15% for the year, then incentive fees are applied to the 10% difference.
Leverage – one uses leverage if he borrows money to increase his position in a security. If one uses leverage and makes good investment decisions, leverage can magnify the gain. However, it can also magnify a loss.
Opportunistic – a general term that describes an aggressive strategy with a goal of making money (as opposed to holding on to the money one already has).
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Pairs Trading – usually refers to a long/short strategy where one stock is bought long, and a similar stock is sold short, often within the same industry. Buying the stock of Home Depot and shorting Lowe’s in an equal amount would be an example.
Portfolio Simulation – involves testing an investment strategy by “simulating” it with a database and analytic software. Often referred to as “backtesting” a strategy. The simulated returns of the strategy are compared to those of a benchmark over a specific time frame to see if it can beat that benchmark.
Sharpe Ratio – a measure of risk-adjusted return, computed by dividing a fund’s return over the risk-free rate by the standard deviation of returns. The idea is to understand how much risk was undertaken to generate the alpha.
Short Rebate – if you borrow stock and then sell it short, you have cash in your account. The short rebate is the interest earned on that cash.
R-Squared – a measure of how closely a portfolio’s performance varies with the performance of a benchmark, and thus a measure of what portion of its performance can be explained by the performance of the overall market or index. Hedge fund investors want to know how much performance can be explained by market exposure versus manager skill.
Transportable Alpha – the alpha of one active strategy can be combined with another asset class. For example, an equity market-neutral strategy’s value-added can be “transported” to a fixed income asset class by simply buying a fixed income futures contract. The total return comes from both sources.
Value at Risk – a technique which uses the statistical analysis of historical market trends and volatilities to estimate the likelihood that a specific portfolio’s losses will exceed a certain amount.
Posted on March 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
Beware – Public Improvement Fees
Beware – Public Improvement Districts
By Staff Reporters
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A Public Improvement Fee (PIF) is a fee that developers may require their tenants to collect on sales transactions to pay for on-site improvements. The PIF is a fee and NOT a tax; therefore, it becomes a part of the overall cost of the sale/service and is subject to sales tax
Examples of these improvements include curbs and sidewalks, parking facilities, storm management system, sanitary sewer systems, road development (within the site) and outdoor public plazas.
Public Improvement Districts (PIDs) are a financing mechanism used to fund new developments and infrastructure improvements. PIDs are relatively easy to create and can be done by the local municipality. A majority of property owners within the district may petition a local government to create the district. Bonds can then be issued to fund a development or infrastructure improvements. Through an industry analysis and view of the current political environment, PIDs are certainly a beneficial mechanism to fund projects otherwise not feasible due to constraints on city budgets. Local elected officials will want PIDs monitored and only used in proper circumstances.
Posted on March 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Health Capital Consultants, LLC
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The term “value” has many different meanings and definitions to different parties. Therefore, at the outset of each valuation engagement, it is critical to define appropriately (and have all parties agree to) the standard of value to be employed in developing the valuation opinion.
The standard of value defines the type of value to be determined and answers the question “value to whom?” There are several standards of value that may be sought, including: Fair Market Value (FMV), Fair Value, Investment Value, and Liquidation Value. (Read more...)
“Malta has quietly leveraged the rising tide of the financial transparency imperative to attract hedge funds.“
There was a time when the quaint island sought to play on the traditional terrain, offering anonymity and a “laissez-faire regulatory regime,” not to mention very low taxes, as in no capital gains taxes and no taxes on dividends; all while English speaking and USD currency denominated.
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While many leading domiciles for offshore hedge funds remain in the Caribbean – notably the Cayman Islands, the British Virgin Islands, Bermuda, and the Bahamas – the island of Malta is drawing attention, especially from European funds.
SO – HOW MUCH IS A “FINANCIAL ADVISOR” REALLY WORTH?
This blog holds a rather uncomplimentary opinion of financial advisors, and the financial services and brokerage industry as a whole; deserved, or not? The entire site hints at this attitude as well, in favor of a going it alone or ME, Inc investing when possible. Nevertheless, it is reasonable to wonder how much boost in net-returns might an educated and informed, fee transparent and honest, fiduciary focused “financial advisor” add to a clients’ investment portfolio; all things being equal [ceteris paribus].
And, can it be quantified?
Well, according to Vanguard Brokerage Services®, perhaps as much as 3%? In a decade long paper from the Valley Forge, PA based mutual fund and ETF giant, Vanguard said financial advisors can generate returns through a framework focused on five wealth management principles:
• Being an effective behavioral coach: Helping clients maintain a long-term perspective and a disciplined approach is arguably one of the most important elements of financial advice. (Potential value added: up to 1.50%).
• Applying an asset location strategy: The allocation of assets between taxable and tax-advantaged accounts is one tool an advisor can employ that can add value each year. (Potential value added: from 0% to 0.75%).
• Employing cost-effective investments: This component of every advisor’s tool kit is based on simple math: Gross return less costs equals net return. (Potential value added: up to 0.45%).
• Maintaining the proper allocation through rebalancing: Over time, as investments produce various returns, a portfolio will likely drift from its target allocation. An advisor can add value by ensuring the portfolio’s risk/return characteristics stay consistent with a client’s preferences. (Potential value added: up to 0.35%).
• Implementing a spending strategy: As the retiree population grows, an advisor can help clients make important decisions about how to spend from their portfolios. (Potential value added: up to 0.70%).
Source: Financial Advisor Magazine, page 20, April 2014.
Assessment
However, Vanguard notes that while it’s possible all of these principles could add up to 3% in net returns for clients, it’s more likely to be an intermittent number than an annual one because some of the best opportunities to add value happen during extreme market lows and highs when angst or giddiness [fear and greed] can cause investors to bail on their well-thought-out investment plans.
And, is the study applicable to doctors and allied healthcare providers? Doe Vanguard have a vested interest in the topic. What about fee based versus fee-only financial advice?
Conclusion
Finally, recognize the plethora of other financial planning life-cycle topics addressed in this ME-P were not included in the Vanguard investment portfolio-only study a decade ago.
And what about today with contemporaneous internet advising, chat-rooms, linkedin, robo-advisors, reddit and the like?
Posted on March 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
The Power of Attorney Mistake That Could Cost You Everything
By Rick Kahler CFP®
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Recently, reading a training manual on elder abuse, I was reminded of a financial risk that is often overlooked. One of the fastest and easiest ways to unravel your financial security is to have the wrong person gain control of your money.
The example in the manual mirrored a heartbreaking situation I once experienced with a long-term client. As her mental and physical health declined, this single woman moved into assisted living. Her newly designated power of attorney, a relative from out of town, took control of her financial affairs.
Almost immediately, without consulting us, the relative began making large withdrawals, closed her accounts, and transferred funds elsewhere. They challenged the financial plan, investments, and strategies we had established to safeguard the client’s financial security and provide for her long-term care. Even though their actions threatened the client’s wellbeing, we were powerless to stop them. Our only recourse was to report the behavior to the authorities.
This heartbreaking and frustrating experience underscored just how critical it is to be mindful when executing a Power of Attorney. Besides designating someone you trust, it is wise to build in safeguards to prevent even a well-meaning relative from inadvertently derailing a carefully constructed financial plan.
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One such safeguard is to include a financial advisor in your POA—as long as that person is a fee-only, fiduciary advisor with an obligation to act in your best interests. In many cases, advisors are hesitant to suggest this option because they are sensitive to the potential conflict of interest and do not want to appear self-serving. An unfortunate reality is that you should be cautious if an advisor, particularly one who sells products on commission, seems eager to be added to your POA.
Including your financial advisor in your POA does not mean you designate them as your agent to manage your affairs. Instead, you include a clause naming them as the professional of record you want your designated agent to continue working with. This creates continuity and accountability. It prevents your agent from replacing your advisor with someone who may be unfamiliar with your needs and goals, unqualified, or untrustworthy.
Your advisor might also recommend adding a secondary safeguard, such as naming an attorney or accountant to oversee the selection of a successor advisor in case your current advisor is unable to continue. This additional layer of protection ensures that the financial professionals guiding your portfolio remain aligned with your best interests. Taking these extra steps can save you—and your loved ones—from significant financial stress down the road.
Including safeguards in your POA is not about mistrusting your loved ones, but about equipping them with the right resources and support to act in your best interest. Financial management is complex, and it requires expertise that most people, even those with the best intentions, may not possess.
One of the hardest parts about planning for diminished financial capacity is the emotional aspect. No one likes to imagine a time when they might not be able to manage their own money. But in reality, taking steps now to protect your financial future is the ultimate act of control. It can help ensure that your wishes are respected and the financial foundation you’ve worked so hard to build remains intact.
Remember, too, that avoiding conversations often increases financial vulnerability. If you don’t have a POA or aren’t comfortable with what you do have, now is the time to bring it up with your advisor, attorney, or a trusted family member. These safeguards are about protecting yourself. They also support those you will rely on to care for you and your financial legacy,
Health actuaries analyze potential risks, profits and trends that will affect their employers, which are often in the health insurance, government health services and medical provider industries. They advise companies on issuing policies to consumers based on risks, calculated premiums and upcoming changes in health-care costs.
It’s common for an actuary to have a bachelor’s degree or higher in actuary studies, mathematics or statistics. Coursework on medical terminology and hierarchy of the medical field is also beneficial. In addition to academic education, certification is also necessary to reach “professional status,” which is required by most employers.
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The professional organization, Society of Actuaries, certifies actuaries in the health and medical field. Their statistical work is commonly done with predictive tables, probability tables and life tables that are created on customized statistical analysis software such as Stata or XLSTAT.
The actuary field as a whole is growing faster than other fields, according to the Bureau of Labor Statistics [BLS]. In 2020, it expanded by 27 percent. The average annual salary for an actuary in 2010 was $87,650. More specifically, in the health insurance field, the salary was slightly higher at $91,000.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Posted on March 16, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Vitaliy Katsenelson CFA
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Today, I’m going to share stories about my best and worst investment decisions. But don’t worry, this isn’t just a brag-and-cringe session about making or losing money. These stories are about the valuable lessons learned, and how these adventures in investing helped shape my current approach.
The Best Investment Decision
In investing, you don’t get extra points for creativity or difficulty. A million dollars earned while you are smiling buys as many potatoes as a million dollars that cost you your marriage and hair.
However, from a personal, creative satisfaction perspective, our investment in Uber was one of our best. That’s not to say that it has been the most successful decision from a financial perspective, at least not yet.
Uber doesn’t fit into the traditional value stock category. Until 2023, the third year of our ownership, it never made money. It was a stock everyone hated. After we bought it, I had clients reach out to me asking if I had been kidnapped and someone else was making these purchases of Uber.
We bought more shares very opportunistically during and after the pandemic. I wrote a long research report on it, which you can read here.
On one hand, Uber’s switchboard is a digital business, but the company also has a physical presence in thousands of cities, which incurs costs (the analog side of the business). Additionally, the availability of cheap money caused the ride-share market to go crazy and act rationally irrational, as competitors jostled in a land grab.
My thesis consisted of several insights:
Unlike traditional-tech, digital-only companies, Uber is a hybrid, both digital and analog. Thus, its cost structure is much higher than that of other companies. This, in part, explains the higher losses.
It has a strong brand; its name has become a verb.
The rideshare market is inevitable and will only continue to grow. Uber is not just in competition with taxis, second cars, or seldomly used cars; it is also in competition with the favors we ask of friends and relatives, such as dropping us off at the mechanic or picking us up from the doctor’s office.
Uber has global scale, which its competitors lack, allowing it to spread R&D across more markets.
As its revenue grows, each incremental dollar comes with a very high margin, which directly drops to the bottom line. Therefore, at some point, its earnings will explode to the upside as fixed costs stop growing, allowing it to scale.
The Uber story is not over; we still own the stock. I don’t want to do a celebratory dance. But this idea came with a lot of creative satisfaction. There is another point of pride here. Despite our very tumultuous ownership of this stock, we remained rational (I have written about that here). We bought more when it became extremely undervalued, and I would be lying if I said that was psychologically easy – it was not, but we followed our research and process.
The Worst Investment Decision
My worst investments that resulted in losses had several things in common: They were low-quality companies; their financials were complex and not transparent (for instance, one-time items were labeled as “one-time” every quarter); and they had questionable management.
However, they were all considered “cheap”… until they were not. Now, I hope you see why I am dogmatic about quality.
However.
When you are wrong on an investment and you lose money, the most you can lose is 100%. I have learned a lot from those. But they were not my worst investments. Those were the ones where I left 300–400% on the table when I sold too soon. Let me detail two examples.
EA – Electronic Arts
We bought EA in the early 2010s. I wrote about it – you can read my investment case for it here. To sum up, games were moving from being sold in stores to being digital downloads, which would lead to higher margins (don’t have to pay for packaging and Best Buy to sell them). The market for games was exploding, as every adult and teenager had a gaming device in their hands – a smartphone. The market for video games was going to be much larger. EA was the largest player in that space, with great franchises.
The following two years of ownership were very painful. EA had a few big game flops, and the market did not care about improving fundamentals. The stock kept declining. We continued to buy more. Every time we bought more shares, the stock fell further. Fast-forward a year or two. The stock doubled from our original purchase, but I was mentally exhausted. I did a celebratory dance and sold the stock. The stock then went up another 4x within a few years after we sold it. It went up for the right reasons – its earnings exploded to the upside, in line with my original thesis.
The sale was a mistake, not because the price went up but because I let frustration over the stock-price decline (volatility) get to me. Investing is a mental game. I learned from this adventure that it is important to zoom out and not obsess over individual stocks in the portfolio. This is why we have a portfolio. It was a very costly but educational mistake. Our ownership of Uber was not a walk in the park, either – just look at the stock price over the last few years. But I had learned my lesson from EA and was able to do the analysis, update our model, and zoom out.
In investing, there is a big difference between intellectual and tactile knowledge. I am going to go PG-13 on you for a second and quote the irascible Charlie Munger: “Learning about investing through a model portfolio is like learning about sex through romantic novels.” A big part of investing is observing yourself as an investor – your thoughts and emotions as you ride the actual rollercoaster of owning a stock.
I also made an important modification to our process.
We always value every company in the portfolio on earnings (free cash flows) at least four years out. Why four years? Three seems too short. There is no magic in this number, other than it being longer than most analyst estimates. We do this for all stocks in the portfolio, and then the total return for each is calculated and annualized. If a company has strong growth potential, it may appear to be expensive based on current earnings; but in reality, it may actually be cheap based on earnings projected four years from now.
On the other side of the spectrum, a company that has no growth or dividends may seem “cheap” based on its current earnings multiple, but this cheapness may quickly dissipate once a total return is calculated using future earnings. Time is on the side of growing businesses and the enemy of the ones that stand still. Therefore, a non-growing or slow-growing business needs a much greater discount (margin of safety) to secure a spot in our portfolio.
I want to stress another point. We sometimes sell a stock and then it goes higher. If we sold it for the right fundamental reasons, this doesn’t bother me. There is very little to learn.
Twilio
I’ll give you another crazy example. We bought Twilio at $25 in 2017 or so. Our thesis was that they had built the largest digital telecommunications network, which gave them a brief competitive advantage. They were also spending 5x more on R&D than competitors to build applications around this network, which would give them long-term advantages.
The stock price went up to $60 in a few months without anything significantly changing, so we sold a third of our position. Then it went up to $90, and we sold some more. To our disbelief, we sold the rest at around $120, a bit before the pandemic.
During the pandemic, Twilio’s price hit $400. I had zero regret about not holding on to the shares. Absolutely none. Twilio’s profitability did not match the stock market’s opinion of its price. Twilio’s stock price was as crazy to me at $250 as it was at $300 or $400. After reviewing our models, we concluded that even $120 was at the extreme end of our optimistic assumptions. Fast-forward to today, where the stock is at $60 or so. We are currently sharpening our pencils, but we have not bought the stock – yet.
Selling EA was a mistake; selling Twilio was not.
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Key takeaways
My “best investment decision” with Uber wasn’t just about financial gains, but the creative satisfaction it brought. It taught me the value of sticking to our research and process, even when it’s psychologically challenging.
The worst investments often share common traits: low-quality companies, complex financials, questionable management, and the illusion of being “cheap.” This reinforces my dogmatic stance on prioritizing quality.
Sometimes, the costliest mistakes aren’t the ones where you lose money, but those where you leave significant gains on the table by selling too soon. My experience with EA taught me this lesson the hard way.
There’s a crucial difference between intellectual and tactile knowledge in investing. Actually owning stocks and experiencing the emotional roller coaster is invaluable for developing as an investor.
Selling a stock that later increases in value isn’t always a mistake if the decision was based on sound fundamental reasons. My experience with Twilio illustrates this point – sometimes it’s right to sell even if the price continues to climb.
NOTE:Please read the following important disclosure here.
In the United States, the difference between a Ph.D and a Sc.D is that the former is awarded to most, if not all, disciplines, while a Sc.D is awarded to science or STEM (science, technology, engineering, mathematics) disciplines.
This means that, in the United States at least, a Ph.D and a Sc.D are equal to one another in terms of telling people about an individual’s mastery of a particular skill, training, and prestige. A Ph.D holder and a Sc.D holder are viewed as peers and equals by most, if not all, American universities.
Meanwhile in Europe, according to Emily Summer, the difference between a Ph.D and a Sc.D is that the former is awarded at the start of an academic career, while the Sc.D is awarded much later, after the individual has built up an impressive body of work.
Posted on March 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS
By Staff Reporters
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The Consumer Price Index (CPI) for February found that the cost of goods and services rose 0.2% on the month. The annual rate of inflation was also up 2.8% — slightly less than expected.
Here’s a breakdown of several price changes for February:
Food: increase 0.2%
Energy: increase 0.2%
Electricity: increase 1.0%
New vehicles: decrease 0.1%
Used vehicles: increase 0.9%
Apparel: increase 0.6%
Shelter: increase 0.3%
Transportation: decrease 0.8%
Medical care services: increase 0.3%
The Bureau of Labor Statistics reported that according to its indexes, over the month the cost of medical care rose 0.3%, physicians’ services were 0.4% higher, hospital services added 0.1%, and prescription-drug costs were unchanged.
Posted on March 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
Over Heard in the Doctor’s Lounge
By Staff Reporters
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Statistics is a discipline that deals with data, facts, and figures from which meaningful information is inferred. It involves gathering, summarizing, and analyzing data to understand trends and patterns. Statistics can be divided into two main types: descriptive statistics, which summarize data, and inferential statistics, which make predictions or inferences about a population based on a sample
But, reading statistical income information can be full of pitfalls. One needs to look at the mean and median. Both give useful information. By comparing the two, one can ascertain if there are outliers that affect the results.
Example:
If a sample of 10 physicians has one earning $1,000,000 and the other nine earning $100,000, the average (mean) income is $190,000; but the median income is $100,000.
Just using this information alone, one can tell there are some outliers that could affect the results.
–Dr. Edmond F. Mertzenich, DPM MBA [Rockford, IL]
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Example:
“Lies, damned lies, and statistics” is a phrase describing the persuasive power of statistics to bolster weak arguments, “one of the best, and best-known” critiques of applied statistics. It is also sometimes colloquially used to doubt statistics used to prove an opponent’s point.
Posted on March 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEdCMP®
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Your Executor or personal representative is named in your Will and is responsible for management of assets subject to probate. A basic checklist of the duties of the personal representative looks like this:
Gather all estate assets;
Collect all amounts owed the decedent;
Notify creditors and paying all valid debts;
Selling assets as needed to pay expenses or as directed by the Will;
Distribute assets to beneficiaries;
File decedents final federal income tax return;
File an estate tax return if the estate is large enough; and
File inventories and annual returns with the probate court, if required.
The position requires a lot of responsibility and involves many duties and a considerable commitment of time. The personal representative must petition the probate court for formal appointment.
Selection of your personal representative should not be made lightly, or as a favor to a friend. It requires a lot of work and very often for little or no pay. Friends and family typically will not charge the estate for their time and work. Outside advisers like attorneys and accountants will not hesitate to bill for their work effort. A few items for your selection criteria should be:
Longevity – the person should have a likelihood of being able to serve after your death;
Skill in managing legal and financial affairs;
Familiarity with your estate and wishes;
Integrity and loyalty; and
Impartiality and absence of conflicts of interest.
Alternatives to family or friends might be a corporate executor, such as a bank, an attorney, or other adviser. Similar criteria should be used in the selection of a trustee.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Wikipedia suggests that Rhetoric is the art of persuasion . It is one of the three ancient arts of discourse (trivium) along with grammar and logic/dialectic.
As an academic discipline within the humanities, rhetoric aims to study the techniques that speakers or writers use to inform, persuade, and motivate their audiences.
And, according to Professor Mackenzie Hope Marcinko PhD, rhetoric also provides heuristics for understanding, discovering, and developing arguments for particular situations.
Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BEHAVIORAL ECONOMICS
By Staff Reporters
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Prospect theory is a psychological and behavioral economics theory developed by Daniel Kahneman and Amos Tversky in 1979. It explains how people make decisions when faced with alternatives involving risk, probability, and uncertainty. According to this theory, decisions are influenced by perceived losses or gains.
Example:
Amanda, a DO client, was just informed by her financial advisor that she needed to re-launch her 403-b retirement plan. Since she was leery about investing, she quietly wondered why she couldn’t DIY. Little does her FA know that she doesn’t intend to follow his advice, anyway! So, what went wrong?
The answer may be that her advisor didn’t deploy a behavioral economics framework to support her decision-making. One such framework is the “prospect theory” model that boils client decision-making into a “three step heuristic.”
Prospect theory makes the unspoken biases that we all have more explicit. By identifying all the background assumptions and preferences that clients [patients] bring to the office, decision-making can be crafted so that everyone [family, doctor and patient] or [FA, client and spouse] is on the same page. Briefly, the three steps are:
1. Simplify choices by focusing on the key differences between investment [treatment] options such as stock, bonds, cash, and index funds.
2. Understanding that clients [patients] prefer greater certainty when it comes to pursuing financial [health] gains and are willing to accept uncertainty when trying to avoid a loss [illness].
3. Cognitive processes lead clients and patients to overestimate the value of their choices thanks to survivor bias, cognitive dissonance, appeals to authority and hindsight biases.
Assessment
Much like healthcare today, the current mass-customized approaches to the financial services industry falls short of recognizing more personalized advisory approaches like prospect theory and assisted client-centered investment decision-making.
Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters and IRS
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Straddles: A straddle is any set of offsetting positions on personal property. For example, a straddle may consist of a purchased option to buy and a purchased option to sell on the same number of shares of the security, with the same exercise price and period.
Personal property.
This is any actively traded property. It includes stock options and contracts to buy stock but generally does not include stock.
Straddle rules for stock.
Although stock is generally excluded from the definition of personal property when applying the straddle rules, it is included in the following two situations.
The stock is of a type that is actively traded, and at least one of the offsetting positions is a position on that stock or substantially similar or related property.
The stock is in a corporation formed or availed of to take positions in personal property that offset positions taken by any shareholder.
Note
For positions established before October 22, 2004, condition 1 above does not apply. Instead, personal property includes stock if condition 2 above applies or the stock was part of a straddle in which at least one of the offsetting positions was:
An option to buy or sell the stock or substantially identical stock or securities,
A securities futures contract on the stock or substantially identical stock or securities, or
A position on substantially similar or related property (other than stock).
Position
A position is an interest in personal property. A position can be a forward or futures contract or an option.
An interest in a loan denominated in a foreign currency is treated as a position in that currency. For the straddle rules, foreign currency for which there is an active inter bank market is considered to be actively traded personal property.
Offsetting position
This is a position that substantially reduces any risk of loss you may have from holding another position. However, if a position is part of a straddle that is not an identified straddle, do not treat it as offsetting to a position that is part of an identified straddle.
Presumed offsetting positions
Two or more positions will be presumed to be offsetting if:
The positions are established in the same personal property (or in a contract for this property), and the value of one or more positions varies inversely with the value of one or more of the other positions;
The positions are in the same personal property, even if this property is in a substantially changed form, and the positions’ values vary inversely as described in the first condition;
The positions are in debt instruments with a similar maturity, and the positions’ values vary inversely as described in the first condition;
The positions are sold or marketed as offsetting positions, whether or not the positions are called a straddle, spread, butterfly, or any similar name; or
The aggregate margin requirement for the positions is lower than the sum of the margin requirements for each position if held separately.
Related persons
To determine if two or more positions are offsetting, you will be treated as holding any position your spouse holds during the same period. If you take into account part or all of the gain or loss for a position held by a flow-through entity, such as a partnership or trust, you are also considered to hold that position.
Posted on March 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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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.
Stocks inched up overnight after Monday’s ugly plunge to six-month lows, but positive catalysts were scattered and the rocky economy has begun affecting earnings forecasts. Delta Airlines (DAL) lowered its outlook yesterday amid what it called “macro uncertainty,” raising concerns it could be first on a crowded runway.
One theme as stocks plunged recently was that despite the suffering was that earnings outlooks remained strong. The latest FactSet forecasts for first quarter and 2025 S&P 500 earnings growth are 7.3% and 11.6%, respectively. Both are down from December 31st, though, and further setbacks in expectations could hurt confidence. Oracle (ORCL) missed analysts’ estimates late Monday. “The longer the tariff turmoil and related uncertainty about trade policy lasts, the more likely economic and earnings growth may take a hit,” said Jeffrey Kleintop, chief global investment strategist at Schwab.
Job openings data later yesterday morning and the Consumer Price Index (CPI) tomorrow could help set the tone, though economic growth seems to have replaced inflation as the prime concern. Yesterday’s steep losses reflected less confidence in either the administration or the Federal Reserve potentially stepping in to rescue a slumping economy. Growth fears have pummeled the Magnificent Seven, with six of them among the bottom 350 in S&P 500 index (SPX) year-to-date performance.
For now, the S&P 500 (^GSPC) avoided correction territory but still fell about 0.8% to trade at just under 5,600. The Dow Jones Industrial Average (^DJI) shed roughly 500 points, or 1.1%, dragged down by shares of Verizon (VZ). The tech-heavy NASDAQ Composite (^IXIC) reversed gains in the last few minutes of trading to fall about 0.2%. All three indexes closed at their lowest levels since September.
Visualize: How private equity tangled banks in a web of debt, from the Financial Times.
If you have ever filed a homeowners insurance claim, you know it can feel more like an endurance test than a straightforward process. While insurers are legally required to honor valid claims, they have strong financial incentives to delay, underpay, or deny them whenever possible.
Over the years, I’ve learned this the hard way. The most recent lesson started when a hailstorm hit my home in June 2023. I promptly filed an insurance claim. I also made up a story that leaving someone more qualified than me in charge would free me from a part-time job as a contractor, so I relied on a roofing contractor to handle the whole claim, including the gutter and siding damage. That was my first mistake.
About 15 months later, my roof and gutters were replaced, but the siding repairs and painting remained undone. Every time the insurance company reassigned my claim to a new adjuster, I had to start over. When I called the contractor after a period of inactivity, they said the adjuster had ghosted them, so they’d given up—and I still owed them the full roofing bill.
At that point, I had two choices: pay out of pocket for the unfinished work or escalate. I chose the latter. I filed a complaint with the state insurance division, contacted my agent, reached out to the last adjuster, hired my own painter, and withheld final payment to the contractor. I also made it clear that I was prepared to take legal action if necessary. That was not a bluff.
Within a week, things started moving. Seven days later, the insurance company reinspected my home and sent a check covering all but $3,000 of the painting costs. After nearly two years of delays and excuses, progress finally happened when I took matters into my own hands.
Delay is a common insurer tactic. They’ll repeatedly ask for more documentation, take months to respond, or swap adjusters to force you to restart the process—all in hopes that you’ll give up or accept a lower payout.
Another common tactic is the lowball offer. Insurers often rely on software that underestimates damages or send adjusters unfamiliar with actual repair costs. Accepting their first offer without question can be a costly mistake. It’s wise to get independent repair estimates or even hire a public adjuster who works for you rather than the insurance company.
Insurers also deny claims based on fine print, arguing that damage was pre-existing, caused by poor maintenance, or excluded under some obscure clause. Knowing your policy inside out and keeping pre-loss photos can help you counter these claims.
Another trick? Steering homeowners toward “preferred” contractors who work at discounted rates and may prioritize the insurer’s interests over yours. Getting independent estimates ensures repairs are done properly.
For homeowners stuck in an insurance battle, persistence is key. Withholding final payment until work is complete, filing a complaint with the state insurance division, and even considering small claims court can help push a claim forward. If the dispute is within your state’s small claims limit—often between $10,000 and $25,000—filing may push the insurer to settle.
Assuming my contractor would handle everything was my biggest mistake, and it cost me nearly two years of frustration. Even though progress happened quickly once I took control, my claim isn’t over. I suspect I will be filing legal action in small claims court against the insurance company, contractor, and insurance agent.
If you need to navigate an insurance claim, be persistent and attentive. Keeping records, pushing back on delays, and escalating when necessary can mean the difference between being shortchanged and getting the settlement you deserve.
I was having lunch with a close friend of mine. He mentioned that he had accumulated a significant sum of money and did not know what to do with it. It was sitting in bonds, and inflation was eating its purchasing power at a very rapid rate.
He is a dentist and had originally thought about expanding his business, but a shortage of labor and surging wages turned expanding into a risky and low-return investment. He complained that the stock market was extremely expensive. I agreed.*
He said that the only thing left was residential real estate. I pushed back. “What do you think will happen to the affordability of houses if – and most likely when – interest rates go up? Inflation is now 6%. I don’t know where it will be in a year or two, but what if it becomes a staple of the economy? Interest rates will not be where they are today. Even at 5% interest rates [I know, a number unimaginable today] houses become unaffordable to a significant portion of the population. Yes, borrowers’ incomes will be higher in nominal terms, but the impact of the doubling of interest rates on the cost of mortgages will be devastating to affordability.”
He rejoined, “But look at what happened to housing over the last twenty years. Housing prices have consistently increased, even despite the financial crisis.”
I agreed, but I qualified his statement: “Over the past twenty, actually thirty, years interest rates declined. I honestly don’t know where interest rates will be in the future. But probabilistically, knowing what we know now, the chances that they are going to be higher, much higher, are more likely than their staying low. Especially if you think that inflation will persist.”
We quickly shifted our conversation toward more meaningful topics, like kids.
It seems that every year I think we have finally reached the peak of crazy, only to be proven wrong the next year. The stock market and thus index funds, just like real estate, have only gone one way – up. Index funds became the blunt instrument of choice in an always-rising market. So far, this choice has paid off nicely.
The market is the most expensive it has ever been, and thus future returns of the market and index funds will be unexciting. (I am being gentle here.)
You don’t have to be a stock market junkie to notice the pervasive feeling of euphoria. But euphoria is a temporary, not a permanent emotion; and at least when it comes to the stock market, it is usually supplanted by despair. Market appreciation that was driven by expanding valuations was not a gift but a loan – the type of loan that must always be paid back with a high rate of interest.
I don’t know what straw will break the feeble back of this market or what will cause the music to stop (there, you got two analogies for the price of none). We are in an environment where there are very few good options. If you do nothing, your savings will be eaten away by inflation. If you do something, you find that most assets, including the stock market as a whole, are incredibly overvalued.
We are doing the only sensible thing that you can do today. We spend very little time thinking about straws or what will cause the music to stop or how overvalued the market is. We are focusing all our energy on patiently building a portfolio of high-quality, cash-generative, significantly undervalued businesses that have pricing power.
This has admittedly been less rewarding than taking risky bets on unimaginably expensive assets. It may lack the excitement of sinking money into the darlings you see in the news every day, but we hope that our stocks will look like rare gems when the euphoria condenses into despair. As we keep repeating in every letter, the market is insanely overvalued. Our portfolio is anything but – we don’t own “the market”.
*A question may arise:Why did I not tell my dentist friend to pick individual stocks? He runs a busy dental practice and wouldn’t have the time or the training to pick stocks.
Why didn’t I offer him our services? IMA manages all my and my family’s liquid assets, but I have a rule that I never (ever!) break – I don’t manage my friends’ money. I’ll help them as much as possible with free advice but will never have a professional relationship with them. I intentionally create a separation between my personal and professional lives. After a difficult day in the market, I want to be able to go for beers with friends and leave the market at the office.
Also, this simplifies my relationships with my friends. There is no ambiguity in our friendship.
Posted on March 8, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
AGREE or DISAGREE?
By Staff Reporters
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US Treasury Secretary Scott Bessent made waves yesterday with his comment that the American economy is facing a “detox period.”
Should we be seeing that this economy that we inherited [is] starting to roll a bit? Sure. And look, there’s going to be a natural adjustment as we move away from public spending to private spending. The market and the economy have just become hooked, and we’ve become addicted to this government spending, and there’s going to be a detox period. There’s going to be a detox” .
Bessent, a former hedge-fund manager, said during a CNBC interview.
“Employment should be from private companies, not from government. And I’m confident, if we have the right policies, it will be a very smooth transition.”
Bessent said, in an apparent reference to the layoffs of federal workers executed in large part by the entity known as the Department of Government Efficiency, which is run by Trump adviser Elon Musk.
You can also listen to a professional narration of this article on iTunes & online.
ENCORE: March 22, 2004
A basic property of religion is that the believer takes a leap of faith: to believe without expecting proof. Often you find this property of religion in other, unexpected places – for example, in the stock market. It takes a while for a company to develop a “religious” following: only a few high-quality, well-respected companies with long track records ever become worshipped by millions of investors. My partner, Michael Conn, calls these “religion stocks.” The stock has to make a lot of shareholders happy for a long period of time to form this psychological link.
The stories (which are often true) of relatives or friends buying few hundred shares of the company and becoming millionaires have to fester a while for a stock to become a religion. Little by little, the past success of the company turns into an absolute – and eternal – truth. Investors’ belief becomes set: the past success paints a clear picture of the future.
Gradually, investors turn from cautious shareholders into loud cheerleaders. Management is praised as visionary. The stock becomes a one-decision stock: buy. This euphoria is not created overnight. It takes a long time to build it, and a lot of healthy pessimists have to become converted into believers before a stock becomes a “religion.”
Once a stock is lifted up to “religion” status, beware: Logic is out the window. Analysts start using T-bills to discount the company’s cash flows in order to justify extraordinary valuations. Why, they ask, would you use any other discount rate if there is no risk? When a T-bill doesn’t do the trick, suddenly new and “more appropriate” valuation metrics are discovered.
Other investors don’t even try to justify the valuation – the stock did well for me in the past, why would it stop working in the future? Faith has taken over the stock. Fundamentals became a casualty of “stock religion.” These stocks are widely held. The common perception is that they are not risky.
The general public loves these companies because they can relate to the companies’ brands. A dying husband would tell his wife, “Never sell _______ (fill in the blank with the company name).” Whenever a problem surfaces at a “religion stock,” it is brushed away with the comment that “it’s not like the company is going to go out of business.” True, a “religion stock” company is a solid leader in almost every market segment where it competes and the company’s products carry a strong brand name. However, one should always remember to distinguish between good companies and good stocks.
Coca-Cola is a classic example of a “religion stock.” There are very few companies that have delivered such consistent performance for so long and have such a strong international brand name as Coca-Cola. It is hard not to admire the company.
But admiration of Coca-Cola achieved an unbelievable level in the late nineties. In the ten years leading up to 1999, Coca-Cola grew earnings at 14.5% a year, very impressive for a 103-year-old company. It had very little debt, great cash flow and a top-tier management. This admiration came at a steep price: Coca-Cola commanded a P/E of 47.5. That P/E was 2.7 times the market P/E. Even after T-bills could no longer justify Coke’s valuation, analysts started to price “hidden” assets – Coke’s worldwide brand. No money manager ever got fired for owning Coca-Cola.
The company may not have had a lot of business risk. But in 1999, the high valuation was pricing in expectations that were impossible for any mature company to meet. “The future ain’t what it used to be” – Yogi Berra never lets us down. Success over a prolonged period of time brings a problem to any company – the law of large numbers.
Enormous domestic and international market share, combined with maturity of the soft drink market, has made it very difficult for Coca-Cola to grow earnings and sales at rates comparable to the pre-1999 years. In the past five years, earnings and sales have grown 2.5% and 1.5% respectively. After Roberto C. Goizueta’s death, Coke struggled to find a good replacement – which it acutely needed.
Old age and arthritis eventually catch up with “religion stocks.” No company can grow at a fast pace forever. Growth in earnings and sales eventually decelerates. That leads to a gradual deflation of the “religion” premium. For Coke, the descent from its “religious” status resulted in a drop of nearly 20% in the share price – versus an increase of 65% in the broad market over the same time. And at current prices, the stock still is not cheap by any means. It trades at 25 times December 2004 earnings, despite expectations for sales growth in the mid single digits and EPS growth in the low double digits.
It takes a while for the religion premium to be totally deflated because faith is a very strong emotion. A lot of frustration with sub-par performance has to come to the surface.
Disappointment chips away at faith one day at a time. “Religion” stocks are not safe stocks. The leap of faith and perception of safety come at a large cost: the hidden risk of reduction in the “religion premium.” The risk is hidden because it never showed itself in the past. “Religion” stocks by definition have had an incredibly consistent track record. Risk was rarely observed.
However, this hidden risk is unique because it is not a question of if it will show up but a question of when. It is very hard to predict how far the premium will inflate before it deflates – but it will deflate eventually. When it does, the damage to the portfolio can be huge.
Religion stocks generally have a disproportionate weight in portfolios because they are never sold – exposing the trying-to-be-cautious investor to even greater risks. Coca-Cola is not alone in this exclusive club. General Electric, Gillette, Berkshire Hathaway are all proud members of the “religion stock” club as well. Past members would include: Polaroid – bankrupt; Eastman Kodak – in a major restructuring; AT&T – struggling to keep its head above water. That stock is down from over $80 in 1999 to $18 today.
Emotions have no place in investing. Faith, love, hate, and disgust should be left for other aspects of our life. More often than not, emotions guide us to do the opposite of what we need to do to be successful. Investors need to be agnostic towards “religion stocks.” The comfort and false sense of certainty that those stocks bring to the portfolio come at a huge cost: prolonged under performance.
My thoughts today (20+ years later)
This is one of the first investment articles I ever wrote. I had just started writing for TheStreet.com. It’s interesting to read this article more than 20 years later. I am surprised my writing was not as bad as I had feared (though in many cases it was worse than I feared when I read my other early articles).
So much has happened since then – I am a different person today than I was back then. I have two more kids; I have written three more books and a thousand articles. The last two decades were my formative years as an investor and adult.
The goal of the article was not to make predictions but to warn readers that the long-term success of certain companies creates a cult-like following and deforms thinking. In fact, my original article – the one I submitted to TheStreet.com – did not mention any companies other than Coke. The editors wanted me to include more names so that the article would show up on more pages of Yahoo! Finance.
With the exception of Berkshire Hathaway, all of these companies have produced mediocre or horrible returns. In the best case, their fundamental returns in their old age were only a fraction of what they were when these companies were younger and the world was their oyster.
To my surprise, Coke’s stock is still trading at a high valuation. Its business has performed like the old-timer it is, with revenue and earnings growing by only 3–4% a year. The days of double-digit revenue and earnings growth were left in the 80s and 90s, though the high valuation remained.
Posted on March 7, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Base-Erosion Anti-Abuse Tax (BEAT): The 2017 tax reforms moved the U.S. from a worldwide taxation system to a quasi-territorial system, so foreign earnings are no longer included in a company’s domestic tax base.
To discourage companies operating in the U.S. from avoiding tax liability by shifting profits out of the country, Congress imposed a 10% minimum tax called Base-Erosion Anti-Abuse Tax (BEAT). The BEAT rate will increase from 10% to 12.5% in 2026.
Leverage ratios measure the amount of capital that comes from debt. In other words, leverage financial ratios are used to evaluate a company’s debt levels. Common leverage ratios include the following:
The debt ratio measures the relative amount of a company’s assets that are provided from debt:
Debt ratio = Total liabilities / Total assets
The debt to equity ratio calculates the weight of total debt and financial liabilities against shareholders’ equity:
Debt to equity ratio = Total liabilities / Shareholder’s equity
A common stock is the least senior of securities issued by a company. A preferred stock, in contrast, is slightly more senior to common stock, since dividends owed to the preferred stockholders should be paid before distributions are made to common stockholders.
However, distributions to preferred stockholders are limited to the level outlined in the preferred stock agreement (i.e., the stated dividend payments). Like a fixed income security, preferred stocks have a specific periodic payment that is either a fixed dollar amount or an amount adjusted based upon short-term market interest rates. However, unlike fixed income securities, preferred stocks typically do not have a specific maturity date and preferred stock dividend payments are made from the corporation’s after tax income rather than its pre-tax income. Likewise, dividends paid to preferred stockholders are considered income distributions to the company’s equity owners rather than creditors, so the issuing corporation does not have the same requirement to make dividend distributions to preferred stockholders.
Preferred Stock
Thus, preferred stock is generally referred to as a “hybrid” security, since it has elements similar to both fixed income securities (i.e., a stated periodic payments) and equity securities (i.e., shareholders are considered owners of the issuing company rather than creditors).
Hybrid Securities
Convertible preferred stocks (and convertible corporate bonds) are also considered hybrid securities since they have both equity and fixed income characteristics. A convertible security whether a preferred stock or a corporate bond, generally includes a provision that allow the security to be exchanged for a given number of common stock shares in the issuing corporation. The holder of a convertible security essentially owns both the preferred stock (or the corporate bond) and an option to exchange the preferred stock (or corporate bond) for shares of common stock in the company.
Thus, at times the convertible security may behave more like the issuing company’s common stock than it does the issuing company’s preferred stock (or corporate bonds), depending upon how close the common stock’s market price is to the designated conversion price of the convertible security.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements:
Separate Account Management offers medical professionals customized personal money management services. In the typical separate account structure, a money manager invests the individual’s assets in stocks and bonds (as opposed to mutual funds providing exposure to specific asset classes) on a discretionary basis.
For physicians and healthcare providers with significant investment assets (e.g., $100,000), a separately managed portfolio can be customized to reflect their tax situation, social investment guidelines, and cash flow needs.
An additional benefit of the separate account management structure is that a client’s portfolio may be positioned over time as opportunities arise, rather than forcing stocks into the portfolio without regard to current conditions.
Although separate account management generally offers a higher degree of customization than mutual funds, fees for separate account management are generally consistent with mutual funds fees, especially given that separate account managers may discount their fees for larger portfolios.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
During its January 2025 meeting, the Medicare Payment Advisory Commission (MedPAC) reviewed and endorsed recommendations for Medicare payment reform and updates. Among other decisions, the commission recommended revisions to the annual Medicare Physician Fee Schedule (MPFS) update methodology and increased pay rates to hospitals under the Inpatient Prospective Payment System (IPPS).
This Health Capital Topics article reviews MedPAC’s recommendations, responses from industry stakeholders, and the likelihood that the commission’s recommendations will be enacted by Congress. (Read more…)
The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding.
Types of Seed funding
Friends and family funding: This type of seed funding involves raising money from friends and family members.
Angel investing: As mentioned above, angel investors are wealthy individuals who provide seed funding in exchange for equity ownership.
Seed accelerators: These are programs that provide startups with seed funding, mentorship, and resources to help them grow their businesses.
Crowdfunding: This type of funding allows startups to raise money from a large number of people, typically through an online platform.
Incubators: These are organizations that provide startups with seed funding, office space, and resources to help them grow their businesses.
Government grants: Some government agencies provide seed funding for startups working on specific projects or in specific industries.
Corporate ventures: Some big companies set up venture arms to provide seed funding to startups in their industry or complementary field.
Micro-Venture Capital: A type of venture capital that provides seed funding to new startups and early-stage companies with a small amount of money.
Dying Broke. It’s a goal for those retirees who embrace the idea of spending their hard-earned wealth during their lifetimes. Their aim is to enjoy the fruits of their labor while they can and spend the last penny just as they take their last breath. The concept feels both pragmatic and poetic.
But here’s the twist: While the concept may conjure images of lavish spending sprees and exotic vacations, that’s rarely what I see in practice. Many of my clients who identify as Die Brokers aren’t recklessly burning through their wealth. In fact, the opposite is often true.
This is because their approach to spending and giving is shaped by a lifetime of frugal money scripts that are incredibly hard to shake. Many Boomers grew up with financial uncertainty, learning to save and sacrifice to protect themselves and their families. Even after decades of financial success, those habits don’t just disappear. The idea of “spending down” their wealth, even intentionally, feels unnatural and irresponsible. There is an internal tug-of-war between their stated desire to enjoy their wealth and their deeply rooted fear of running out.
This paradox can significantly affect retirees’ financial planning. While Die Brokers may express a strong commitment to living fully, their money behavior often reveals a need for reassurance that their money will last for their lifetime.
For many Boomers, including myself, those frugal money scripts have served us well for decades. They’ve provided financial stability and peace of mind. But in this stage of life, they can also hold us back from experiencing the freedom we’ve worked so hard to achieve—especially in the time we have left when we can still physically enjoy it. The challenge is finding balance, honoring the values that got us here while allowing ourselves permission to live fully.
Here are four ways to start turning those old money scripts into permission to spend and give intentionally:
Reframe wealth as a tool rather than a safety net. Recognize that money is about opportunity as well as security. Spending with intention can bring joy and meaning, whether it’s funding a family trip, supporting a cause, or splurging on a bucket list item.
Work with your financial advisor to analyze your retirement spending and the probability of running out of money. The amount they suggest you can spend may surprise you—it’s often far higher than your frugal money scripts would lead you to believe.
Experiment with incremental giving. If parting with your wealth feels daunting, start small. Gift modest amounts to family, friends, or charities and notice how it feels. Seeing the immediate impact of your generosity can help ease the transition and loosen the grip of those old money scripts.
Set intentional spending goals instead of vaguely aiming to “enjoy your wealth.” Identify specific ways you want to use your money to enhance your life or the lives of others. Having a clear plan can turn spending into a meaningful act rather than an exercise in guilt.
For many of us, the Die Broke mentality is not about recklessness or extravagance. It’s about learning to let go. Despite our bold talk of spending down to the last penny, most of us will likely leave behind more than we planned. And maybe that’s just fine—especially for our kids and grand kids. Perhaps being a Die Broker is really about giving ourselves permission to live with intention, to savor what we’ve built, and to enjoy living to the fullest the rich life our frugality has helped provide.
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