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Posted on September 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Bonds: The 10-year Treasury yield popped on solid economic data yesterday, including weekly jobless claims falling to their lowest since mid-July and Q2 GDP rising unexpectedly.
Stocks: But good news for the labor market and economy is bad news for anyone hoping the Federal Reserve cuts interest rates next month, and the major indexes sank for a third day in a row yesterday. All eyes now turn to today’s key PCE reading.
Crypto: Digital assets continued to tumble yesterday with ether falling below $4,000 for the first time in months. There may be more pain ahead: $22 billion in crypto options expire today.
The Series 6 exam — the Investment Company and Variable Contracts Products Representative Qualification Examination (IR) — assesses the competency of an entry-level representative to perform their job as an investment company and variable contracts products representative.
The exam measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of an investment company and variable contract products representative, including sales of mutual funds and variable annuities.
Candidates must pass the Securities Industry Essentials (SIE) exam and the Series 6 exam to obtain the Investment Company and Variable Contracts Products registration.
The study of behavioral economics has revealed much about how different biases can affect our finances—often for the worse.
Take loss aversion: Because we feel a financial setback more acutely than a commensurate gain, we often cling to failed investments to avoid realizing the loss. Another potential hazard is present bias, or the tendency to prefer instant gratification over long-term reward, even if the latter gain is greater.
When it comes to money, sometimes it’s difficult to make rational decisions. Here, are three behavioral financial biases that could be impeding financial goals.
ANCHORING BIAS
Anchoring Bias happens when we place too much emphasis on the first piece of information we receive regarding a given subject. Anchoring is the mental trick your brain plays when it latches onto the first piece of information it gets, no matter how irrelevant. You might know this as a ‘first impression’ when someone relies on their own first idea of a person or situation.
Example: When shopping for a wedding ring a salesman might tell us to spend three months’ salary. After hearing this, we may feel like we are doing something wrong if we stray from this financial advice, even though the guideline provided may cause us to spend more than we can afford.
Example: Imagine you’re buying a car, and the salesperson starts with a high price. That number sticks in your mind and influences all your subsequent negotiations. Anchoring can skew our decisions and perceptions, making us think the first offer is more important than it is. Or, subsequent offers lower than they really are.
Example: Imagine an investor named Jane who purchased 100 shares of XYZ Corporation at $100 per share several years ago. Over time, the stock price declined to $60 per share. Jane is anchored to her initial price of $100 and is reluctant to sell at a loss because she keeps hoping the stock will return to her original purchase price. She continues to hold onto the stock, even as it declines, due to her anchoring bias. Eventually, the stock price drops to $40 per share, resulting in significant losses for Jane.
In this example, Jane’s nchoring bias to the original purchase price of $100 prevents her from rationalizing to sell the stock and cut her losses, even though market conditions have changed. So, the next time you’re haggling for your self, a potential customer or client, or making another big financial decision, be aware of that initial anchor dragging you down.
HERD MENTALITY BIAS
Herd Mentality Bias makes it very hard for humans to not take action when everyone around us does.
Example: We may hear stories of people making significant monetary profits buying, fixing up, and flipping homes and have the desire to get in on the action, even though we have no experience in real estate.
Example: During the dotcom bubble of the late 1990’s many investors exhibited a herd mentality. As technology stocks soared to astronomical valuations, investors rushed to buy these stocks driven by the fear of missing out on the gains others were enjoying. Even though some of these stocks had questionable fundamentals, the herd mentality led investors to follow the crowd.
In this example, the herd mentality contributed to the overvaluation of technology stocks. Eventually, it led to the dot-com bubble’s burst, causing significant losses for those who had unthinkingly followed the crowd without conducting proper research or analysis.
OVERCONFIDENT INVESTING BIAS
Overconfident Investing Bias happens when we believe we can out-smart other investors via market timing or through quick, frequent trading. This causes the results of a study to be unreliable and hard to reproduce in other research settings.
Example: Data convincingly shows that people and financial planners/advisors and wealth managers who trade most often under-perform the market by a significant margin over time. Active traders lose money.
Example: Overconfidence Investing Bias moreover leads to: (1) excessive trading (which in turn results in lower returns due to costs incurred), (2) underestimation of risk (portfolios of decreasing risk were found for single men, married men, married women, and single women), (3) illusion of knowledge (you can get a lot more data nowadays on the internet) and (4) illusion of control (on-line trading).
ASSESSMENT
Finally, questions remain after consuming this cognitive bias review.
Question: Can behavioral cognitive biases be eliminated by financial advisors in prospecting and client sales endeavors?
A: Indeed they can significantly reduce their impact by appreciating and understanding the above and following a disciplined and rational decision-making sales process.
Question: What is the role of financial advisors in helping clients and prospects address behavioral biases?
A: Financial advisors can provide an objective perspective and help investors recognize and address their biases. They can assist in creating well-structured investment and financial plans, setting realistic goals, and offering guidance to ensure investment decisions align with long-term objectives.
Question:How important is self-discipline in overcoming behavioral biases?
A; Self-discipline is crucial in overcoming behavioral biases. It helps investors and advisors adhere to their investment plans, avoid impulsive decisions, and stay focused on long-term goals reducing the influence of emotional and cognitive biases.
CONCLUSION
Remember, it is far more useful to listen to client beliefs, fears and goals, and to suggest options and offer encouragement to help them discover their own path toward financial well-being. Then, incentivize them with knowledge of the above psychological biases to your mutual success!
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com
REFERENCES:
Marcinko, DE; Dictionary of Health Insurance and Managed Care. Springer Publishing Company, New York, 2007.
Marcinko, DE: Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™. Productivity Press, NY, 2016.
Marcinko, DE: Risk Management, Liability and Insurance Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™. Productivity Press, NY, 2017.
Nofsinger, JR: The Psychology of Investing. Rutledge Publishing, 2022
Winters, Scott: The 10X Financial Advisor: Your Blueprint for Massive and Sustainable Growth. Absolute Author Publishing House, 2020.
Despite their high salaries, not all doctors are wealthy, and some live paycheck to paycheck. Here are 5 reasons why many doctors today are broke, according to https://medschoolinsiders.com
1 | Believing They Are Universally Smart
The first reason so many doctors are broke is that many doctors believe they are universally smart. While most doctors have deep specialized knowledge, there’s a big difference between being smart in your profession and being smart with money. A physician’s schooling is quite thorough when it comes to the human body, but med school doesn’t include a prerequisite class on how to handle finances.
Graduating medical school is a major feat and certainly demonstrates superior work ethic and cognitive abilities. But many new doctors believe these accomplishments transcend all aspects of life. If you’re smart enough to earn an MD, you’re certainly smart enough to handle your finances, but only once you properly and intentionally educate yourself.
The truth is doctors, especially traditional graduates, haven’t had an opportunity to manage large sums of money until they become fully trained attending physicians and start pulling in low to mid six figures in income. Prior to that, there was very little of it to manage.
Far too many aspiring doctors, and students in general, don’t take the time to learn financial basics, in part because it’s uncomfortable and seems like something they can figure out “later”, whenever that may be. Their poor spending habits and lack of investment knowledge carry over into their careers, causing many to make irresponsible decisions.
The second factor is overspending too soon, and this comes up at two points in training.
First, it’s natural to want to start spending more as soon as you get into residency and start making a little more money. After all, you’ve been a broke student for 8 or more years, and now you’re finally making a reasonable and reliable wage. But that’s where young doctors get into trouble. Residency pays, but not nearly as much as you will be making once you become an attending physician. The average resident makes about $60K a year, and if you begin spending all of that money right away, thinking you’ll handle your loans once you become an attending, you delay paying off your medical school debt, which means the compounding effect through your student loan interest rate works against you.
Now that $250,000 in student loans has ballooned to over $350,000 by the time you finish residency. The compounding effect, which can be one of your greatest allies in your financial life, becomes an equally powerful enemy when working against you through debt. But of course, pinching pennies is easier said than done, especially when you’re in residency and are surrounded by peers in different professions. They’ve been earning good money much longer than you have, and they can afford more luxurious lifestyles.
They may not be worried about indulging in fine dining or how much a hotel costs when traveling. Students in college and medical school are often confident they will resist the temptations, but the desire to keep up with your friends and family can be difficult to ignore, which causes many to overspend before they technically have the money to do so.
The same is true of attending physicians. As soon as those six-figure salaries come rolling in, many physicians go overboard with spending, trying to make up for lost time and to treat yourself.
Now, we are not suggesting you shouldn’t reward yourself for completing residency, but that reward shouldn’t be a Lamborghini. It’s best to continue living like a resident in your first few years after becoming an attending to pay off loans, put a down payment on a home, and get your financial foundation built before loosening the purse strings.
3 | Decreasing Salaries
Third, doctors continue to make less money than they did before. And this includes nearly all 44 medical specialties. For example, while physician compensation technically rose from $343k to $391k between 2017 and 2022, this rise does not keep up with inflation. The real average compensation in 2022 was less than $325k—a $20k decrease in purchasing power in only six years.
For doctors who are already spending to the limits of their salaries with huge mortgages, car payments, business costs, and other luxuries, a decreased salary can have a huge impact. You might be able to cut back by going on fewer vacations or eating out less frequently, but many accrued costs are locked in, such as a mortgage payment, car loan, or leased rental space for your practice.
4 | Increasing Costs of Private Practice
In the past, running a private practice was much simpler, but recent stricter guidelines and regulations have made it difficult for solo practices to keep up. While regulations like the Health Insurance Privacy and Portability Act, or HIPAA, and mandatory Electronic Medical Records, or EMRs, are necessary to protect patients, they make costs higher for physicians who run their own private practice. These physicians need to spend their own money to set up and maintain EMRs as well as invest in security to ensure patient data is protected.
With the steep rise of inflation we’ve seen over the past couple of years, everything is more expensive, which means costs, such as business space, equipment, and even office supplies, have gone up for private practice physicians while salaries have not. 2013 to 2020 saw an annual inflation rate of anywhere from 0.7% to 2.3%. This skyrocketed to an annual inflation rate of 7.0% in 2021 and another 6.5% in 2022. In fact, the cost of running a private practice has increased by almost 40% between 2001 and 2021.
These increased costs are exacerbated by another problem plaguing private practices; decreased reimbursement. While costs increased by almost 40%, Medicare reimbursement only increased by 11%. When doctors see patients who are insured, the insurance companies pay the physicians for their time. For Medicare, the new proposed rules for 2023 would cut reimbursement by around 5%. When adjusting for inflation, Medicare reimbursement decreased by 20% in the last 20 years.
These costs add up, making it extremely difficult for physicians to thrive financially while running a private practice.
5 | Tuition Debt
Lastly, we can’t talk about a doctor’s finances without mentioning the exorbitant debt so many graduating physicians are left with. It won’t shock you to hear that med school is expensive. Extremely expensive. The average cost of tuition for a single year is nearly $60k, with significant variance from school to school, and that’s before accounting for living expenses.
In-state applicants pay less than out-of-state applicants, and students at private schools typically pay more than students at public medical schools. The astronomical costs mean the vast majority of students can’t pay for medical school out of their own pockets. And unless your family is part of the 1%, even with your parents footing the bill, it’s difficult to cover tuition, let alone rent, groceries, transportation, tech, social activities, exam fees, and application costs.
The average total student debt after college and med school is over $250k. But keep in mind that’s the average, which includes 27% of students who graduate with no debt at all. This means the vast majority of students leave medical school owing much more than $250k.
For some perspective, in 1978, the average debt for graduating MDs was $13,500, which, when adjusted for inflation, is a little over $60,000. There are multiple ways to eventually repay these loans, but time and discipline are essential to ensure this money is paid off as quickly as possible.
According to financial advisor Dr. David Edward Marcinko MEd MBA CMP™; consider the following:
Place a portion of your salary (15-20% or more) into a savings account, and another portion (10-20% or more) into wise investments [stocks, bonds, mutual funds, and/or ETFs].
Pay off your bills each month, and then use leftover spending money to purchase fun things like vacations and fancy dinners, within your means. Shop sales, buy used clothes, and use credit card points for travel.
Hire an excellent tax professional and meet with an investment advisor once or twice a year about your investment status and strategy. http://www.MarcinkoAssociates.com
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
The Series 7 exam — the General Securities Representative Qualification Examination (GS) — assesses the competency of an entry-level registered representative to perform their job as a general securities representative.
The exam measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of a general securities representative, including sales of corporate securities, municipal securities, investment company securities, variable annuities, direct participation programs, options and government securities.
Posted on September 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS!
By Staff Reporters
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Federal Reserve Chairman Jerome Powell just announced that the central bank [FOMC] would cut interest rates amid President Donald Trump’s attempts to reshape the Fed’s independence.
The chairman announced that the Federal Reserve would cut the interest rate by .25 points, the first time that it cut interest rates since December.
A paradox is a statement or situation that seems contradictory but actually makes sense when you think about it more deeply. It challenges logic and often reveals a hidden truth.
FLEXIBLY DOGMATIC PARADOX
The Flexibly Dogmatic Paradox suggests that no matter how sensible your financial planning, investing or wealth management process is there will be uncomfortably long periods when it looks broken. And process is the best way of ensuring you keep standing for something because if you don’t stand for something, you’ll fall for anything. This is why, when assessing an investment fund, focus 50% on the manager’s character and 50% on their process. Everything else is detail. There are few guarantees in investing, but the fact that markets will batter you emotionally is one of them.
Example: During volatile times, the temptation to abandon the process is strong. But that’s why it’s there. Process is what forces one fund manager to keep buying unbroken companies when everyone else thinks they’re bust, and another to keep faith with a top-quality company when the mob says it’s too expensive The best fund managers dogmatically stick to their process when it’s out of favor. Then, when it returns to favor, the elastic pings back: they recapture lost ground surprisingly fast. However, every rule has an exception. And spotting the exceptions to their process is something the true greats have a knack for buying and selling.
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Example: In 2007, US value manager Bill Miller had the makings of an investment legend, but the financial crisis wrecked all that. His process told him to double down into falling share prices, which had worked well for years. But it doesn’t work if the companies go bust, which many of his financial stocks did in 2008.
The fact is that no matter how good it is, a process operated without human judgment is just an algorithm. The best fund managers and financial prospectors and sales men/women know this.
They stick dogmatically to their process but somehow remain flexible enough to spot the occasions when it’s about to drive them into a brick wall.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Dr. Harry Markowitz is credited with developing the framework for constructing investment portfolios based on the risk-return tradeoff. William Sharpe, John Lintner, and Jan Mossin are credited with developing the Capital Asset Pricing Model (CAPM).
CAPM is an economic model based upon the idea that there is a single portfolio representing all investments (i.e., the market portfolio) at the point of the optimal portfolio on the Capital Market Line (CML) and a single source of systematic risk, beta, to that market portfolio. The resulting conclusion is that there should be a “fair” return investors should expect to receive given the level of risk (beta) they are willing to assume.
The excess return, or return above the risk-free rate, that may be expected from an asset is equal to the risk-free return plus the excess return of the market portfolio times the sensitivity of the asset’s excess return to the market portfolio excess return. Beta, then, is a measure of the sensitivity of an asset’s returns to the market as a whole. A particular security’s beta depends on the volatility of the individual security’s returns relative to the volatility of the market’s returns, as well as the correlation between the security’s returns and the markets returns.
While a stock may have significantly greater volatility than the market, if that stock’s returns are not highly correlated with the returns of the overall market (i.e., the stock’s returns are independent of the overall market’s returns), then the stock’s beta would be relatively low. A beta in excess of 1.0 implies that the security is more exposed to systematic risk than the overall market portfolio, and likewise, a beta of less 1.0 means that the security has less exposure to systematic risk than the overall market.
MPT has helped focus investors on two extremely critical elements of investing that are central to successful investment strategies.
First, MPT offers the first framework for investors to build a diversified portfolio. Furthermore, an important conclusion that can be drawn from MPT is that diversification does in fact help reduce portfolio risk.
Thus, MPT approaches are generally consistent with the first investment rule of thumb, “understand and diversify risk to the extent possible.”
Additionally, the risk/return tradeoff (i.e., higher returns are generally consistent with higher risk) central to MPT based strategies has helped investors recognize that if it looks too good to be true, it probably is.
Passive Investing
Passive investing is a monetary plan in which an investor invests in accordance with a pre-determined strategy that doesn’t necessitate any forecasting of the economy or an individual company’s prospects. The primary premise is to minimize investing fees and to avoid the unpleasant consequences of failing to correctly predict the future. The most accepted method to invest passively is to mimic the performance of a particular index. Investors typically do this today by purchasing one or more ‘index funds’. By tracking an index, an investor will achieve solid diversification with low expenses.
An ivestor could potentially earn a higher rate of return than an investor paying higher management fees. Passive management is most widespread in the stock markets. But with the explosion of exchange traded funds on the major exchanges, index investing has become more popular in other categories of investing. There are now literally hundreds of different index funds.
Passive management is based upon the Efficient Market Hypothesis theory. The Efficient Market Hypothesis (EMH) states that securities are fairly priced based on information regarding their underlying cash flows and that investors should not anticipate to consistently out-perform the market over the long-term.
The Efficient Market Hypothesis evolved in the 1960s from the Ph.D. dissertation of Eugene Fama. Fama persuasively made the case that in an active market that includes many well-informed and intelligent investors, securities will be appropriately priced and reflect all available information. If a market is efficient, no information or analysis can be expected to result in out-performance of an appropriate benchmark. There are three distinct forms of EMH that vary by the type of information that is reflected in a security’s price:
Weak Form
This form holds that investors will not be able to use historical data to earn superior returns on a consistent basis. In other words, the financial markets price securities in a manner that fully reflects all information contained in past prices.
Semi-Strong Form
This form asserts that security prices fully reflect all publicly available information. Therefore, investors cannot consistently earn above normal returns based solely on publicly available information, such as earnings, dividend, and sales data.
Strong Form
This form states that the financial markets price securities such that, all information (public and non-public) is fully reflected in the securities price; investors should not expect to earn superior returns on a consistent basis, no matter what insight or research they may bring to the table.
While a rich literature has been established regarding whether EMH actually applies in any of its three forms in real world markets, probably the most difficult evidence to overcome for backers of EMH is the existence of a vibrant money management and mutual fund industry charging value-added fees for their services.
The notion of passive management is counterintuitive to many investors. Passive investing proponents follow the strong market theory of EMH. These proponents argue several points including;
In the long term, the average investor will have a typical before-costs performance equal to the market average. Therefore the standard investor will gain more from reducing investment costs than from attempting to beat the market over time.
The efficient-market hypothesis argues that equilibrium market prices fully reflect all existing market information. Even in the case where some of the market information is not currently reflected in the price level, EMH indicates that an individual investor still cannot make use of that information. It is widely interpreted by many academics that to try and systematically “beat the market” through active management is a fools game.
Not everyone believes in the efficient market. Numerous researchers over the previous decades have found stock market anomalies that indicate a contradiction with the hypothesis. The search for anomalies is effectively the hunt for market patterns that can be utilized to outperform passive strategies. Such stock market anomalies that have been proven to go against the findings of the EMH theory include;
Low Price to Book Effect
January Effect
The Size Effect
Insider Transaction Effect
The Value Line Effect
All the above anomalies have been proven over time to outperform the market. For example, the first anomaly listed above is the Low Price to Book Effect. The first and most discussed study on the performance of low price to book value stocks was by Dr. Eugene Fama and Dr. Kenneth R. French. The study covered the time period from 1963-1990 and included nearly all the stocks on the NYSE, AMEX and NASDAQ. The stocks were divided into ten subgroups by book/market and were re-ranked annually. In the study, Fama and French found that the lowest book/market stocks outperformed the highest book/market stocks by a substantial margin (21.4 percent vs. 8 percent). Remarkably, as they examined each upward decile, performance for that decile was below that of the higher book value decile. Fama and French also ordered the deciles by beta (measure of systematic risk) and found that the stocks with the lowest book value also had the lowest risk.
Today, most researchers now deem that “value” represents a hazard feature that investors are compensated for over time. The theory being that value stocks trading at very low price book ratios are inherently risky, thus investors are simply compensated with higher returns in exchange for taking the risk of investing in these value stocks. The Fama and French research has been confirmed through several additional studies. In a Forbes Magazine 5/6/96 column titled “Ben Graham was right–again,” author David Dreman published his data from the largest 1500 stocks on Compustat for the 25 years ending 1994. He found that the lowest 20 percent of price/book stocks appreciably outperformed the market.
One item a medical professional should be aware of is the strong paradox of the efficient market theory. If each investor believes the stock market were efficient, then all investors would give up analyzing and forecasting. All investors would then accept passive management and invest in index funds. But if this were to happen, the market would no longer be efficient because no one would be scrutinizing the markets. In actuality, the efficient market hypothesis actually depends on active investors attempting to outperform the market through diligent research.
The case for passive investing and in favor of the EMH is that a preponderance of active managers do actually underperform the markets over time. The latest study by Standard and Poor’s (S&P) confirms this fact. S&P recently compared the performance of actively-managed mutual funds to passive market indexes twice per year. The 2012 S&P study indicated that indexes were once again outperforming actively-managed funds in nearly every asset class, style and fund category. The lone exception in the 2012 report was international equity, where active outperformed the index that S&P chose. The study examined one-year, three-year and five-year time periods. Within the U.S. equity space, active equity managers in all the categories failed to outperform the corresponding benchmarks in the past five year period. More than 65 percent of the large-cap active managers lagged behind the S&P 500 stock index. More than 81 percent of mid-cap mutual funds were outperformed by the S&P MidCap 400 index.
Lastly, 77 percent of the small-cap mutual funds were outperformed by the S&P SmallCap 600 index. U.S. bond active managers fared no better that equity managers over a five year period. More than 83 percent of general municipal mutual funds under-performed the S&P National AMT-Free Municipal Bond index, 93 percent of government long-term funds under-performed the Barclays Long Government index, nearly 95 percent of high yield corporate bond funds under-performed the Barclays High Yield index. Although the performance measurements for index investing are very strong, many analysts find three negative elements of passive investing;
Downside Protection: When the stock market collapses like in 2008, an index investor will assume the same loss as the market. In the case of 2008, the S&P 500 stock index fell by more than 50 percent, offering index investors no downside protection.
Portfolio Control: An index investor has no control over the holdings in the fund. In the event that a certain sector becomes over-owned (i.e. technology stocks in 2000), an index investor maintains the same weight as the index.
Average Returns: An index investor will never have the opportunity to outperform the market, but will always follow. Although the markets are very efficient, an investor can perhaps take advantage of market anomalies and invest with those managers who have maintained a long-term performance edge over the respective index.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Capitation is a type of healthcare payment system in which a physician or hospital is paid a fixed amount of money per patient for a prescribed period by an insurer or physician association. The cost is based on the expected healthcare utilization costs for a group of patients for that year.
With capitation, the physician—otherwise known as the primary care physician— is paid a set amount for each enrolled patient whether a patient seeks care or not. The PCP is usually contracted with an HMO whose role it is to recruit patients.
According to Richard Eskow, CEO of Health Knowledge Systems of Los Angeles, capitated medical reimbursement has been used in one form or another, in every attempt at healthcare reform since the Norman Conquest. Some even say an earlier variant existed in ancient China [personal communication].
Initially, when Henry I assumed the throne of the newly combined kingdoms of England and Normandy, he initiated a sweeping set of healthcare reforms. Historical documents, though muddled, indicate that soon thereafter at least one “physician,” John of Essex, received a flat payment honorarium of one penny per day for his efforts. Historian Edward J. Kealey opined that sum was roughly equal to that paid to a foot-soldier or a blind person. Clearer historical evidence suggests that American doctors in the mid-19th century were receiving capitation-like payments. No less an authoritative figure than Mark Twain, in fact, is on record as saying that during his boyhood in Hannibal, MO his parents paid the local doctor $25/year for taking care of the entire family regardless of their state of health.
Later, Sidney Garfield MD [1905-1984] is noted as one of the great under-appreciated geniuses of 20th century American medicine stood in the shadow cast by his more celebrated partner, Henry J. Kaiser. Garfield was not the first physician to embrace the notion of prepayment capitation, nor was he the first to understand that physicians working together in multi-specialty groups could, through collaboration and continuity of care, outperform their solo practice colleagues in almost every measure of quality and efficiency. The Mayo brothers, of course, had prior claim to that distinction. What Garfield did, was marry prepayment to group practice, providing aligned financial incentives across every physician and specialty in his medical group, as well as a culture of group accountability for the care of every member of the affiliated health plan. He called it “the new economics of medicine,” and at its heart was a fundamentally new paradigm of care that emphasized – prevention before treatment – and health before sickness. Under his model: the fewer the sick – the greater the remuneration. And: the less serious the illness, the better off the patient and the doctors.
Such ideas were heresy to the reigning fee-for-service, solo practice, ideologues of the mainstream medical establishment of the 1940s and ‘50s, of course. Throughout the period, Garfield and his group physicians were routinely castigated by leaders of the AMA and county medical associations as socialistic and unethical. The local medical associations in Garfield’s expanding service areas – the San Francisco Bay Area, Los Angeles, and Portland, Oregon – blocked group practice physicians from association membership, effectively shutting them out of local hospitals, denying them patient referrals or specialty society accreditation. Twice in the 1940s, formal medical association charges were brought against Garfield personally, at one time temporarily succeeding in suspending his license to practice medicine.
Of course, capitation payments made a comeback in the first cost-cutting managed care era of the 1980-90s because fee-for-service medicine created perverse incentives for physicians by paying more for treating illnesses and injuries than it does for preventing them — or even for diagnosing them early and reducing the need for intensive treatment later. Nevertheless, the modern managed care industry’s experience with capitation wasn’t initially a good one. The 1980-90s saw a number of HMOs attempt to put independent physicians, especially primary care doctors, into a capitation reimbursement model. The result was often negative for patients, who found that their doctors were far less willing to see them — and saw them for briefer visits — when they were receiving no additional income for their effort. Attempts were also made to aggregate various types of health providers — including hospitals and physicians in multiple specialties — into “capitation groups” that were collectively responsible for delivering care to a defined patient group. These included healthcare facilities and medical providers of all types: physicians, osteopaths, podiatrists, dentists, optometrists, pharmacies, physical therapists, hospitals and skilled nursing homes, etc.
However, the healthcare industry isn’t collective by nature, and these efforts tended to be too complicated to succeed. One lesson that these experiments taught is that provider behavior is difficult to change unless the relationship between that behavior and its consequences is fairly direct and easy to understand.
Today, the concept of prepayment and medical capitation is to uncouple compensation from the actual number of patients seen, or treatments and interventions performed. This is akin to a fixed price restaurant menu, as opposed to an àla carte eatery.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on September 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Stocks: The NASDAQ rose to its fifth record high of the week, while the S&P 500 and the Dow sank late in the day as investors turned their attention to the FOMC meeting next week.
Bonds: While equities climbed all week long, the bond market has been sending signals that weak economic data really isn’t great news.
Commodities: Oil rallied after President Trump expressed his growing frustration with Vladimir Putin and threatened further energy and financial sanctions. Meanwhile, the US may ask its G7 counterparts to apply 100% tariffs against China and India for purchasing Russian crude.
Posted on September 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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BIAS
Bias is a prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.
MYOPIA
Myopia (nearsightedness) is a common condition that’s usually diagnosed before age 20. It affects your distance vision — you can see objects that are near, but you have trouble viewing objects that are farther away like grocery store aisle markers or road signs. Myopia treatments include glasses, contact lenses or surgery.
MYOPIA BIAS
Myopia Bias makes it hard for us to imagine what our lives might be like in the future.
FinancialExample: When we are young, healthy and in our prime economic earning years it may be hard for us to picture what life will be like when our health depletes and we no longer have the earnings necessary to support our standard of living.
Irony: This short-sightedness makes it hard to save adequately when we are young … when saving does the most good.
Here are some of the most common risks associated with fixed income securities.
Interest Rate Risk
The market value of the securities will be inversely affected by movements in interest rates. When rates rise, market prices of existing debt securities fall as these securities become less attractive to investors when compared to higher coupon new issues. As prices decline, bonds become cheaper so the overall return, when taking into account the discount, can compete with newly issued bonds at higher yields. When interest rates fall, market prices on existing fixed income securities tend to rise because these bonds become more attractive when compared to the newly issued bonds priced at lower rates.
Price Risk
Investors who need access to their principal prior to maturity have to rely on the secondary market to sell their securities. The price received may be more or less than the original purchase price and may depend, in general, on the level of interest rates, time to term, credit quality of the issuer and liquidity.
Among other reasons, prices may also be affected by current market conditions, or by the size of the trade (prices may be different for 10 bonds versus 1,000 bonds), etc. It is important to note that selling a security prior to maturity may affect actual yield received, which may be different than the yield at which the bond was originally purchased. This is because the initially quoted yield assumed holding the bond to term. As mentioned above, there is an inverse relationship between interest rates and bond prices. Therefore, when interest rates decline, bond prices increase, and when interest rates increase, bond prices decline.
Generally, longer maturity bonds will be more sensitive to interest rate changes. Dollar for dollar, a long-term bond should go up or down in value more than a short-term bond for the same change in yield. Price risk can be determined through a statistic called duration, which is featured at the end of the fixed income section.
Liquidity risk is the risk that an investor will be unable to sell securities due to a lack of demand from potential buyers, sell them at a substantial loss and/or incur substantial transaction costs in the sale process. Broker/dealers, although not obligated to do so, may provide secondary markets.
Reinvestment Risk
Downward trends in interest rates also create reinvestment risk, or the risk that the income and/or principal repayments will have to be invested at lower rates. Reinvestment risk is an important consideration for investors in callable securities. Some bonds may be issued with a call feature that allows the issuer to call, or repay, bonds prior to maturity. This generally happens if the market rates fall low enough for the issuer to save money by repaying existing higher coupon bonds and issuing new ones at lower rates. Investors will stop receiving the coupon payments if the bonds are called. Generally, callable fixed income securities will not appreciate in value as much as comparable non-callable securities.
Similar to call risk, prepayment risk is the risk that the issuer may repay bonds prior to maturity. This type of risk is generally associated with mortgage-backed securities. Homeowners tend to prepay their mortgages at times that are advantageous to their needs, which may be in conflict with the holders of the mortgage-backed securities. If the bonds are repaid early, investors face the risk of reinvesting at lower rates.
Purchasing Power Risk
Fixed income investors often focus on the real rate of return, or the actual return minus the rate of inflation. Rising inflation has a negative impact on real rates of return because inflation reduces the purchasing power of the investment income and principal.
When owners of a security spread false information to pump up the price of the security and subsequently sell off their shares, making a profit—the “dump.”
Refer to attempts by investors to move the price of a stock opportunistically by selling large numbers of shares short. The investors pocket the difference between the initial price and the new, lower price after this maneuver. This technique is illegal under SEC rules, which stipulate that every short sale must be on an uptick. For more information on this complex tactic, read on in this piece from the Wharton School of Business.
Wash Trading
Involves the simultaneous or near-simultaneous sale and repurchase of the same security for the purpose of generating activity and increasing the price.
When fraudsters manipulate the market through matched orders, they enter trades to buy or sell securities with the knowledge that a matching order on the opposite side has been or will be entered. During his tenure at the Commission, our partner Jordan Thomas was involved in a case where the SEC won summary judgement and obtained settlements with an astonishing 16 defendants who engaged in matched trades, among other illicit tactics.
Painting the Tape
Painting the tape refers to placing successive orders in small amounts at increasing or decreasing prices.
Spoofing & Layering
High frequency traders are known to use the tactics of Spoofing & Layering to manipulate share prices. Spoofing is the placing of a bid or offer with the intent to cancel before execution. Layering is a form of spoofing in which the trader places multiple orders on one side of the book, in order to create a false impression of heavy buying or selling.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Although 97% of people aren’t yet millionaires, many could eventually meet that target if they start investing sooner rather than later; especially doctors [MD, DO, DPM, DDS or DMD].
A 20-year-old, for instance, needs to invest just $330 a month into an asset class that delivers a 7% to 8% annual return to reach $1.26 million by the time s/he turns 65 years old. The luxury of time significantly boosts your chances of becoming a millionaire.
This doesn’t mean it’s too late for middle-aged savers to reach that millionaire milestone, but it will take a significantly greater investment. If a 50-year-old doctor hasn’t started saving for retirement, s/he would need to invest $3,958 a month at a steady 7% return to reach $1.26 million by retirement.
However, according to one Goldman Sachs report, investors could expect the S&P 500 to deliver just 3% annualized nominal returns over the next 10 years.
After an average 13% yearly return for the past decade, a new strategy outside of the stock market may be needed for that level of outsized gain, especially if you’re late to investing.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
According to Medical Economics, there were 10 clinic and physician practices filing bankruptcy in 2024, making it the highest level of the last six years, according to a new analysis of cases with liabilities of at least $10 million.
Meanwhile, the Steward Health Care System bankruptcy, which was based in Massachusetts but making headlines across the nation, has become “the largest hospital sector bankruptcy by far in the last 30 years,” according to a new analysis by Gibbins Advisors, based in Nashville, Tennessee.
Health care bankruptcy filings totaled 57 last year, down from 79 in 2023, said “Healthcare Restructuring: Trends and Outlook.” The report analyzed Chapter 11 health care bankruptcy cases with liabilities of at least $10 million, since 2019.
Last year’s total was down 28% from 2023’s peak, but greater than the 2019 to 2022 average of 42 filings a year, the report said.
Bankruptcy, often considered a last financial resort, is a legal process that can help alleviate outstanding debts for individuals and businesses. Reasons to file for bankruptcy can include divorce, job loss, exorbitant medical bills or credit card debt.
There are several types of bankruptcy — six, as a matter of fact. The two most common types of bankruptcy for individuals are Chapter 7 and Chapter 13.
But there are four other types as well: Chapter 9, Chapter 11, Chapter 12 and Chapter 15. And, the type of bankruptcy filed depends on the situation.
Regardless of which type, the process is typically the same: You’ll usually retain an attorney and make your case before a judge, who will then erase some debts or set up a repayment plan.
Also note that an eligibility requirement — for all bankruptcy chapters — is that you must undergo credit counseling within the 180 days before filing.
Posted on September 7, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Health Capital Consultants, LLC
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A recent study of hospital physician acquisition and employment found that such acquisitions decrease competition and raise prices. A National Bureau of Economic Research (NBER) working paper, released in July 2025, “empirically analyze[d] the effects of mergers between complementary firms on competition and pricing,” and found hospital prices increased by an average of 3.3%, while physician prices increased by an average of 15.1%.
This Health Capital Topics article reviews the study’s findings and implications for the healthcare industry. (Read more…)
Posted on September 6, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters and A.I.
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Markets: Stocks started off Friday on a high note after a weak jobs report raised hopes that the Fed will cut interest rates this month. But the rally faded as the afternoon wore on, while 10-year bond yields tumbled to their lowest level since April.
Trade: President Trump said “fairly substantial” tariffs for semi-conductors are coming “very shortly,” but hinted that companies like Apple will be spared. He also clapped back at EU regulators for fines against Google.
Offbeat commodities: Raw sugar prices hit a two-month low as Brazilian producers churn out more of the sweet stuff, cocoa prices are expected to pop after Cargill paused production in Ivory Coast, and corn hit its highest price since July thanks to strong export demand.
Ikea Effect Bias describes the tendency of people to place a higher value on products they have partially created or assembled themselves. This phenomenon is named after the Swedish furniture retailer Ikea, known for selling furniture in flat-pack kits that customers must assemble at home.
he IKEA effect was identified and named by Michael Norton of Harvard Business School, Daniel Mochon of Yale University and colleague Dan Ariely PhD of Duke University, who published the results of three studies in 2011. They described the IKEA effect as “labor alone can be sufficient to induce greater liking for the fruits of one’s labor: even constructing a standardized bureau, an arduous, solitary task, can lead people to overvalue their (often poorly constructed) creations.”
Example: A prospect is more likely to pursue his/her own financial plan than that one from an informed financial planner, CPA or professional advisor.
2011 study found that subjects were willing to pay 63% more for furniture they had assembled themselves than for equivalent pre-assembled items.
IN FINANCE AND INVESTING
The IKEA effect can contribute to reducing panic selling. Investors typically reduce their stock market exposure after a financial crash which often results in “buy high, sell low” strategy that is detrimental to long-run wealth accumulation.
Ashtiani et al.’s study proposes a nudge utilizing the IKEA effect to counteract this phenomenon: “actively involving investors in the selection process of the risky investments, while restricting their selections in a way that preserves a large degree of 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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on September 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Stocks: Equities climbed slowly but steadily yesterday as investors braced themselves for today’s all-important jobs report.
Crypto: Bitcoin fell as a selloff in cryptocurrencies associated with the Trump family pulled the entire crypto market lower.
Commodities: Gold remains in the spotlight as traders bulk up on bullion to protect their portfolios in case the FOMC loses its independence. If that does happen,Goldman Sachs analysts think gold could climb to $5,000.
Posted on September 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
A.I. by Artificial Intelligence
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Artificial intelligence (AI) refers to computer systems capable of performing complex tasks that historically only humans could do, such as reasoning, making decisions, or solving problems. Today, the term “AI” describes a wide range of technologies that power many of the services and goods we use every day – from apps that recommend TV shows to chatbots that provide customer support in real time. And yet, there is a hierarchy among related concepts such as machine learning and deep learning.
So, to summarize the hierarchy:
AI is the goal: machines that can think and act intelligently.
Machine learning is a method within AI that lets machines learn from data.
Deep learning is a specialized form of machine learning that uses multi-layered neural networks to analyze data in a way that mimics the human brain.
It’s a feature, not a bug
And, there’s no shortage of companies leveraging AI today to remain profitable, to the delight of Salesforce investors: among others:
Wells Fargo’s CEO has touted trimming its workforce for 20 straight quarters. Its stock is up 228% over the past five years.
Bank of America CEO Brian Moynihan wasn’t hiding it during a recent earnings call when he said the company has let go of 88,000 employees over the past 15 years. BofA stock is up 95% since 2020.
Amazon, with its share value up 28% over the past year, recently told staff that AI implementation would lead to layoffs.
Microsoft has cut 15,000 jobs in the past two months as the company pivots to AI—and its stock is also up since the beginning of July.
Posted on September 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Bonds: Treasury yields rose yesterday as investors dug into a Federal appeals court ruling last Friday stating that most of President Trump’s tariffs are illegal. The 30-year yield closed in on the key 5% level. Stocks: Equities tumbled across the board as technology stocks sold off and pulled the rest of the market down with them. Commodities: Gold hit a new record high as traders hedged against tariff uncertainty and braced themselves for an extremely important US jobs report on Friday that could make or break the case for the Fed to start cutting rates.
Posted on September 2, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Markets: After a day off for Labor Day, Wall Street is entering September with little confidence as stocks shrugle with tariffs and AI-slowdown jitters to rise for four straight months. September has historically been the weakest month for US stocks, plus a hugely consequential Federal Reserve meeting looms on September17th.
Stock spotlight: An already booming Celsius hit a 52-week high last week after Pepsi said it would up its stake in the energy drink maker.
Posted on August 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Rick Kahler; MSFP CFP™
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This month, the U.S. government demanded a direct cut of a company’s foreign sales as the price for letting those sales happen.
Tech companies Nvidia and AMD had been stuck in regulatory limbo over selling their newest AI chips to China. According to an August 12, 2025, Reuters article by Karen Freifeld, Nvidia CEO Jensen Huang had even received a public “green light” for the company’s H20 chip, but the Commerce Department would not issue the export licenses.
The stalemate ended only after Huang met with President Trump and agreed to a deal: the licenses would be granted, but the U.S. Treasury would get 15% of all H20 revenue from China. AMD agreed to identical terms for its MI308 chip. Two days later, both companies had their licenses.
The numbers are staggering. Bernstein Research estimates Nvidia could sell $15 billion worth of H20 chips in China this year, and AMD about $800 million of MI308s. That is more than $2 billion flowing straight to Washington, not as taxes but as a contractual price for market access. The legality of this arrangement is questionable, and the deal also raises security concerns.
It is worth noting the administration first asked for 20% before “settling” on 15%. This was not a polite request but a “take it or leave it” demand. From a behavioral economics standpoint, the decision was predictable. The pain of losing an entire market is far greater than the pain of losing a fraction of it.
How is this any different from a tariff? A tariff is a standardized, legally defined tax that applies broadly to certain goods and is collected under public trade policy. This 15% cut is a one-off, privately negotiated condition aimed at just two companies, tied to export license approval. It is taken from gross revenue, not profit, meaning the government gets paid on every dollar of sales before the companies cover a single expense.
“Tax farmming” is an old practice where the state sold the right to collect taxes for a fixed sum, allowing the collectors to keep the rest. Its use in France made some people enormously rich, made everyone else furious, and eventually helped spark the French Revolution. Similar systems appeared in Ottoman Egypt, Qing China, and the early Dutch Republic until abuses finally brought them down.
The Nvidia/AMD deal is not exactly tax farming, but it is a similar dynamic. The government’s role is no longer just regulating. It is stepping in as a business partner, taking a direct share of private sales. Supporters might call it a smart use of national leverage. Critics will see a step away from free-market capitalism toward something more political and transactional.
Nor is this deal a one-off. In June, the administration approved foreign investment in U.S. Steel only after securing a “golden share” that gives it veto power over strategic corporate decisions. History teaches us that once a government finds a way to take a cut, it rarely stops with one sector. Today it is steel and AI chips to China. Tomorrow it could be pharmaceuticals, energy, or consumer goods.
What is the likely impact for average Americans? Money flowing to the U.S. Treasury from a source other than taxpayers may seem like a benefit. Yet any company required to give away 15% of its gross revenue, which could equal its entire profit, has to compensate in some way. The most likely result is higher prices. Hiking prices on computer chips sold to China may not seem to be a big deal—until you consider that many of the products that use those chips are sold to U.S. consumers.
Posted on August 30, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
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Stocks: The final trading day of the summer was bad as a selloff in technology stocks took indexes down from recent all-time highs.
Fed drama: A judge did not issue a ruling on Fed Governor Lisa Cook’s bid for a temporary restraining order against President Trump, delaying it a few more days and leaving Cook in limbo.
Commodities: Gold hit a new all-time high as traders worried about the possibility of the Federal Reserve losing its independence.
A silent, non-directed, ghost, blind, faux, or “mirror” PPO, HMO, or other provider model is not really a formalized managed care organization [MCO] at all. Rather, it was simply an intermediary attempt, and Ponzi-like scheme, to negotiate practitioner fees downward, by promising a higher volume of patients in exchange for the discount.
Of course, the intermediary [discount-broker] then resells the packaged contract product to any willing insurance company, HMO, PPO or other payer, thereby pocketing the difference as a nice profit. Sometime, these virtual organizations are just indemnity companies in disguise.
NOTE: The term indemnity insurance refers to an insurance policy that compensates an insured party for certain unexpected damages or losses up to a certain limit—usually the amount of the loss itself. Insurance companies provide coverage in exchange for premiums paid by the insured parties.
These policies are commonly designed to protect professionals and business owners when they are found to be at fault for a specific event such as misjudgment or malpractice. They generally take the form of a letter o indemnity.
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As part of a silent PPO scheme, insurers try to pass off the discount as legitimate on Explanation of Benefit [EOB] forms. Physicians should not fall for this ploy, since pricing pressure will be forced even lower in the next round of “real” PPO negotiations!
Medical providers should also be on guard for silent HMOs, MCOs and any other silent insurance variation, since these virtual organizations do not exist, except as exploitable arbitrage situations for the middleman.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on August 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Bonds: Long-term Treasury yields rose and short-term yields fell after President Trump fired Fed Governor Lisa Cook opening the gap between 5-year and 30-year yields to its widest point in three years.
Stocks: Equities barely budged on the latest FOMC drama with investors’ attention fully focused on Nvidia earnings tomorrow afternoon.
Trade Craft: President Trump vowed retaliation against countries that apply a digital services tax against US tech companies. He may also slap a 200% tariff on China if that country restricts trade on rare earth magnets.
Posted on August 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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Types of investments
Once a physician [MD, DO, DPM or DDS] has a brokerage account, the young doctior will need to decide what to invest in. There are lots of options, and each comes with different benefits and drawbacks. Here are some of the most common options for new physician investors.
Stocks are the first thing most people think about when they are considering investing, but they are not the only option. The prices of stocks change daily, sometimes by large amounts, as the market adjusts to news and various cycles. For that reason, it’s important to do your research. If you’re just beginning with a retirement account, you could also consider the longer-term products listed below.
Index funds and mutual funds.
Index funds attempt to replicate the performance of an un-managed market index. The performance of mutual funds [open and closed] varies. You can often get involved for a lower initial investment, and they can provide good diversification,which makes your portfolio better equipped to handle market fluctuations [active and passive].
For that reason, many financial experts say they should form the core of your retirement portfolio. While they have many similar characteristics, there are important differences. Read more about some of the differences in index funds and mutual funds.
These technically aren’t investment products; they are a contract between you and an insurance company. However, they work to accomplish a similar goal. There are immediate annuities that convert some of your existing savings into lifetime payments, but if we’re talking about saving for retirement, a deferred income annuity is the closest comparison. You make premium payments into the deferred annuity on a regular or irregular basis depending on the contract terms, and when you reach retirement age, you annuitize those savings and receive payments for the rest of your life. They can make a valuable addition to a retirement savings strategy.
Other investments.
There are many other types of investments and financial vehicles: bonds [local, state or US], money market funds, certificates of deposit through a brokerage account or investment apps. Even the cash value of life insurance can play a part. They are all designed to address different needs and have benefits and drawbacks and may be important to your overall strategy.
Crypto.com is a cryptocurrency company based in Singapore that offers various financial services, including an app, exchange, and noncustodial DeFi wallet, NFT marketplace, and direct payment service in cryptocurrency. As of 2024, the company reportedly had more than 100 million customers and more than 4,000 employees.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
The so-called money factor (abbreviated as MF on invoices) is a number in a decimal form that dealers use to calculate the APR of a car lease. It’s a major part of your monthly payment and dealers are known to jack up the money factor to pad their profits.
Most doctors don’t ask to see it because they’re not aware of it or don’t know how to calculate it. Ask to see the money factor, then multiply it by 2,400.
For example, if the money factor is .00150, you multiply it by 2,400 to get 3.6%. If that’s higher than the prevailing rate, you have room to talk them down.
How to reduce it
So how do you get a good interest rate when you lease a vehicle? The same way you do when borrowing for any other reason, whether it’s buying a home or applying for a personal loan: by having good credit. This may reduce your interest rate because you’ll represent a lower risk to a lender.
A high residual value on the car could also help you get a better interest rate. A higher residual value means you’d have lower monthly payments because there would be less depreciation on the vehicle. Since interest is applied to your monthly payment, a lower monthly payment would equate to reduced interest charges.
The money factor is one of the many numbers you may want to learn about when leasing a car. It’s one of the transactional costs that come with leasing, and allows dealers and finance companies to make a profit on every lease they execute. As a consumer, it’s a smart idea to learn the financial implications of this number and how it’ll affect your overall costs over the course of a multi-year lease.
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If the interest rate is too high, you may need to shop around for a better rate, negotiate with the dealer or lender to lower the money factor, or consider leasing another vehicle that’s more in line with your budget. Either way, make sure you explore all your financial options before taking a car off the lot.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Net worth is everything you own of significance (Assets) minus what is owed in debts (Liabilities). Assets include cash and investments, real estate, cars and anything else of value.
How is net worth calculated? Assets – Debt = Net Worth. Net worth is calculated by adding all owned assets (anything of value) and then subtracting all of your liabilities.
Is net worth yearly? No, net worth is not yearly. Net worth isn’t inherently yearly but is often tracked on an annual basis to assess financial progress year over year.
What net worth is considered wealthy, rich and upper class? In the U.S. salary average is around $59,000, and only 20% of Americans have a household income of $100,000 or more.
Is net worth the same as net income? No, net worth is not the same as net income. Net income is what you actually bring home after taxes and payroll deductions, like Social Security and 401(k) contributions.
Can one measure their net worth if they don’t have many assets or a high income? Yes. Knowing your net worth isn’t about the amount you have; it’s about understanding your financial position. It helps you track your progress, informs your financial decisions, and motivates you to improve your financial health, regardless of where you start.
Stocks: The stock markets rose today after Jerome Powell opened the door to interest rate cuts. The Dow soared to a new all-time high, while small-cap stocks in the Russell 2000 had a banner day.
Bonds: Yields fell while the chances of a rate cut after the Fed’s next meeting in September rose to 83%.
Commodities: Gold rose on rate cut hopes while oil fell as peace talks between Ukraine and Russia stalled. But the biggest winner is coffee: prices have risen for six straight days to cap off its biggest weekly gain since 2021.
A SPECIAL MEDICAL-EXECUTIVE-POST GUEST PRESENTATION
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What Is a Special Purpose Vehicle (SPV)?
A special purpose vehicle is a subsidiary created by a parent company to isolate financial risk. It’s also called a special purpose entity (SPE). Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt. A special purpose vehicle is sometimes referred to as a bankruptcy-remote entity for this reason.
These vehicles can become a financially devastating way to hide company debt if accounting loopholes are exploited, as seen in the 2001 Enron scandal.
US government mulls 10% stake in Intel as Softbank invests $2b.
According to Morning Brew, Bloomberg and the Wall Street Journal reported recently that the government is considering becoming one of the beleaguered chipmaker’s biggest shareholders by converting grants the company was given under the Biden-era Chips Act into an equity stake.
At Intel’s current valuation, a 10% stake would be worth ~$10.5 billion—though the exact size of the stake and whether the government will move forward with the plan remains to be determined.
Meanwhile, over in the private sector, Softbank agreed to buy $2 billion worth of Intel stock, giving it a ~2% stake. Intel has been trying to turn itself around after losing ground to other semiconductor companies
Posted on August 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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In today’s dynamic economic landscape, the concept of a “side hustle” has evolved from a mere trend to an essential component of personal financial strategy for many individuals; even doctors.
A side hustle is a way to earn extra income outside of your primary job or main source of employment. It typically involves part-time work, freelancing, small businesses, or gig-based activities that can be pursued flexibly in your free time. Unlike traditional employment, side hustles often offer more autonomy, creative freedom, and the potential to monetize skills, hobbies, or passions.
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Doctor Gigs?
So, if you’re a doctor, dentist or podiatrist considering a side hustle, focus on something sustainable and long-term. Ask yourself: What am I already good at? What do people already ask me to help with? The best side hustles don’t require reinventing the wheel — just monetizing the one you’ve already been pushing uphill.
But, avoid gigs that require a huge upfront investment or promise overnight success. Instead, look for something that offers flexibility, ideally something that works with your schedule, not against your sanity.
Track your earnings and how much time you’re putting in. Side income should support your goals, whether that’s paying off debt, saving for a trip or just breathing easier when office rent comes due.
But, if it’s draining your energy from your medical practice with little to show for it, it might be time to rethink the hustle.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
UnitedHealth Group soared almost 12%, its biggest one-day gain in nearly five years, after getting the “Buffett Bounce.” Buffett’s Berkshire Hathaway revealed it bought ~5 million shares worth nearly $1.6 billion, giving a much-needed vote of confidence to the struggling health giant.
The White House is considering buying part of Intel, Bloomberg reported this week, which would be the latest big business deal the president pursues on behalf of the government. The Trump administration might acquire a stake in the struggling computer chip-maker using CHIPS Act funding—nearly $11 billion of which was already earmarked for Intel.
Saudi Arabia’s Public Investment Fund took an $8 billion write-down on five mega-projects it’s building, due to lower oil prices and higher costs.
Pimco, the asset management giant, warned that President Trump’s plan to IPO Fannie Mae and Freddie Mac could push mortgage rates higher.
An important component of hospital credit analysis is essentiality. Hospitals are unusual businesses that many times possess some form of essentiality to their communities. Health care is important to the economic vitality of every community. Many hospitals have served their communities for many years; it is not uncommon to find hospitals that have been continuously operating for more than 100 years in the same community.
Most hospitals are not-for-profit. In not-for-profit hospitals, no private party actually “owns” the hospital; control is vested in various boards, but no one explicitly owns a not-for-profit hospital. In a broad sense, communities own not-for-profit hospitals. They are considered “charities” with a “charitable purpose.” Though a not-for-profit hospital may not have owners, it has many “stakehold-ers,” parties that have vested interests in the continuing success of the hospital.
Many hospitals have broad and vast webs of stakeholders. Stakeholders are why hospitals rarely close or are shut down. Too many stakeholders have interests in the continuing successful operation of hospitals.
Another dimension of the essentiality analysis is service analysis. How significant are the hospital’s services? If the hospital shuts down, what population segments would suffer? How significant is the population that would suffer? How much would they suffer?
And so, hospital stakeholder relationships need to be considered in the analysis of essentiality. How strong are these relations? How many are there? How important is the continuing success of this hospital to these stakeholders?
Analysis of hospital’s stakeholders and services should provide a credible view of the degree of essentiality associated with a hospital. Higher degrees of essentiality suggest higher likelihoods that hospitals, one way or another, will meet their commitments, particularly their payment commitments.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
A Johns Hopkins University study, by Michael J. Klag MD in 1997, found that physicians in some specialties — chiefly psychiatry and surgery — are at higher risk for divorce than their medical brethren in other fields. But, the results did not support the common view that job-related anxiety and depression are linked to marital breakup. Alerting medical students to the risks of divorce in some specialties may influence their career choices and strengthen their marriages whatever field they choose. The study, supported by the National Institutes of Health [NIH], was published in the March 13th issue of The New England Journal of Medicine. Results also strongly suggested that the high divorce risk in some specialties may result from the inherent demands of the job as well as the emotional experiences of physicians who enter those fields.
For example, the Hopkins team assessed the specialty choices, marriage histories, psychological characteristics, and other career and personal factors of 1,118 physicians who graduated from The Johns Hopkins University School of Medicine from 1948 through 1964. Over 30 years of follow-up, the divorce rate was 51 percent for psychiatrists, 33 percent for surgeons, 24 percent for internists, 22 percent for pediatricians and pathologists, and 31 percent for other specialties. The overall divorce rate was 29 percent after three decades of follow-up and 32 percent after nearly four decades of follow-up.
Physicians who married before medical school graduation had a higher divorce rate than those who waited until after graduation (33 percent versus 23 percent). The year of first marriage was linked with divorce rates: 11 percent for marriages before 1953, 17 percent for those from 1953 to 1957, 24 percent for those from 1958 to 1962 and 21 percent for those after 1962. Those who had a parent die before medical school graduation had a lower divorce rate.
Female physicians had a higher divorce rate (37 percent) than their male colleagues (28 percent). Physicians who were members of an academic honor society in medical school had a lower divorce rate, although there was no difference in divorce rates according to class rank. Religious affiliation, being an only child, having a parent who was a physician and having a divorced parent were not associated with divorce rates. Physicians who reported themselves to be less emotionally close to their parents and who expressed more anger under stress also had a significantly higher divorce rate, but anxiety and depression levels were not associated with divorce rates.
*Cite: Co-authors of the study, which was part of the Johns Hopkins Precursors Study, an ongoing, prospective study of physicians from the Hopkins medical school graduating classes of 1948 through 1964, were lead author Bruce L. Rollman, M.D., Lucy A. Mead, Sc.M., and Nae-Yuh Wang, M.S.
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The Painful Truth
In their article “The Painful Truth: Physicians Are Not Invincible” [1] Miller and McGowen state that divorce rates among physicians have been reported to be 10% to 20% higher than those in the general population. They explain that for many years in pre-med college, medical school, and residency, physicians focus on getting through the next hurdle. They may postpone the pleasures of life that others enjoy. Compulsive traits that allow them to postpone enjoyment may have the unwanted consequence of leading to more distant relationships., thus placing strain on intimate relationships.
A 2002 study looking at dual physician marriages found they have a relatively low divorce rate of 11%. “They’re a happily married cohort,” says Dr Wayne Sotile of the Sotile Cetner for Resilience (www.sotile.com). “They’re more compassionate about the passion for the career — they understand the calling because they share it.”
A study published in The New England Journal of Medicine in 1997 with Bruce L. Rollman as the lead researcher [2] found that physicians in some specialties — chiefly psychiatry and surgery — are at higher risk for divorce than their medical brethren in other fields. Alerting medical students to the risks of divorce in some specialties may influence their career choices and strengthen their marriages whatever field they choose.
The study suggested that the high divorce risk in some specialties may result from the inherent demands of the job as well as the emotional experiences of physicians who enter those fields. The divorce rate was 51 percent for psychiatrists, 33 percent for surgeons, 24 percent for internists, 22 percent for pediatricians and pathologists, and 31 percent for other specialties.
The overall divorce rate was 29 percent after three decades of follow-up and 32 percent after nearly four decades of follow-up. Physicians who married before medical school graduation had a higher divorce rate than those who waited until after graduation (33 percent versus 23 percent). Female physicians had a higher divorce rate (37 percent) than their male colleagues (28 percent).
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References:
Miller, M. N., McGowen, R., 2000, “The painful truth: Physicians are not invincible,” Southern Medical Journal, 93: 966-973.
Rollman BL, Mead LA, Wan NY, Klag MJ. Medical specialty and the incidence of divorce. N Engl J Med. 1997;336:800–3
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
According to Wikipedia, Phantom debt or zombie debt is a debt that is old, defaulted, or not owed and is somehow still being pursued for collection to be paid by the presumed debtor. It generally refers to debt that is more than 3 years old, is long forgotten about or belonged to someone else – like someone with the same name or a deceased parent. The amount owed can grow to hundreds or thousands of dollars more than what was originally owed.
An example of this is from George Miller. George missed an 11 cent Verizon bill and seven years later it had grown to $4,000.00.
Sometimes it was never owed, was owed by a deceased parent, or that was previously owed by the presumed debtor, but was previously paid in full, settled, discharged via bankruptcy or a dismissed court case, is beyond the statute of limitations, or is otherwise not legally collectible, but that a collection agency or other similar service is aggressively attempting to collect, often fraudulently.
While the concept of phantom debt is quite old, it has gotten a lot of attention since the 1990s.
Very often, collectors of phantom debt use intimidating, abusive, or otherwise illegal tactics in an attempt to collect phantom debt that include frequent phone calls, calls to the victim’s place of employment, or threats of scary consequences against the victim that sometimes include arrest and/or criminal prosecution. In the USA, such tactics violate the Fair Debt Collection Practices Act [FDCPA]
The source of phantom debt may be from collectors who buy the debt from other collectors for pennies on the dollar, some of which take action that is not legal in order to collect that debt. Unlawful techniques used include suing or threatening to sue, re-aging the debt on the victim’s credit report to circumvent limits on reporting, or falsely promising to remove a negative credit report entry in exchange for a partial payment.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Doctors and dentists earn money by treating patients. CPAs and Attorneys have clients, and retail stores buy items low and sell them at higher prices. This is called a business model.
More formally, a business model identifies the products or services the business plans to sell, the target market, and any anticipated expenses, in order to outline how to generate a profit. Business models are important for both new and established businesses. They help companies attract investment, recruit talent, and motivate management and staff.
Businesses should regularly update their business model, or they’ll fail to anticipate trends and challenges ahead. Business models also help investors to evaluate companies that interest them and employees to understand the future of a company they may aspire to join.
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The Business Model of Pharmacy Benefits Managers
In the United States, health insurance providers often hire a third party to handle price negotiations, insurance claims, and distribution of prescription drugs. Providers that use such pharmacy benefit managers include commercial health plans, self-insured employer plans, Medicare Part D [drug] plans, the Federal Employees Health Benefits Program, and state government employee plans. PBMs are designed to aggregate the collective buying power of en-rollees through their client health plans, enabling plan sponsors and individuals to obtain lower prices for their prescription drugs. PBMs negotiate price discounts from retail pharmacies, rebates from pharmaceutical manufacturers, and mail-service pharmacies which home-deliver prescriptions without consulting face-to-face with a pharmacist.
Pharmacy benefit management companies can make revenue in several ways.
First, they collect administrative and service fees from the original insurance plan.
Then, they can also collect rebates from the manufacturer.
Traditional PBMs do not disclose the negotiated net price of the prescription drugs, allowing them to resell drugs at a public list price (also known as a sticker price), which is higher than the net price they negotiate with the manufacturer. This practice is known as “spread pricing”. The industry argues that savings are trade secrets. Pharmacies and insurance companies are often prohibited by PBMs from discussing costs and reimbursements. This leads to lack of transparency.
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Therefore, states are often unaware of how much money they lose due to spread pricing, and the extent to which drug rebates are passed on to en-rollees of Medicare plans. In response, states like Ohio, West Virginia, and Louisiana have taken action to regulate PBMs within their Medicaid programs.
For instance, they have created new contracts that require all discounts and rebates to be reported to the states. In return, Medicaid pays PBMs a flat administrative fee.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on August 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.
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Stocks: Markets struggled to pick a direction as investors took a wait-and-see approach ahead of today’s CPI reading—even as Wall Street worries about the data’s reliability.
Trade: President Trump asked China, the world’s largest soybean buyer, to quadruple its soybean purchases from the US. He also extended the trade war truce with China by 90 days
Commodities: Gold had its worst day in three months as traders waited for the White House to clarify its new tariffs on the key commodity—only for Trump to announce that it won’t be tariffed at all. Meanwhile, Chinese battery giant CATL halted operations at a mine that produces 4% of the world’s lithium, sending prices of the precious metal soaring.
Posted on August 9, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I.and Staff Reporters
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President Trump is set to sign an executive order allowing alternative assets such as cryptocurrency, private equity investments, and real estate in 401(k) accounts. Those accounts are a veritable gold mine—Americans have stashed approximately $12.5 trillion away for retirement, and alternative asset managers have been chomping at the bit to get a piece of that pie.
According to Brew Markets, the changes have been a long time coming. All the way back in his first term, Trump ordered the Labor Department to review how to incorporate private equity investments into retirement accounts, an effort that was later reversed under President Biden. This latest move expands beyond private equity, coinciding with Trump’s push to bring crypto mainstream.
Proponents argue that alternative assets in 401(k) accounts will enhance investment diversification and could provide retirees with greater profits. Detractors note that these assets are less liquid, less transparent, and generally more risky than investing retirement funds into publicly traded stocks and bonds.
In the early 1980s, Daniel Kahneman and Amos Tverskey proved in numerous experiments that the reality of decision making differed greatly from the assumptions held by economists. They published their findings in Prospect Theory: An analysis of decision making under risk, which quickly became one of the most cited papers in all of economics.
To understand the importance of their breakthrough, we first need to take a step back and explain a few things. Up until that point, economists were working under a normative model of decision making. A normative model is a prescriptive approach that concerns itself with how people should make optimal decisions. Basically, if everyone was rational, this is how they should act.
Amanda, an RN 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 Financial Advisor 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.”
According to colleague Eugene Schmuckler PhD MBA MEd CTS, 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.
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.
CITE: Jaan E. Sidorov MD [Harrisburg, PA]
Assessment
Much like in healthcare today, the current mass-customized approaches to the financial services industry fall short of recognizing more personalized advisory approaches like prospect theory and assisted client-centered investment decision-making.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
THE ADDICTIVE INVESTING / TRADING PERSONALITY OF DOCTORS
Dr. Donald J. Mandell, a pediatrician, always needs to leave the office fifteen minutes ahead of schedule. The reason is because it takes that long to make the necessary number of trips to ensure the front door is truly locked.
Dr. Kamela A. Shaw, a general surgeon, is constantly rushing to the bath room so that she can wash her hands. As far as she is concerned, it is not possible to get one’s hands clean enough considering the COVID pandemic or recent influenza outbreak.
Although the behaviors displayed by these two doctors are different, they are consistent in that each, to some degree, display behavior that might be called an obsessive-compulsive disorder [OCD].
An obsession is a persistent, recurring preoccupation with an idea or thought. A compulsion is an impulse that is experienced as irresistible.
Obsessive-compulsive individuals feel compelled to think thoughts that they say they do not want to think or to carry out actions that they say are against their will. These individuals usually realize that their behavior is irrational, but it is beyond their control. In general, these individuals are preoccupied with orderliness, perfectionism, and mental and interpersonal control, at the expense of flexibility, openness, and efficiency. Specifically, behaviors such as the following may be seen:
Preoccupation with details.
Perfectionism that interferes with task completion.
Excessive devotion to work and office productivity.
Scrupulous and inflexible about morality (not accounted for by cultural or religious identification);
Inability to discard worn-out or worthless objects without sentimental value;
Reluctance to delegate tasks or to work with others.
Adopts a miserly spending style toward both self and others.
Demonstrates a rigid, inflexible and stubborn nature.
Most people resort to some minor obsessive-compulsive patterns under severe pressure or when trying to achieve goals that they consider critically important. In fact, many individuals refer to this as superstitious behavior. The study habits required for medical students entail a good deal of compulsive behavior.
As the above examples suggest, there are a variety of addictions possible. Recent news accounts have pointed out that even high-level governmental officials can experience sex addiction. The advent of social-media has led to what is referred to as Internet addiction where an individual is transfixed to a computer, tablet PC or smart-phone, “working” for hours on end without a specific project in mind. The simple act of “surfing”, “tweeting-X”, “texting” or merely posting opinions offers the person afflicted with the addiction some degree of satisfaction.
Still another form of addictive behavior is that of the individual with gambling disorder (GD).
GD is recognized as a mental disorder in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders-V. This is the behavior of an individual who is unable to resist the impulse to gamble. Many reasons have been posited for this type of behavior including the death instinct; a need to lose; a history of trauma; a wish to repeat a big win; identification with adults the “gambler” knew as an adolescent; and a desire for action and excitement. There are other explanations offered for this form of compulsive behavior. The act of betting allows the individual to express an immature bravery, courage, manliness, and persistence against unfavorable odds. By actually using money and challenging reality, he puts himself into “action” and intense emotion. By means of gambling, the addicted individual is able to pretend that he is favored by “lady luck,” specially chosen, successful, able to beat the system and escape from feelings of discontent.
Greed can also have addictive qualities. In fact, a poll conducted by the Chicago Tribune revealed that folks who earned less than $30,000 a year, said that $50,000 would fulfill their dreams, whereas those with yearly incomes of over $100,000 said they would need $250,000 to be satisfied. More recent studies confirm that goals keep getting pushed upward as soon as a lower level is reached.
Edward Looney, executive director of the Trenton, New Jersey based Council on Compulsive Gambling (CCG) reports that the number of individuals calling with trading-associated problems is doubling annually. In the mid 1980s, when the council was formed, the number of people calling the council’s hotline (1 – 800 Gambler) with stock-market gambling problems was approximately 1.5 percent of all calls received. In 1998 that number grew to 3 percent, and rose to 8 percent by 2012. Today, that number is largely unknown because of its pervasiveness, but Dr. Robert Custer, an expert on compulsive gambling reported, that stock market gamblers represent over 20 percent of the gamblers that he has diagnosed. It is evident that on-line trading presents a tremendous risk to the speculator.
The CCG describes some of the consequences:
Dr. Fred B. is a 43-year-old Asian male physician with a salary above $150,000 and in debt for more than $150,000. He is married with two children. He was a day trader.
Michael Q. is a 28-year-old Hispanic male registered nurse. He is married and the father of one (7 month old) child. He earns $65,000 and lost $50,000 savings in day trading and is in debt for $30,000. He has suicidal ideation.
[B] A Question of Suitability
Since online traders are in it for many reasons, investment suitability rarely enters the picture, according to Stuart Kaswell, general counsel of the Securities Industry Association, in Washington, DC. The kind of question that has yet to be confronted, by day or online trading firms, is a statement, such as: “Equities look good this year. We favor technology stocks. We have a research report on our Web page that looks at the social media industry.” Those kinds of things are seldom considered because they do not involve a specific recommendation of a specific stock, like Apple, Google, Groupon, Facebook or Twitter.
However, if a firm makes a specific recommendation to an investor, whether over the cell-phone, iPad®, fax machine, face-to-face, instagram or over the Internet, or Twitter-X, suitability rules should apply. Opining similarly on the “know your customer” requirements is Steven Caruso, of Maddox, Koeller, Harget & Caruso of New York City. “The on-line firms obviously claim that they do not have a suitability responsibility because they do not want the liability for making a mistake as far as determining whether the investor was suitable or buying any security. I think that ultimately more firms are going to be required to make a suitability, [or eventually fiduciary] determination on every trade”.
[C] On-line Traders and Stock Market Gamblers
Some of the preferred areas of stock market gambling that attract the interest of compulsive gamblers include options, commodities, penny stocks and bit-coins, index investing, new stock offerings, certain types of CAT bonds, crowd-sourcing initiatives, and some contracts for government securities. These online traders and investment gamblers think of themselves as cautious long-term investors who prefer blue chip or dividend paying varieties. What they fail to take into consideration is that even seemingly blue chips can both rise and precipitously drop in value again, as seen in the summer of 2003, the “crash” of 2008, or the “flash crash” of May 6, 2010. On this day, the DJIA plunged 1000 points (about 9%) only to recover those losses within minutes. It was the second largest point swing 1,010.14 points, and the biggest one-day point decline, 998.5 points, on an intraday basis in Dow Jones Industrial Average history.
Regardless of investment choice, the compulsive investment gambler enjoys the anticipation of following the daily activity surrounding these investments. Newspaper, hourly radio and television reports, streaming computer, tablet and smart phone banners and hundreds of periodicals and magazines add excitement in seeking the investment edge. The name of the game is action. Investment goals are unclear, with many participating simply for the feeling it affords them as they experience the highs and lows and struggles surrounding the play. And, as documented by the North American Securities Administrators Association’s president, and Indiana Securities Commissioner, Bradley Skolnik, most day or online traders lose money. “On-line brokerage was new and cutting edge and we enjoyed the best stock market in generations, until the crashes. The message of most advertisements was “just do it”, and you’ll do well. The fact is that research and common sense suggest the more you trade, the less well you’ll do”.
Most day or online traders are young males, some who quit their day jobs before the just mentioned debacles; or more recently with the dismal economy. Many ceased these risky activities but there is some anecdotal evidence that is re-surging again with 2013-14 technology boom and market rise. Most of them start every day not owning any stock, then buy and sell all day long and end the trading day again without any stock – – just a lot of cash. Dr. Patricia Farrell, a licensed clinical psychologist states that day traders are especially susceptible to compulsive behaviors and addictive personalities. Mark Brando, registered principal for Milestone Financial, a day trading firm in Glendale, California states, “People that get addicted to trading employ the same destructive habits as a gambler. Often, it’s impossible to tell if a particular trade comes from a problem gambler or a legitimate trader.”
Arthur Levitt, former Chairman of the Securities and Exchange Commission (SEC) in discussing the risks and misconceptions of investing are only amplified by on-line trading. In a speech before the National Press Club a few years ago, he attempted to impress individuals as to the risks and difficulties involved with day trading. Levitt cited four common misconceptions that knowledgeable medical professionals, and all investors, should know:
Personal computers, tablets, mobile devices and smart-phones are not directly linked to the markets – Thanks to Level II computer software, day traders can have access to the same up-to-the-second information available to market makers on Wall Street. “Although the Internet makes it seem as if you have a direct connection to the securities market, you don’t. Lines may clog; systems may break; orders may back-up.”
The virtue of limit orders – “Price quotes are only for a limited number of shares; so only the first few investors will receive the currently quoted price. By the time you get to the front of the line, the price of the stock could be very different.”
Canceling an order – “Another misconception is that an order is canceled when you hit ‘cancel’ on your computer. But, the fact is it’s canceled only when the market gets the cancellation. You may receive an electronic confirmation, but that only mean your request to cancel was received – not that your order was actually canceled”.
Buying on margin – “if you plan to borrow money to buy a stock, you also need to know the terms of the loan your broker gave you. This is margin. In volatile markets, investors who put up an initial margin payment for a stock may find themselves required to provide additional cash if the price of the stock falls.
How then, can the medical professional or financial advisor tell if he or she is a compulsive gambler? A diagnostic may be obtained from Gamblers Anonymous. It is designed to screen for the identification of problem and compulsive gambling.
But, it is also necessary to provide a tool to be used by on-line traders. This questionnaire is as follows:
1. Are you trading in the stock market with money you may need during the next year?
2. Are you risking more money than you intended to?
3. Have you ever lied to someone regarding your on-line trading?
4. Are you risking retirement savings to try to get back your losses?
5. Has anyone ever told you that spend too much time on-line?
6. Is investing affecting other life areas (relationships, vocational pursuits, etc.)?
7. If you lost money trading in the market would it materially change your life?
8. Are you investing frequently for the excitement, and the way it makes you feel?
9. Have you become secretive about your on-line trading?
10. Do you feel sad or depressed when you are not trading in the market?
NOTE: If you answer to any of these questions you may be moving from investing to gambling.
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The cost of compulsive gambling and day trading is high for the individual medical or lay professional, the family and society at large. Compulsive gamblers, in the desperation phase of their gambling, exhibit high suicide ideation, as in the case of Mark O Barton’s the murderous day-trader in Atlanta who killed 12 people and injured 13 more in July 29th 1999. His idea actually became a final act of desperation.
Less dramatically, for doctors, is a marked increase in subtle illegal activity. These acts include fraud, embezzlement, CPT® up-coding, medical over utilization, excessive full risk HMO contracting, Stark Law aberrations and other “white collar crimes.” Higher healthcare and social costs in police, judiciary (civil and criminal) and corrections result because of compulsive gambling. The impact on family members is devastating. Compulsive gamblers cause havoc and pain to all family members. The spouses and other family members also go through progressive deterioration in their lives.
In this desperation phase, dysfunctional families are left with a legacy of anger, resentment, isolation, and in many instances, outright hate.
[D] Day Trading Assessment
Internet day trading, like the Internet and telecommunications sectors, become something of a investment bubble a few years ago, suggesting that something lighter than air can pop and disappear in an instant. History is filled with examples: from the tulip mania of 1630 Holland and the British South Sea Bubble of the 1700’s; to the Florida land boom of the roaring twenties and the Great Crash of 1929; to the collapse of Japans stock and real estate market in early 1990’s; and to an all-time high of $1,926 for an ounce of commodity gold a few years ago.
Today it is Ask: $3,388.30 USD Bid: $3,367.30 USD
CONCLUSION
To this list, one might again include smart-phone or mobile day trading.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Trade: President Trump signed an executive order late yesterday unleashing a wave of new tariffs on 69 US trading partners that will go into effect on August 7th. Here’s a handy list of tariffs and their economic effects for anyone else having trouble keeping track of all these new numbers.
Markets: Stocks opened lower and kept falling thanks to a double whammy of new tariff rates and a shocking slowdown in the labor market, while bond yields tumbled.
Commodities: Goldjumped as the likelihood of a rate cut rose due to the latest jobs report, while oil sank on reports that OPEC+ may announce a crude production boost as soon as this weekend.
One of the major concepts that most investors should be aware of is the relationship between the risk and the return of a financial asset. It is common knowledge that there is a positive relationship between the risk and the expected return of a financial asset. In other words, when the risk of an asset increases, so does its expected return. What this means is that if an investor is taking on more risk, he/she is expected to be compensated for doing so with a higher return. Similarly, if the investor wants to boost the expected return of the investment, he/she needs to be prepared to take on more risk.
Harry Max Markowitz (August 24, 1927 – June 22, 2023) was an American economist who was a professor of finance at the Rady School of Management at UCSD. He is best known for his pioneering work in modern portfolio theory, studying the effects of asset risk, return, correlation and diversification on probable investment portfolio returns.
One important thing to understand about Modern Portfolio Theory (MPT) is Markowitz’s calculations treat volatility and risk as the same thing. In layman’s terms, Dr. Markowitz uses risk as a measurement of the likelihood that an investment will go up and down in value – and how often and by how much. The theory assumes that investors prefer to minimize risk. The theory assumes that given the choice of two portfolios with equal returns, investors will choose the one with the least risk. If investors take on additional risk, they will expect to be compensated with additional return.
According to MPT, risk comes in two major categories:
Systematic risk – the possibility that the entire market and economy will show losses negatively affecting nearly every investment; also called market risk
Unsystematic risk – the possibility that an investment or a category of investments will decline in value without having a major impact upon the entire market.
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Diversification generally does not protect against systematic risk because a drop in the entire market and economy typically affects all investments. However, diversification is designed to decrease unsystematic risk. Since unsystematic risk is the possibility that one single thing will decline in value, having a portfolio invested in a variety of stocks, a variety of asset classes and a variety of sectors will lower the risk of losing much money when one investment type declines in value. Thus putting together assets with low correlations can reduce unsystematic risks.
Although broad risks can be quickly summarized as “the failure to achieve spending and inflation-adjusted growth goals,” individual assets may face any number of other subsidiary risks:
Call risk – The risk, faced by a holder of a callable bond that a bond issuer will take advantage of the callable bond feature and redeem the issue prior to maturity. This means the bondholder will receive payment on the value of the bond and, in most cases, will be reinvesting in a less favorable environment (one with a lower interest rate)
Capital risk – The risk an investor faces that he or she may lose all or part of the principal amount invested.
Commodity risk – The threat that a change in the price of a production input will adversely impact a producer who uses that input.
Company risk – The risk that certain factors affecting a specific company may cause its stock to change in price in a different way from stocks as a whole.
Concentration risk – Probability of loss arising from heavily lopsided exposure to a particular group of counterparties
Counterparty risk – The risk that the other party to an agreement will default.
Credit risk – The risk of loss of principal or loss of a financial reward stemming from a borrower’s failure to repay a loan or otherwise meet a contractual obligation.
Currency risk – A form of risk that arises from the change in price of one currency against another.
Deflation risk – A general decline in prices, often caused by a reduction in the supply of money or credit.
Economic risk – the likelihood that an investment will be affected by macroeconomic conditions such as government regulation, exchange rates, or political stability.
Hedging risk – Making an investment to reduce the risk of adverse price movements in an asset.
Inflation risk – The uncertainty over the future real value (after inflation) of your investment.
Interest rate risk – Risk to the earnings or market value of a portfolio due to uncertain future interest rates.
Legal risk – risk from uncertainty due to legal actions or uncertainty in the applicability or interpretation of contracts, laws or regulations.
Liquidity risk – The risks stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.
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 an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on July 29, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Stocks: Investors cheered the news of an EU & US trade deal over the weekend, pushing the S&P 500 above 6,400 for the first time ever. But the index gave up most of its gains late in the day as attention turned to a huge week of data ahead (more on that in a minute).
Trade: Today was the first day of discussions between US and Chinese negotiators in Stockholm to keep the trade war truce alive. Elsewhere, President Trump foresees a baseline 15% to 20% tariff rate for the rest of the world.
Commodities: Gold fell as trade deal hopes heightened investors’ risk appetite, while oil spiked higher after Trump gave Russia a 10- to 12-day deadline to sign a truce with Ukraine.
According to Bloomberg, 83% of the S&P 500 companies that have reported earnings have outpaced Wall Street’s estimates, putting the index on pace for its best season of beats since the second quarter of 2021.
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