BOARD CERTIFICATION EXAM STUDY GUIDES Lower Extremity Trauma
[Click on Image to Enlarge]
ME-P Free Advertising Consultation
The “Medical Executive-Post” is about connecting doctors, health care executives and modern consulting advisors. It’s about free-enterprise, business, practice, policy, personal financial planning and wealth building capitalism. We have an attitude that’s independent, outspoken, intelligent and so Next-Gen; often edgy, usually controversial. And, our consultants “got fly”, just like U. Read it! Write it! Post it! “Medical Executive-Post”. Call or email us for your FREE advertising and sales consultation TODAY [678.779.8597] Email: MarcinkoAdvisors@outlook.com
Medical & Surgical e-Consent Forms
ePodiatryConsentForms.com
iMBA Inc., OFFICES
Suite #5901 Wilbanks Drive, Norcross, Georgia, 30092 USA [1.678.779.8597]. Our location is real and we are now virtually enabled to assist new long distance clients and out-of-town colleagues.
ME-P Publishing
SEEKING INDUSTRY INFO PARTNERS?
If you want the opportunity to work with leading health care industry insiders, innovators and watchers, the “ME-P” may be right for you? We are unbiased and operate at the nexus of theoretical and applied R&D. Collaborate with us and you’ll put your brand in front of a smart & tightly focused demographic; one at the forefront of our emerging healthcare free marketplace of informed and professional “movers and shakers.” Our Ad Rate Card is available upon request [678-779-8597].
Leverage ratios measure the amount of capital that comes from debt. In other words, leverage financial ratios are used to evaluate a company’s debt levels. Common leverage ratios include the following:
The debt ratio measures the relative amount of a company’s assets that are provided from debt:
Debt ratio = Total liabilities / Total assets
The debt to equity ratio calculates the weight of total debt and financial liabilities against shareholders’ equity:
Debt to equity ratio = Total liabilities / Shareholder’s equity
Separate Account Management offers medical professionals customized personal money management services. In the typical separate account structure, a money manager invests the individual’s assets in stocks and bonds (as opposed to mutual funds providing exposure to specific asset classes) on a discretionary basis.
For physicians and healthcare providers with significant investment assets (e.g., $100,000), a separately managed portfolio can be customized to reflect their tax situation, social investment guidelines, and cash flow needs.
An additional benefit of the separate account management structure is that a client’s portfolio may be positioned over time as opportunities arise, rather than forcing stocks into the portfolio without regard to current conditions.
Although separate account management generally offers a higher degree of customization than mutual funds, fees for separate account management are generally consistent with mutual funds fees, especially given that separate account managers may discount their fees for larger portfolios.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Dying Broke. It’s a goal for those retirees who embrace the idea of spending their hard-earned wealth during their lifetimes. Their aim is to enjoy the fruits of their labor while they can and spend the last penny just as they take their last breath. The concept feels both pragmatic and poetic.
But here’s the twist: While the concept may conjure images of lavish spending sprees and exotic vacations, that’s rarely what I see in practice. Many of my clients who identify as Die Brokers aren’t recklessly burning through their wealth. In fact, the opposite is often true.
This is because their approach to spending and giving is shaped by a lifetime of frugal money scripts that are incredibly hard to shake. Many Boomers grew up with financial uncertainty, learning to save and sacrifice to protect themselves and their families. Even after decades of financial success, those habits don’t just disappear. The idea of “spending down” their wealth, even intentionally, feels unnatural and irresponsible. There is an internal tug-of-war between their stated desire to enjoy their wealth and their deeply rooted fear of running out.
This paradox can significantly affect retirees’ financial planning. While Die Brokers may express a strong commitment to living fully, their money behavior often reveals a need for reassurance that their money will last for their lifetime.
For many Boomers, including myself, those frugal money scripts have served us well for decades. They’ve provided financial stability and peace of mind. But in this stage of life, they can also hold us back from experiencing the freedom we’ve worked so hard to achieve—especially in the time we have left when we can still physically enjoy it. The challenge is finding balance, honoring the values that got us here while allowing ourselves permission to live fully.
Here are four ways to start turning those old money scripts into permission to spend and give intentionally:
Reframe wealth as a tool rather than a safety net. Recognize that money is about opportunity as well as security. Spending with intention can bring joy and meaning, whether it’s funding a family trip, supporting a cause, or splurging on a bucket list item.
Work with your financial advisor to analyze your retirement spending and the probability of running out of money. The amount they suggest you can spend may surprise you—it’s often far higher than your frugal money scripts would lead you to believe.
Experiment with incremental giving. If parting with your wealth feels daunting, start small. Gift modest amounts to family, friends, or charities and notice how it feels. Seeing the immediate impact of your generosity can help ease the transition and loosen the grip of those old money scripts.
Set intentional spending goals instead of vaguely aiming to “enjoy your wealth.” Identify specific ways you want to use your money to enhance your life or the lives of others. Having a clear plan can turn spending into a meaningful act rather than an exercise in guilt.
For many of us, the Die Broke mentality is not about recklessness or extravagance. It’s about learning to let go. Despite our bold talk of spending down to the last penny, most of us will likely leave behind more than we planned. And maybe that’s just fine—especially for our kids and grand kids. Perhaps being a Die Broker is really about giving ourselves permission to live with intention, to savor what we’ve built, and to enjoy living to the fullest the rich life our frugality has helped provide.
Posted on March 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
***
***
Suppose, as a medical or nursing school student, or new practitioner, you want to invest in a company, but its stock price may be higher than what you want, or can afford, to pay.
Instead of buying a whole share of stock, you can buy a fractional share, which is a “slice” of stock that represents a partial share, for very little money (ie., $5 at Charles Schwab).
***
***
Example: If a company’s stock is selling at $1,000 a share and you were buying $200 worth of it, you would own 0.2 (20%) of a share. With stock slices, investing has never been more accessible.
Posted on March 2, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Copilot
***
***
The “Magnificent Seven” refers to a group of seven technology giants that have significantly influenced the stock market. These companies are:
Alphabet (GOOGL)
Amazon (AMZN)
Apple (AAPL)
Meta Platforms (META)
Microsoft (MSFT)
Nvidia (NVDA)
Tesla (TSLA)
Why Are They Significant?
These companies are at the forefront of technological innovation, driving advancements in artificial intelligence, cloud computing, e-commerce, social media, and electric vehicles. Their market dominance and financial performance have a substantial impact on major stock indices like the S&P 5002.
Performance
Alphabet: Despite a 31% climb over the past year, Alphabet remains the cheapest of the group, trading at 20 times forward earnings estimates.
Amazon: Amazon’s cloud unit is delivering an annual revenue run rate of $115 billion thanks to its AI offerings.
Apple: Apple has seen a 989% total return for investors over the past decade.
Meta Platforms: Meta is the best-performing stock year-to-date among the Magnificent Seven, up over 25%.
Microsoft: Microsoft has generated a 989% total return for investors over the past decade.
Nvidia: Nvidia remains the best performer over the past year, up 55%.
Tesla: Tesla is the worst-performing stock in the group for 2025, down 25.66% year-to-date.
These companies have reshaped industries and become powerhouses in the global economy, wielding significant influence over market trends and investor sentiment.
If the definition of a security is title to a stream of cash flows, then the dividends a company is expected to pay to equity shareholders on a periodic basis (e.g., quarterly) are a clear source of return for an investor. A dividend is simply a distribution of (some portion of) the company’s earnings to equity shareholders. Like a bond yield, a stock’s dividend yield can be used to measure the income return on the stock.
To determine a stock’s dividend yield, the trailing year’s dividends per share paid are divided by the current stock price. However, a key difference between a dividend yield and a bond yield is the level of certainty that can be assumed regarding future payments, since a bond’s coupon is generally predetermined and its payment is expected to be senior to the payment of dividends.
After a company has determined that it has earned a profit, management has to decide what to do with those profits. One choice is to distribute the earnings to shareholders in the form of dividends, while another option is to reinvest the profits in the company. A company’s management may determine that the shareholders interest is best served by using the earnings to pursue growth opportunities (e.g., capital expansion, research & development, etc.) at the corporate level. Thus, when management believes that its investment opportunities are likely to produce a higher return than what investors’ could generate with their dividends or that reinvestment is needed to maintain its financial strength, the company will retain the earnings.
One of the biggest myths in investing is capital appreciation accounts for the largest part of investors’ gains. Dividends, or cash payments to shareholders, actually account for a substantial part of an equity investor’s total return. In fact since 1926, dividends have accounted for more than 40% of the total return of the S&P 500 stock index. In the last decade (2000-2009), the S&P 500’s total return of -9% would have been a heftier loss of -24% had it not been for the 15% contribution from dividends.
History has shown that dividends have been a powerful source of total return in a diversified investment portfolio, especially during periods of market turbulence. In examining the prior eight decades of stock market performance, dividends often account for more than 2/3 of the total return (1930s, 1940s, 1970s, & 2000s). If an investor avoided dividend paying stocks during these elongated time periods, most of the total gains would be lost.
***
DIVIDEND CONTRIBUTION OF S&P 500 RETURN BY DECADE
S&P 500
Cumulative
Dividends
Average
Price %
Dividend
Total
% of Total
Payout
Years
Change
Contribution*
Return
Return
Ratio**
1930s
-41.9%
56.0%
14.1%
>100%
90.1%
1940s
34.8%
100.3%
135.0%
74.3%
59.4%
1950s
256.7%
180.0%
436.7%
41.2%
54.6%
1960s
53.7%
54.2%
107.9%
50.2%
56.0%
1970s
17.2%
59.1%
76.4%
77.4%
45.5%
1980s
227.4%
143.1%
370.5%
38.6%
48.6%
1990s
315.7%
117.1%
432.8%
27.0%
47.6%
2000s
-24.1%
15.0%
-9.1%
>100%
35.3%
2010s
27.9%
8.4%
36.3%
23.1%
28.4%
as of 12/31/12
Source: Strategas
During those decades such as the 2000s where the stock market struggled to advance, dividends were a significant element for investor survival. This is not only due to the dividends alone, but also the risk element of stocks that pay dividends. Dividend stocks have historically provided lower overall volatility and stronger downside protection when markets decline. Since 1927, dividend stocks have consistently held up better than the broader market during downturns. You can measure downside risk through a statistic known as downside capture ratio.
Downside capture ratio is a statistical measure of overall performance in a down stock market. An investment category, or investment manager, who has a down-market ratio less than 100 has outperformed the index during a falling stock market.
For example, a down-market capture ratio of 80 indicates that the portfolio measure declined only 80% as much as the index during the period. The downside capture ratio of high-dividend-yielding stocks, since 1927, has been 81% or lower over various long-term periods. Put a better way, during months that the S&P 500 stock index fell, dividend stocks declined by nearly 19% less than the broader market.
***
DOWNSIDE AND UPSIDE CAPTURE RATIOS OF HIGH DIVIDEND STOCKS – 1927 TO 2011
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
In 1972, Nobel Laureate Kenneth J. Arrow, PhD shocked academe’ by identifying health economics as a separate and distinct field. Yet, the seemingly disparate insurance, tax, risk management and financial planning principles that he also studied are just now becoming transparent to some medical professionals and their financial advisors. Despite the fact that a basic, but hardly promoted premise of this new wave financial planning era, is imprecision.
Nevertheless, to informed cognoscenti like Certified Medical Planners™, the principles served as predecessors to the modern physician-focused financial advisory niche sector. In 2004, Arrow was selected as one of eight recipients of the National Medal of Science for his innovative views.
And now, as a long bull market may be over, and if the current “new-normal” prevails – meaning a 4.5% real annualized rate of return on equities and a 1.5% real rate on bonds – wealth accumulation for all may be reduced.
An Imprecise Science
There is a major variable, dominant in any marketplace that pushes an economy in a forward direction. It is called consumerism. This became apparent while waiting in a doctor’s office one recent afternoon.
Scenario:
The front office receptionist, who appeared to be about 21 years old, was breaking for lunch and her replacement, who appeared not much older, came over to assist. Realizing the propensity for a long wait, one was taken by the size of waiting room and the number of patients coming in and out of the office. [Americans consume healthcare and a lot of it]. There was another notable peculiarity. The sample prescription bags being carried out the door were no match for the bags under everyone’s eyes, including the doctor’s. The office staff was probably working overtime, if not two jobs, and the doctor was working harder and faster in a managed care system.
Assessment
Why? So they all could afford to buy and voraciously consume for their children and themselves. Americans indeed work longer hours than any other industrialized nation.
Conclusion
Finally, as women medical professionals entered the workforce in unprecedented numbers, the stock markets reached an all time high in 2025, even as money was spent at a feverish pace as the Federal Reserve pumped out money in inflammatory fashion.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Investing in Growth Stocks – Catching the Momentum [BIG-MO]
The growth style of investing focuses on companies with strong earnings and accelerating capital growth. A growth investor will make investment decisions based on forecasts of continuing growth in earnings. Growth investing emphasizes qualitative criteria, including value judgments about the company, its markets, its management, and its ability to extract future earnings growth from the particular industry.
Quantitative indicators of interest to the growth investor include high Price/Earnings ratios, Price/Sales ratios, and low dividend yields. A high P/E ratio suggests that the market is prepared to pay more per share in anticipation of future earnings. A low dividend yield suggests that the company is reinvesting rather than distributing profits. These indicators are considered in relation to the company’s immediate competitors. The companies with the highest P/E ratios relative to their industry will often be dominant within their market segment and have strong growth prospects. Growth investors will generally focus on premium and leading-edge companies.
***
***
Some industry sectors by their nature have stronger growth characteristics, particularly more innovative and speculative industries.
For example, during the bull market run on the U.S. stock markets during the late 1990s, the technology sector was a major area of growth investment. On observing strong earnings growth, a growth investor will decide whether to buy shares based on whether the company’s growth is going to continue at its present rate, to increase, or to decrease. If it is expected to increase, the growth investor will consider it a candidate for purchase. The key research question is: at what point will the company’s growth flatten out, or fall? If a company’s growth rate slows or reverses, it is no longer attractive to a growth investor. Growth investors are normally prepared to pay a premium for what they believe to be high quality shares. The potential downside in growth investing is that if a company goes into sudden decline and the share price falls, you can lose capital value rapidly.
Growth stocks, like the current “Magnificent-Seven“, carry high expectations of above-average future growth in earnings and above-average valuations. Investors expect these stocks to perform well in the future and are willing to pay high P/E multiples for this expected growth. The danger is that the price may become too high. Generally, once a company sports a P/E ratio above 50, the risk significantly escalates. Many technology growth stocks traded at a P/E ratio of above 100 during 1999. This is unsustainable. No company in the history of the stock market has been able to maintain such a high P/E level for a sustained period of time.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
While in Omaha for the Berkshire Hathaway annual meeting one year, I participated in an investment panel hosted by a local chapter of the Young Presidents’ Organization. I had the privilege of sharing the stage with such industry giants as Tom Russo, a partner of Gardner Russo & Gardner (famous for knowing more about consumer stocks than the management that runs them), and Tom Gayner, president and CIO of Markel Corp., a specialty insurance company that on many levels resembles the Berkshire of 30 years ago.
We were asked how much time a value investor should spend on macro forecasting. Usually macro forecasting is frowned upon in the value investing community, and Berkshire CEO Warren Buffett has everything to do with that. He is famous for saying (and I am paraphrasing), “My decision making would not change even if I knew what the Federal Reserve will do with interest rates next month.” There is sound logic behind this: Forecasting the economy is incredibly difficult in the short run. The economy is not unlike a black box with hundreds of gauges on it that in the near term give you conflicting readings about what’s inside it.
For this reason macro forecasting was disapproved of by value investors, and for 20 years this attitude paid off. The economic climate was favorable, the stock market was in overdrive, price-earnings ratios were expanding. Macro did not matter — until the housing bubble and financial crisis. Value investors who had had their heads in the sand got annihilated.
Things in life often swing, pendulum-like, from one extreme to another. Right after a crisis every investor is a macro expert. It’s kind of hilarious: Investors who just a few years earlier didn’t even know the names of most economic indicators are now spitting them out in conversations as though they had absorbed them with their mother’s milk. So what should investors do — become macro experts or economic ignoramuses?
Believe it or not, there is a logical and, more important, a practical answer to this question. As an investor you want to spend very little time on forecasting the weather (that is, what the Fed will do with interest rates next month or the rate of growth of the economy). Weather forecasting, first of all, is not always accurate, but it will certainly consume a lot of time and energy, and the forecasts have a very finite shelf life. Yesterday’s weather is irrelevant today. As long as you own companies that can survive rain without catching pneumonia — even a few weeks of rain — weather forecasting is a waste of time. This is what Buffett was implying by saying he didn’t want to be a macro forecaster.
However, instead of being a weatherman (or weatherwoman), as an investor you want to pay serious attention to “climate change” — significant shifts in the global economy that can impact your portfolio. This is exactly what Buffett did over the past few decades — he was warning about the weak dollar because of trade-deficit imbalances (he even put on a trade that bet against the dollar). He also warned about derivatives — “weapons of mass destruction” — and tried to cleanse them from the portfolio of General Re (an insurance company Berkshire acquired) as fast as he could.
It has been said that most ordinary people should have at least three to six months of living expenses (not including taxes) in a cash-equivalent reserve fund that is easily accessible (i.e., liquid). The amount needed for a one-month reserve is equal to the amount of expenses for the month, rather than the amount of monthly income. This is because during no-income months there is no income tax.
However, the situation might not be the same for physicians in today’s harsh economic climate.
The New Realities
Now, some physician-focused financial advisors, financial planners and Certified Medical Planners™ suggest even more reserve fund savings; up to two years. That’s because many factors come into play when determining how much a particular doctor’s family should have.
For example:
Does the family have one income or two? If the doctor is in a dual-income family with stable incomes and they live on a single income, the need for a liquid reserve is less.
How stable is the doctor’s income source? If a sole provider with an unstable income who spends all of the income each month, the need for a liquid cash reserve is high.
Does the doctor own the practice, work in a clinic, medical group, hospital or healthcare system? In other words – employee (less control) or employer (more control).
What is the doctor’s medical specialty and how has managed care penetrated his locale, or affected her focus? What about a DO, DDS/DMD or DPM, etc.
How does the family use its income each month; does it have a saver, spender, or investor mentality?
Does the family anticipate the possibility of large expenses occurring in the future (medical practice start-up costs or practice purchase; children, medical school student debts; auto or home loans; and/or liability suits, etc)?
Pan physician lifestyle?
The Past
In the ancient past, a doctor may have opted for a nine-twelve month reserve if the need for security was high – and a six-to-nine month reserve if the need for security was low. But today, even more may be needed. How about 15-18 months, or more? Perhaps even 24 months!
So, the following questions may be helpful in determining the amount of reserve needed by the physician:
1. How long would it take you to find another job in your medical specialty if you suddenly found yourself unemployed – same for your spouse?
2. Would you have to relocate – same for your spouse?
3. How much do you spend each month on fixed or discretionary expenses and would you be willing to lower your monthly expenses if you were unemployed?
Assessment
Once the amount of reserve is determined, the doctor should use the appropriate investment vehicles for the funds.
At minimum, the reserve should be invested in a money market fund. For larger reserves, an ultra-short-term bond fund might be appropriate for amounts over three-six months. While even larger reserves might be kept in a short term bond fund depending on interest rates and trends.
So, what do the initials M.D. really mean? … More Dough!
How much reserve do you have and where is it stashed?
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
9. We act with honesty, integrity and are always straightforward. 8. We strive to be innovative, creative, iconoclastic, and flexible. 7. We admit and learn from mistakes and don’t repeat them. 6. We work hard always as competitors are trying to catch up. 5. We treat others with dignity and respect. 4. We are the onus of consulting advice for the well being of others. 3. We fight complacency as former success is in the past. 2. The best management styles are timeless, not timely. 1. Our clients are colleagues and always come first.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Posted on February 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dan Ariely PhD
THE IRRATIONAL ECONOMIST
***
***
Of course you don’t need a human financial advisor … until you do. Today, we’ve had unfettered internet access to a wide range of investments, opinions and models for at least two decades. So, why the bravado to go it alone; fifteen positive years for equities, since 2009! Yet, the DJIA, S&P 500 and NASDAQ just plunged and plummeted today!
The financial advisor’s role is to remove the human element and emotion from investing decisions for something as personal as your wealth. Emotion drives the retail investor to sell low (fear) and buy high (greed). This is the reason why the average equity returns for retail investors is less than half of the S&P 500’s returns.
No, of course you don’t need a human financial advisor … until you do.
Understanding how economic behavior factors into health and health care decisions can benefit anyone interested in this field. However, the following groups of individuals may benefit most from the study of health economics:
Medical providers: Doctors, nurses, and assistants can evaluate new treatments, technologies, and services to determine ways to deliver value-based care. Medical providers benefit from understanding the economics behind these developments [MD/DO, DPM, DDS/DMD, RN, PA, etc].
Administrators: Health care administrators process insurance co-payments and manage financial metrics for health care providers. Learning the intricacies of health care economics can provide the necessary context as they liaise with insurance providers and use new technologies to process payments.
Policymakers or public health officials: Those who are in charge of policy decisions at the local, state, federal, or international levels benefit from understanding the economic relationship between stakeholders and the general public.
Business leaders: Because many Americans receive private insurance, health care becomes a major expense for employers. Business leaders must understand the health economics outlook to appease their employees, shareholders, and even their customers.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Posted on February 20, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
FDA recently approved the first new kind of painkiller since 1998. The drug, called Journavx and made by Vertex Pharmaceuticals, is a non-opioid medication, and the company says it comes with “no evidence of addictive potential.” One downside? At $15.50 per pill, it’s not cheap, and it’s not clear yet how much insurers will cover.
US stocks closed higher on Wednesday as investors weighed President Trump’s latest 25% tariff salvo and digested the Federal Reserve minutes for insight into future policy.
Wednesday’s minutes from the Fed’s January meeting revealed most central bank officials supported holding policy at restrictive levels amid concerns about persistent inflation.
Posted on February 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
SPONSOR: MarcinkoAssociates.com
***
***
Capital Market: This is a market where buyers and sellers engage in the trade of financial assets, including stocks and bonds. Capital markets feature several participants, including:
Companies: Firms that sell stocks and bonds to investors
Institutional investors: Investors who purchase stocks and bonds on behalf of a large capital base
Mutual funds: A mutual fund is an institutional investor that manages the investments of thousands of individuals
Hedge funds: A hedge fund is another type of institutional investor, which controls risk through hedging—a process of buying one stock and then shorting a similar stock to make money from the difference in their relative performance
Whether you know it, or not, inflation is your biggest financial and investing enemy. Fortunately, the rule of 70 will tell you in how many years the value of money will be halved.
For example, you just need to divide 70 with the rate of inflation. So if the rate of inflation is 7%, then 70/7 = 10 years. Therefore, in 10 years, your 100 note will be worth 50.
Note: The phrase rule of thumb refers to an approximate method for doing something, based on practical experience rather than theory. This usage of the phrase can be traced back to the 17th century and has been associated with various trades where quantities were measured by comparison to the width or length of a human adult thumb.
Posted on February 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
DEFINITIONS
By SBA and Staff Reporters
***
***
Acquisition
The acquiring of supplies or services by the federal government with appropriated funds through purchase or lease.
Affiliates
Business concerns, organizations, or individuals that control each other or that are controlled by a third party. Control may include shared management or ownership; common use of facilities, equipment, and employees; or family interest.
Best and Final Offer
For negotiated procurements, a contractor’s final offer following the conclusion of discussions.
Certificate of Competency
A certificate issued by the Small Business Administration (SBA) stating that the holder is “responsible” (in terms of capability, competency, capacity, credit, integrity, perseverance, and tenacity) for the purpose of receiving and performing a specific government contract.
Certified 8(a) Firm
A firm owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts under the Small Business Administration’s 8(a) Business Development Program.
Contract
A mutually binding legal relationship obligating the seller to furnish supplies or services (including construction) and the buyer to pay for them.
Contracting
Purchasing, renting, leasing, or otherwise obtaining supplies or services from nonfederal sources. Contracting includes the description of supplies and services required, the selection and solicitation of sources, the preparation and award of contracts, and all phases of contract administration. It does not include grants or cooperative agreements.
Contracting Officer
A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings.
Contractor Team Arrangement
An arrangement in which (a) two or more companies form a partnership or joint venture to act as potential prime contractor; or (b) an agreement by a potential prime contractor with one or more other companies to have them act as its subcontractors under a specified government contract or acquisition program.
Defense Acquisition Regulatory Council (DARC)
A group composed of representatives from each Military department, the Defense Logistics Agency, and the National Aeronautics and Space Administration and that is in charge of the Federal Acquisition Regulation (FAR) on a joint basis with the Civilian Agency Acquisition Council (CAAC).
Defense Contractor
Any person who enters into a contract with the United States for the production of material or for the performance of services for the national defense.
Electronic Data Interchange
Transmission of information between computers using highly standardized electronic versions of common business documents.
Emerging Small Business
A small business concern whose size is no greater than 50 percent of the numerical size standard applicable to the Standard Industrial Classification code assigned to a contracting opportunity.
Equity
An accounting term used to describe the net investment of owners or stockholders in a business. Under the accounting equation, equity also represents the result of assets less liabilities.
Fair and Reasonable Price
A price that is fair to both parties, considering the agreed-upon conditions, promised quality, and timeliness of contract performance. “Fair and reasonable” price is subject to statutory and regulatory limitations.
Federal Acquisition Regulation (FAR)
The body of regulations which is the primary source of authority governing the government procurement process. The FAR, which is published as Chapter 1 of Title 48 of the Code of Federal Regulations, is prepared, issued, and maintained under the joint auspices of the Secretary of Defense, the Administrator of General Services Administration, and the Administrator of the National Aeronautics and Space Administration. Actual responsibility for maintenance and revision of the FAR is vested jointly in the Defense Acquisition Regulatory Council (DARC) and the Civilian Agency Acquisition Council (CAAC).
Full and Open Competition
With respect to a contract action, “full and open” competition means that all responsible sources are permitted to compete.
Intermediary Organization
Organizations that play a fundamental role in encouraging, promoting, and facilitating business-to-business linkages and mentor-protégé partnerships. These can include both nonprofit and for-profit organizations: chambers of commerce; trade associations; local, civic, and community groups; state and local governments; academic institutions; and private corporations.
Joint Venture
In the SBA Mentor-Protégé Program, an agreement between a certified 8(a) firm and a mentor firm to perform a specific federal contract.
Mentor
A business, usually large, or other organization that has created a specialized program to advance strategic relationships with small businesses.
Negotiation
Contracting through the use of either competitive or other-than-competitive proposals and discussions. Any contract awarded without using sealed bidding procedures is a negotiated contract.
Partnering
A mutually beneficial business-to-business relationship based on trust and commitment and that enhances the capabilities of both parties.
Prime Contract
A contract awarded directly by the Federal government.
Protégé
A firm in a developmental stage that aspires to increasing its capabilities through a mutually beneficial business-to-business relationship.
Request for Proposal (RFP)
A document outlining a government agency’s requirements and the criteria for the evaluation of offers.
SCORE
Counselors to America’s Small Business is a 12,400-member volunteer association sponsored by the SBA. SCORE matches volunteer business-management counselors with present prospective small business owners in need of expert advice.
Small Business
A business smaller than a given size as measured by its employment, business receipts, or business assets.
Small Business Development Centers (SBDC)
SBDCs offer a broad spectrum of business information and guidance as well as assistance in preparing loan applications.
Small Business Innovative Research (SBIR) Contract
A type of contract designed to foster technological innovation by small businesses with 500 or fewer employees. The SBIR contract program provides for a three-phased approach to research and development projects: technological feasibility and concept development; the primary research effort; and the conversion of the technology to a commercial application.
Small Disadvantaged Business Concern
A small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.
Standard Industrial Classification (SIC) Code
A code representing a category within the Standard Industrial Classification System administered by the Statistical Policy Division of the U.S. Office of Management and Budget. The system was established to classify all industries in the US economy. A two-digit code designates each major industry group, which is coupled with a second two-digit code representing subcategories.
Subcontract
A contract between a prime contractor and a subcontractor to furnish supplies or services for the performance of a prime contract or subcontract.
Posted on February 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
***
***
U.S. Stock Markets will be closed for Presidents Day. But crypto trading takes no days off.
The Presidents Day holiday was originally intended to celebrate the birthday of the first President George Washington on February 22nd, according to the Library of Congress. The holiday is still formally designated as Washington’s Birthday by the Office of Personnel Management. Washington’s birthday was an informal holiday during the country’s early existence and President Rutherford B. Hayes formalized the holiday in 1879, according to History.com. The holiday’s proximity to the birthday of President Abraham Lincoln on February 12th caused the general public to link the two and later expand the celebration to all presidents.
***
Berkshire Hathaway, the investment conglomerate led by Warren Buffett, reduced its holdings in two US banks. Bank of America (BoA) and Citigroup shares were sold in the final quarter of 2024. The move, disclosed in a regulatory filing last Friday, comes as Buffett continues to trim Berkshire’s stock portfolio, favoring safer investments such as US Treasury bills.
***
Wall Street just dumped nearly every dollar of the $12.5 billion in loans that helped Elon Musk buy Twitter—now called X—in 2022. A group of seven major banks, led by Morgan Stanley, offloaded $4.74 billion of the debt last Friday, selling more than their planned $3 billion as investors flooded in with $12 billion in orders, according to a report from the Financial Times.
In retirement, according to Josephine Nesbit, your economic class can be broadly categorized into four distinct groups, each defined by their net worth and financial capabilities, ranging from retirees with limited resources to the wealthy. And, according to Moneywise, here are the net worth categories of the poor, middle class (and upper-middle class) and rich:
Poor retirees: Poor retirees are in the lower 20th percentile, and may have a net worth of around $10,000. This is often without property ownership, forcing many to rely mainly on Social Security or minimal pensions.
Middle-class retirees: Making up the 50th percentile, with a median net worth of approximately $281,000, this group usually includes home equity, retirement savings and a 401(k) plan.
Upper-middle-class retirees: These retirees possess a net worth between $201,800 and $608,900. They have diversified assets and enjoy a comfortable retirement cushion.
Rich retirees: In the 90th percentile, with net worth starting at $1.9 million, this group has much more financial freedom and is able to afford luxuries and legacy planning.
Posted on February 15, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Although Berkshire-Hathaway sold 203,091 shares on Friday, it still owns 45 percent of DaVita, Inc. The stake, valued at $6.4 billion, has been part of Berkshire’s portfolio since 2011. The sell-off Friday was after the sale was disclosed to Wall Street after markers closed on Thursday. When Wall Street shut at 4pm in New York, DaVita was down 11.1 percent – the stock’s biggest one-day selloff in almost two years for the kidney dialysis provider company.
The S&P 500 barely budged and slipped by less than 0.1%, a day after rallying within 0.1% of its record set last month. The Dow Jones Industrial Average dipped 165 points, or 0.4%, while the NASDAQ composite rose 0.4%.
With international stock markets comprising about 40 percent of the world’s capitalization as of 2023, a broad range of investment opportunities exist outside the borders of the U.S.
For investors who are looking to diversify their mutual fund portfolio with exposure to companies located outside the U.S., there exist two basic choices: A global mutual fund or an international mutual fund.
By definition, international funds invest in non-U.S. markets, while global funds may invest in U.S. stocks alongside non-U.S. stocks.
Make a Choice: The definition may seem clear, but what may seem less clear is why an investor might select one over the other. The reason that an investor may select a global fund is to provide the portfolio manager with the latitude to move the fund’s investments among non-U.S. markets and the U.S. market in order to take advantage of the shifts in relative opportunities these markets may present at any given moment.
By investing in a global fund, the challenge for the investor is that he or she may not know at any point in time their total exposure to the U.S. market within the context of their overall portfolio.
An Inside Look: As a consequence, some investors want to manage their allocation risk by setting the broad asset allocation for their portfolio and then identifying funds that are within those asset classes. For these investors, an international fund may make more sense since it allows them to maintain a greater adherence to their desired domestic/international stock allocation.
Keep in mind that asset allocation is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss. As you consider a global or an international fund, you should also be aware of the fund’s approach to the inherent currency risks. Some funds choose to engage in strategies that may mitigate the effects of currency fluctuations, while others consider currency movements – up and down – to be an element of portfolio performance.
Financial accounting and managerial accounting are two distinct branches of the accounting field, each serving different purposes and stakeholders. Financial accounting focuses on creating external reports that provide a snapshot of a company’s financial health for investors, regulators, and other outside parties. Managerial accounting, meanwhile, is an internal process aimed at aiding managers in making informed business decisions.
Objectives of Financial Accounting
Financial accounting is primarily concerned with the preparation and presentation of financial statements, which include the balance sheet, income statement, and cash flow statement. These documents are meticulously crafted to reflect the company’s financial performance over a specific period, providing insights into its profitability, liquidity, and solvency. The objective is to offer a clear, standardized view of the financial state of the company, ensuring that external entities have a reliable basis for evaluating the company’s economic activities.
The process of financial accounting also involves the meticulous recording of all financial transactions. This is achieved through the double-entry bookkeeping system, where each transaction is recorded in at least two accounts, ensuring that the accounting equation remains balanced. This systematic approach provides accuracy and accountability, which are paramount in financial reporting. CPA = Certified Public Accountant.
Objectives of Managerial Accounting
Managerial accounting is designed to meet the information needs of the individuals who manage organizations. Unlike financial accounting, which provides a historical record of an organization’s financial performance, managerial accounting focuses on future-oriented reports. These reports assist in planning, controlling, and decision-making processes that guide the day-to-day, short-term, and long-term operations.
At the heart of managerial accounting is budgeting. Budgets are detailed plans that quantify the economic resources required for various functions, such as production, sales, and financing. They serve as benchmarks against which actual performance can be measured and evaluated. This enables managers to identify variances, investigate their causes, and implement corrective actions. Another objective of managerial accounting is cost analysis. Managers use cost accounting methods to understand the expenses associated with each aspect of production and operation. By analyzing costs, they can determine the profitability of individual products or services, control expenditures, and optimize resource allocation.
Performance measurement is another key objective. Managerial accountants develop metrics and key performance indicators (KPIs) to assess the efficiency and effectiveness of various business processes. These performance metrics are crucial for setting goals, evaluating outcomes, and aligning individual and departmental objectives with the overall strategy of the organization. CMA = Certified Managerial Accountant
Reporting Standards in Financial Accounting
The bedrock of financial accounting is the adherence to established reporting standards, which ensure consistency, comparability, and transparency in financial statements. Globally, the International Financial Reporting Standards (IFRS) are widely adopted, setting the guidelines for how particular types of transactions and other events should be reported in financial statements. In the United States, the Financial Accounting Standards Board (FASB) issues the Generally Accepted Accounting Principles (GAAP), which serve a similar purpose. These standards are not static; they evolve in response to changing economic realities, stakeholder needs, and advances in business practices.
For instance, the shift towards more service-oriented economies and the rise of intangible assets have led to updates in revenue recognition and asset valuation guidelines. The convergence of IFRS and GAAP is an ongoing process aimed at creating a unified set of global standards that would benefit multinational corporations and investors by reducing the complexity and cost of complying with multiple accounting frameworks.
Posted on February 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Consumer prices overall increased 3% from a year earlier, up from 2.9% the previous month, according to the Labor Department’s consumer price index, a measure of goods and service costs across the U.S. That’s the most since June and above the 2.9% expected by economists surveyed by Bloomberg.
Most U.S. stocks fell Wednesday after a report showed inflation is unexpectedly worsening for Americans.
The S&P 500 dropped 0.3%, though it had been on track for a much worse loss of 1.1% at the start of trading. The Dow Jones Industrial Average sank 225 points, or 0.5%, while the NASDAQ composite edged higher by less than 0.1%
Posted on February 12, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
***
***
DEFINITION BAR SLIDES LEFT TO RIGHT
Understanding Insurance Jargon
1. Premiums
When you purchase an insurance policy, you'll be required to make regular payments, known as premiums. These payments are typically made monthly or annually and are the cost of maintaining your insurance coverage.
2. Deductible
Think of a deductible as the money you have to shell out from your own pocket before your insurance kicks in to help cover your expenses. It's like the upfront cost you need to cover before your insurance really starts working for you.For example, if you have a $500 deductible and make a claim for $1,000, you'll need to pay $500, and your insurer will cover the remaining $500.
3. Policyholder
The policyholder is the person who owns an insurance policy. This individual is responsible for paying premiums and making claims under the policy.
4. Coverage Limit
Every insurance policy has a coverage limit, which is the maximum amount your insurer will pay out for a covered claim. It's crucial to understand your policy's limits to ensure you have adequate coverage.
5. Underwriting
Underwriting is the process insurers use to assess the risk of providing coverage to an individual or entity. It involves evaluating factors such as age, health, and driving record to determine premium rates and eligibility.
Types of Insurance
6. Auto Insurance
Auto insurance provides financial protection in case of accidents, theft, or damage to your vehicle. It's a legal requirement in many places and typically includes liability, collision, and comprehensive coverage.
7. Health Insurance
Health insurance covers medical expenses, including doctor visits, hospital stays, and prescription medications. It can be provided by employers or purchased individually.
8. Homeowners Insurance
Homeowners insurance is like a safety net for your home and stuff. It steps in to help if your place or belongings get damaged or stolen. Plus, it's got your back with liability coverage in case someone gets hurt while on your property.
9. Life Insurance
Life insurance pays out a death benefit to beneficiaries when the policyholder passes away. It can provide financial security to loved ones and cover funeral expenses.
10. Liability Insurance
Liability insurance covers you in case you're responsible for injuring someone or damaging their property. It's often included in auto and homeowners insurance policies.
Navigating Insurance Policies
11. Exclusions
Exclusions are specific events or circumstances that your insurance policy doesn't cover. It's essential to review these carefully to understand what situations won't be reimbursed.
12. Riders
Riders are add-ons to insurance policies that provide additional coverage for specific situations. For example, you can add a rider to your homeowners policy to cover expensive jewelry.
13. Claim
A claim is a formal request to your insurance company for coverage or reimbursement for a loss or damage. It's essential to follow the claims process outlined in your policy.
14. Grace Period
The grace period is the amount of time you have to pay your premium after the due date without your coverage lapsing. Be aware of your policy's grace period to avoid a lapse in coverage.
15. No-Claims Discount
Many insurance companies offer a no-claims discount to policyholders who haven't filed any claims within a specified period. This can lead to lower premiums over time.
Specialized Insurance Terms
16. Subrogation
Subrogation is the process by which an insurance company seeks reimbursement from a third party for a claim it has already paid out. This often occurs in auto accidents when your insurer goes after the at-fault driver's insurance company.
17. Actuary
An actuary is a professional who uses mathematics and statistics to assess risk and set premium rates for insurance policies. They play a crucial role in the insurance industry's financial stability.
18. Adjuster
An insurance adjuster is responsible for investigating claims, evaluating damage, and determining how much the insurance company should pay. They work to ensure fair settlements for policyholders.
19. Premium Credit
Premium credit is a discount offered by insurers to policyholders who meet specific criteria, such as having a good driving record or installing safety features in their home.
20. Salvage Value
When an insured item is damaged or totaled, it may still have some value. Salvage value refers to the amount the insurer can recover by selling the damaged item.
Protecting Your Financial Future
21. Risk Management
Effective risk management involves identifying potential risks and taking steps to minimize or mitigate them. Insurance is one tool in your risk management toolkit.
22. Beneficiary
A beneficiary is the person or entity designated to receive the proceeds of a life insurance policy when the policyholder passes away. It's essential to keep this information up to date.
23. Policy Term
The policy term is the duration for which your insurance policy is valid. It's crucial to renew your policy before it expires to maintain coverage.
24. Umbrella Policy
An umbrella policy provides additional liability coverage beyond the limits of your primary insurance policies. It can protect your assets in the event of a costly lawsuit.
25. Coinsurance
Coinsurance is the percentage of costs that you and your insurance company share after you've met your deductible. It's often seen in health insurance policies.
Insurance in Practice
26. Premium Increase
Your insurance premium may increase due to factors such as claims history, changes in coverage, or external economic conditions. It's essential to shop around for the best rates.
27. Depreciation
Depreciation is the decrease in the value of an asset over time. Insurance policies may account for depreciation when settling claims for damaged property.
28. Reinstatement
If your insurance policy lapses due to non-payment, you may have the option to reinstate it by paying any outstanding premiums and fees.
29. Excess
Excess, also known as a deductible, is the portion of a claim that you're responsible for paying. It's designed to prevent small, frequent claims.
30. Pre-Existing Condition
In health insurance, a pre-existing condition is a medical condition you had before obtaining coverage. Within the framework of the Affordable Care Act, insurance providers are prohibited from refusing coverage or imposing elevated premiums due to pre-existing medical conditions.
Insurance Regulations
31. State Insurance Department
Each state in the United States has a department or commission responsible for regulating insurance within its borders. They oversee insurers' operations and protect consumers.
32. Consumer Reports
Consumer reports provide information on insurance companies' financial strength, customer satisfaction, and claims-handling. They can help you choose a reputable insurer.
33. Guaranteed Renewal
Guaranteed renewal is a provision in some insurance policies that ensures the insurer cannot refuse to renew your policy as long as you pay your premiums.
34. Non-Cancelable Policy
A non-cancelable policy is one that the insurer cannot cancel or change the terms of as long as you pay your premiums. This provides certainty in coverage.
35. Market Conduct Examination
Insurance regulators conduct market conduct examinations to assess insurers' business practices and ensure they comply with laws and regulations.
Insurance for Businesses
36. Business Interruption Insurance
Business interruption insurance provides coverage for lost income and expenses when a covered event, such as a fire or natural disaster, forces your business to close temporarily.
37. Workers’ Compensation
Workers' compensation insurance covers medical expenses and lost wages for employees who are injured on the job. It's typically required by law for businesses with employees.
38. Professional Liability Insurance
Professional liability insurance, often called errors and omissions insurance, protects professionals from liability claims resulting from errors or negligence in their work.
39. Business Owner’s Policy (BOP)
A business owner's policy bundles essential coverages, such as property and liability insurance, into a single policy designed for small businesses. It's a cost-effective option.
40. D&O Insurance
Directors and officers (D&O) insurance protects the personal assets of company leaders in case they are sued for alleged wrongful acts while managing the business.
Advanced Insurance Concepts
41. Aggregate Limit
The aggregate limit is the maximum amount an insurance policy will pay out during a policy term, regardless of the number of claims made.
42. Risk Pooling
Insurance works on the principle of risk pooling, where policyholders collectively share the financial burden of covered losses.
43. Loss Ratio
The loss ratio is a measure of an insurance company's claims payouts compared to its earned premiums. A high loss ratio may indicate financial instability.
44. Surplus Lines Insurance
Surplus lines insurance covers risks that standard insurers won't or can't cover. It's often used for unique or high-risk situations.
45. Rescission
Rescission is the cancellation of an insurance policy retroactively, often due to misrepresentation or fraud on the policyholder's part.
Future of Insurance
46. Insurtech
Insurtech refers to the use of technology, such as artificial intelligence and data analytics, to streamline and improve the insurance industry's processes.
47. Telematics
Telematics devices track driving behavior and can lead to personalized auto insurance rates based on individual habits.
48. Microinsurance
Microinsurance provides affordable coverage to low-income individuals and communities, helping them mitigate risks and protect their assets.
49. Blockchain in Insurance
Blockchain technology can enhance transparency and security in insurance by creating immutable records of policies and claims.
50. Climate Change and Insurance
Climate change poses significant challenges to the insurance industry as it leads to more frequent and severe weather events. Insurers must adapt to these changing risk landscapes.
Insurance is a complex field with a language of its own, but understanding these 50 common insurance terms can help you navigate the world of insurance with confidence. Whether you're looking for auto, health, home, or any other type of insurance, being informed about these terms and concepts is essential to making informed decisions about your coverage.
A new report from the Global Financial Literacy Excellence Center shows that the average American scored just 48% on a financial literacy test, with groups scoring as low as 37% in certain areas. Since the report’s inception in 2017, the results have been relatively stable: Americans have scored 48% to 52% correctly on the annual study.
But only 16% of Americans scored between 75% and 100% on the test in 2024. This alarming statistic has far-reaching consequences for companies, the wider economy, and more than half all Americans.
Accounts payable are short-term obligations to be paid by an organization. It arises from trading activities and other business-related expenses during the business, including parties from whom we have purchased goods or services and costs incurred for which money is yet to be paid, generally in the same financial year.
#2 – Accounts Receivable
Accounts Receivable form part of current assets and refer to amounts due from parties to whom we have sold goods or services or incurred expenses on their behalf for which money is yet to be realized. It may include debtors, bills receivable, etc., which can be converted into cash in the short term to ensure the organization’s liquidity.
#3 – Balance Sheet
A Balance Sheet is a reconciliation of assets (current and fixed) and liabilities (current and noncurrent), and capital invested in an organization. Stakeholders such as creditors, shareholders, and banks, which have granted loans to the organization and government, use the Balance Sheet to analyze the financial position, growth, and stability.
#4 – Current Assets
Current assets refer to an organization’s realizable resources in the short term, generally during the same financial year. They include cash/bank balance and assets that can convert into cash, ranging from short-term loans and advances, sundry debtors, short-term investments, etc.
#5 – Equity
Equity is the amount invested in the business by its owners, in the form of capital in the case of sole proprietorship and partnerships, or shares (equity and preference) of varying denominations in companies (public or private).
#6 – Expenses
All the money outflow (present or future) incurred for procuring goods and services to affect sales in a business (direct expenses) and incidental to the business (indirect expenses) as well as ancillary to the running of an organization are referred to as expenses
#7 – Fixed Assets
Fixed assets are tangible resources that an organization uses for carrying out daily operations of a business, such as land, plant and equipment, furniture and fixtures, buildings, machinery, etc., which are not purchased to be sold in the short term.
#8 – Ledger
Ledger is the book of entry for recording transactions in such a way that we come to know the outstanding debit or credit balance of an account in our business for which we record the opening balance, transactions made in that account, and the closing balance to find out the exact position of that particular account.
#9 – Income Statement
The Income statement forms part of the financial statements and tells us the exact position of our gross and net profit at a particular cut-off date. It is done by recording all the direct incomes and closing stock on the credit side and all direct expenses and opening stock on the debit side to find the gross profit and all the indirect incomes and indirect expenses similarly to find out the net profit.
#10 – Liabilities
Liabilities are the present (short term) and future(long term) obligations of an organization which represents the debts due to be paid for goods and services procured for the business in the past and include sundry creditors, short term loans and advances, bills payable, etc. which come under short term liabilities and debentures, term loans from a bank, long term loans and advances, etc. which come under long term liabilities.
#11 – Net Income
The profit or loss arrived at after deducting all direct and indirect expenses from all the direct and indirect incomes equals to net income made by a business which is the earning done by the business at a cut-off date and is very useful in comparing the growth and financial position of an organization from previous years as well as for adopting measures for the betterment of the profitability levels of the business.
#12 – Revenue
The gross income earned by the organization from carrying out core business activities without deduction of any expenses is termed as revenue earned by the organization, which also indicates the sale and other incomes in total.
#13 – Credit
Wherever an account is credited, it reduces the balance of an account in the case of real accounts, creates an obligation to pay an individual in the case of personal accounts, and increases the income side if a nominal account is credited.
#14 – Debit
Wherever an account is debited, it increases the balance of an account in the case of real accounts, creating an obligation to receive money from an individual in the case of personal accounts and increasing the expenses side if a nominal account is debited.
#15 – Audit
An audit is an examination of books of accounts prepared by an organization to validate the entries recorded and ensure the accuracy and correctness of the financial statements along with finding out any discrepancies in the books, including frauds, if any, hidden by the employees of the organization.
The desire for security and feelings of insecurity are the same thing.
The idea of security, financial or otherwise, is an illusion; human life is inherently insecure. But, this doesn’t mean we shouldn’t be prudent with risk and diligent financial planning with strategies like saving and investing.
However, according to colleague Eugene Schmuckler PhD, MBA,MEd seeking security is like many things; the more you try to grasp and obsess about financial security, the more quickly you will reach a point of diminishing returns. You will feel increasingly less secure at a certain point.
Fund managers Tom Bailard, Larry Biehl and Ron Kaiser identified five types of investors, each type characterized by their investment preferences and actions. These 5 types are: Individualists, Adventurers, Celebrities, Guardians and Straight Arrows. Key to the different categories is their different attitude to seeking professional financial advice. Defined below:
Individualists have faith in their own investment abilities so do not approach a financial adviser. But they are also cautious.
Adventurers are what may be called high rollers, in that they like big bets, tend not to diversify and are happy to put all their eggs in one basket. They, too, are unlikely to seek financial advice.
Celebrities tend to follow the crowd in investment terms but are aware of their lack of expertise so frequently consult advisers.
Guardians are fearful of losing money, thus prefer rock-solid investments such as government bonds. They, too, are likely to seek professional investment advice.
Straight Arrows exhibit some of the characteristics of individualists and some of adventurers.
According to Rob Lenihan, of TheStreet, the January Barometer is a theory that says the investment performance of the S&P 500 in January is representative of the predicted performance of the entire year. The theory says that if stocks are higher in January, they should be higher for the year, and if they are lower in the first month, they’ll be lower for the year.
The S&P 500 finished down on January 31st, but the broad market ended up 2.6% for the month, so maybe we should heed the words of Wall Street legend Yale Hirsch, who first came up with the concept in 1972 in his Stock Trader’s Almanac, a widely read investment guide. Hirsch, by the way, also gave the world the Santa Claus Rally, which describes a rise in stock prices during the last five trading days in December and the first two trading days in the following January.
Analyst Stephen Guilfoyle said early this month in a post for TheStreet Pro that Santa Claus posted a loss this year, which was Santa’s second consecutive year in the red.
“No sweat,” the veteran trader said in his January 9th TheStreet Pro column. “That’s just a seasonal trade, and 2024 was a very nice year for U.S. equities in a broad sense.”
Book Dr. David E. MarcinkoMBA MEd CMPfor your Next Medical, Pharma or Financial Services Seminar orPersonal and Corporate Coaching Sessions
Dr. Marcinko enjoys personal coaching and public speaking and gives as many talks each year as possible, at a variety of medical society and financial services conferences around the country and world. These have included lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, keynote lectures at city and statewide financial coalitions, and annual keynote lectures for a variety of internal yearly meetings.
His talks tend to be engaging, iconoclastic, and humorous. His most popular presentations include a diverse variety of topics and typically include those in all iMBA, Inc’s textbooks, handbooks, white-papers and most topics covered on this blog.
Posted on February 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
UnitedHealthcare has agreed to a $2.5 million settlement in response to a class action lawsuit accusing the company of making unauthorized telemarketing calls. More than 12,000 individuals may be entitled to compensation, with payouts ranging from $350 to $1,000 per person, depending on how many claims are filed.
The lawsuit, filed under the Telephone Consumer Protection Act (TCPA), alleges that UnitedHealthcare placed calls to individuals without their consent between January 9, 2015, and January 9th, 2019. If you received these calls, you could be eligible for a cash settlement—but you must act before April 15th, 2025.
PALM BEACH, Fla. (AP) — President Donald Trump has fired the director of the Consumer Financial Protection Bureau, Rohit Chopra, in the latest purge of a Biden administration holdover. Chopra was one of the more important regulators from the previous Democratic administration who was still on the job since Trump took office on Jan. 20th.
A 2020 STAT analysis found more than two-thirds of Congress receiving a check from pharmaceutical companies that year. More recent data from Open Secrets likewise confirms that a large majority of leaders serving in the U.S. Congress and Senate receive significant contributions from pharmaceutical or health products companies, averaging $45,000 and $47,000 for Republicans and Democrats in the House of Representatives, respectively — and $50,000 and $69,000 for Republicans and Democrats in the Senate.
A certified financial planner (CFP®) helps individuals plan their financial futures. CFPs are not focused only on investments; they help their clients achieve specific long-term financial goals, such as saving for retirement, buying a house, or starting a college fund for their children.
To become a CFP®, a person must complete a course of study and then pass a two-part examination. The exam covers wealth management, tax palnning, insurance, retirement planning, estate planning, and other basic personal finance topics. These topics are all important for someone seeking to help clients achieve financial goals.
Chartered Financial Analyst (CFA)
A CFA, on the other hand, conducts investing in larger settings, normally for large investment firms on both the buy side and the sell side, mutual funds or hedge funds. CFAs can also provide internal financial analysis for corporations that are not in the investment industry. While a CFP® focuses on wealth management and planning for individual clients, a CFA focuses on wealth management for a corporation.
To become a CFA, a person must complete a rigorous course of study and pass three examinations over the course of two or more years. In addition, the candidate must adhere to a strict code of ethics and have four years of work experience in an investment decision-making setting.
(“Informed Voice of a New Generation of Fiduciary Advisors for Healthcare”)
For most lay folks, personal financial planning typically involves creating a personal budget, planning for taxes, setting up a savings account and developing a debt management, retirement and insurance recovery plan. Medicare, Social Security and Required Minimal Distribution [RMD] analysis is typical for lay retirement. Of course, we can assist in all of these activities, but lay individuals can also create and establish their own financial plan to reach short and long-term savings and investment goals.
But, as fellow doctors, we understand better than most the more complex financial challenges doctors can face when it comes to their financial planning. Of course, most physicians ultimately make a good income, but it is the saving, asset and risk management tolerance and investing part that many of our colleagues’ struggle with. Far too often physicians receive terrible guidance, have no time to properly manage their own investments and set goals for that day when they no longer wish to practice medicine.
For the average doctor or healthcare professional, the feelings of pride and achievement at finally graduating are typically paired with the heavy burden of hundreds of thousands of dollars in student loan debt.
You dedicated countless hours to learning, studying, and training in your field. You missed birthdays and holidays, time with your families, and sacrificed vacations to provide compassionate and excellent care for your patients. Amidst all of that, there was no time to give your finances even a second thought.
Between undergraduate, medical school, and then internship and residency, most young physicians do not begin saving for retirement until late into their 20s, if not their 30s. You’ve missed an entire decade or more of allowing your money and investments to compound and work for you. When it comes to addressing your financial health and security, there’s no time to waste.
Posted on January 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
US stocks gained steam on Thursday afternoon as investors digested megacap tech earnings and waited for Apple (AAPL) results for more clues on prospects for Big Tech. The S&P 500 (^GSPC) gained 0.5%, while the Dow Jones Industrial Average (^DJI) rose nearly 0.4%. The tech-heavy NASDAQ Composite (^IXIC) was up nearly 0.3%.
And, after the Federal Reserve stood pat on interest rates as expected, investors have turned to parsing earnings reports — and in particular, the first wave of results from the “Magnificent Seven” companies that have driven broader stock market gains.
Posted on January 30, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Over half the US population was affected by the Change Healthcare cyberattack last February, according to a statement from its parent company UnitedHealth Group. While United had told the federal government in October that 100 million people were hit by the attacks, an updated estimate on Monday put that number at 190 million.
The tech-heavy NASDAQ Composite (^IXIC) was down about 0.5%, retracing some of a bounce-back rally on Tuesday. The S&P 500 (^GSPC) was also down nearly 0.5%, while the Dow Jones Industrial Average (^DJI) lost 0.3%. In its statement on Wednesday, the Federal Reserve notably removed language from its December statement indicating that it was making progress towards its goal of 2% inflation, stating simply: “Inflation remains somewhat elevated.” Fed Chair Jerome Powell pushed back on that notion, referring to the change as “language cleanup” rather than intending to send a signal. Markets bounced off their lows of the day on Powell’s comments.
Posted on January 24, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.9% to 44,565.
And a late-day surge carried the NASDAQ Composite into positive territory in the aftermath of Wednesday’s prodigious AI-driven rally, the tech-heavy index rising 0.2% to 20,053.
Posted on January 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Tech stocks led the market on Wednesday as Netflix (NFLX) stock surged to a record, while President Donald Trump’s boost to AI demand hopes outweighed fresh tariff worries.
The NASDAQ Composite (^IXIC) rose nearly 1.3%, bolstered by a jump in Netflix shares on the heels of surprisingly strong earnings. The S&P 500 (^GSPC) climbed more than 0.6% to close just shy of its record high of 6,090.
While IAs and FAs may seem the same, they are not the same. The Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC) have clearly defined investment advisors as distinct from financial advisors.
The term financial advisor is a generic one that can encompass many different financial professionals, although it most commonly refers to stock brokers (individuals or companies that buy and sell securities).
Investment advisor, on the other hand, is a legal term and thus has a more clear-cut definition – or at least as clear as legalese is apt to be.
KEY DIFFERENCES:
Financial advisors help with all aspects of your finances, including saving, budgeting, insurance, retirement planning, and taxes.
Investment advisors focus specifically on choosing and managing investment portfolios.
Financial advisors offer broader financial guidance, while investment advisors concentrate solely on investments.
Investment advisors are held to the fiduciary standard, while financial advisors who work as brokers may operate under different rules.
Posted on January 19, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Vitaliy Katsenelson CFA
***
***
Embracing Stock Market Stoicism
2024 brought me back to a core Stoic principle that I hold close to my heart: the dichotomy of control. Here’s the gist: Some things are within our power—our values, our character, our decisions—and some aren’t—like your brother-in-law’s random (and possibly dumb) comment, your spouse’s mood, or the fact that every traffic light turns red right as you pull up.
In investing, it’s the same. We can control:
The quality of our research—being logical and thorough in our research
Our decisions and discipline—systematically following our research
Our reactions—how we react to the news and external environmental pressure (I will discuss this at the end of the letter)
The market can price our stocks however it pleases on a month-to-month—or even year-to-year—basis. That’s the part we can’t control. We have to remember that these market prices are merely opinions, not final verdicts. The Stoics teach us to focus our energy on what we can influence (our process) and accept what we can’t (the market’s whims).
This probably sounds straightforward, but there’s a twist that makes it harder for you, the client, to see how this all plays out in real time. You can easily check the portfolio’s value—my decisions, not so much. In theory, I could make subpar investments and hide behind fancy Stoic talk.
That’s exactly the why of these very detailed letters: to show you our thinking, walk you through our individual decisions. I write, you read—that’s our agreement. You’re the judge of whether my process makes sense. But I can’t do that part for you.
The ICE 3-Month USD LIBOR interest rate is the average interest rate at which a selection of banks in London are prepared to lend to one another in American dollars with a maturity of 3 months.
The Bank of America US High Yield Constrained Index is a market value-weighted index of all domestic high-yield bonds and Yankee high-yield bonds (issued by a foreign entity and denominated in U.S. dollars), including deferred interest bonds and payment-in-kind securities.
The ICE BofA BB-B US High Yield Constrained Index is composed of U.S. dollar-denominated corporate debt publicly issued in the U.S. market rated BB through B, based on an average of Moody’s, S&P and Fitch ratings, with issuer exposure capped at 2%.
ICE BofA U.S. Convertible Index tracks the performance of publicly issued, exchange-listed US dollar denominated convertible securities of US companies with at least $50 million face amount outstanding and at least one month remaining to the final conversion date. Index constituents are market capitalization-weighted and rebalanced monthly.
ICE BofA ML MOVE Index is a widely used measure of bond market volatility, similar to the VIX Index for stocks. The MOVE Index (also known as the Merrill Lynch Option Volatility Estimate) is a yield-curve-weighted index that tracks the market’s expectation of volatility in the U.S. bond market based on 1-month Treasury options.
ICE Exchange-Listed Preferred & Hybrid Securities Index tracks the performance of exchange-listed US dollar denominated hybrid debt, preferred stock and convertible preferred stock publicly issued by corporations in the US domestic market. Preferred stock and notes must have a minimum amount outstanding of $100 million; convertible preferred stock must have at least $50 million face amount outstanding. Index constituents are market capitalization-weighted subject to certain constraints. The index is re-balanced monthly.
Posted on January 18, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
***
Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
WASHINGTON — The US Supreme Court on Friday delivered a blow to TikTok by upholding a law that could potentially lead to the video-sharing social media platform being banned in the United States. The justices in an unsigned opinion with no dissents rejected a free speech challenge filed by the company, meaning the law is set to go into effect on Sunday as planned. The bipartisan law requires China-based TikTok owner ByteDance to divest itself of the company by Sunday, the day before President-elect Donald Trump is to take office. If no sale takes place, the platform used by millions of Americans will in theory be banned.
Legendary short seller Nate Andersonannounced this week that he is shutting down his firm, Hindenburg Research, due to extreme job stress. With only 11 employees, Anderson took gargantuan swings at companies—and their billionaire leaders. Hindenburg published deeply researched reports about companies it believed were overvalued and rife with corruption. It got its big break when it shorted electric truck-maker Nikola in 2020, calling the company an “intricate fraud.” Regulators took note, and it led to three fraud convictions for Nikola founder Trevor Milton.
US stocks jumped on Friday amid a tech stock revival as investors assessed a week of key data and earnings reports alongside potential policy shifts under a Trump administration.
The Dow Jones Industrial Average (^DJI) gained 0.8% while the S&P 500 (^GSPC) rose 1%, coming off a losing day for the major gauges. The tech-heavy NASDAQ Composite (^IXIC) put on 1.5% as Nvidia (NVDA) and Tesla (TSLA) shares nudged back into the green.
The US Department of Justice (DOJ) filed a lawsuit against Walgreens (WBA), one of the nation’s largest pharmacy chains, alleging widespread prescription drug practice violations. According to the DOJ, Walgreens improperly dispensed millions of prescriptions from August 2012 to the present day that either lacked “legitimate medical purpose” or were otherwise invalid.
The Bloomberg U.S. Universal Index represents the union of the U.S. Aggregate Index, U.S. Corporate High Yield Index, Investment Grade 144A Index, Eurodollar Index, U.S. Emerging Markets Index, and the non-ERISA eligible portion of the CMBS Index.
The index covers USD-denominated, taxable bonds that are rated either investment grade or high-yield. Some Bloomberg U.S. Universal Index constituents may be eligible for one or more of its contributing sub-components that are not mutually exclusive. These securities are not double-counted in the index.
The Bloomberg U.S. Universal Index was created on January 1st, 1999, with index history back-filled to January 1st, 1990.
HFRX Equity Hedge Index serves as a daily-priced proxy for alternative strategies that maintain positions long and short, primarily in equity and equity derivative securities.
HFRX Fixed Income – Credit Index serves as a daily-priced proxy for alternative strategies that provide exposure to credit strategies. Credit strategies refers to a wide range of sub-strategies and may include corporate, sovereign, distressed, asset-backed, capital structure arbitrage, and other relative value approaches. Strategies may also include and utilize equity securities, credit derivatives, commodities, or currencies.
Academic Team of Internationally Known Contributors
D. E. Marcinko & Associates is one of the most academically published authorities on the topic of financial planning and private wealth management for physicians, nurses and medical professionals. We have published 33 major peer reviewed textbooks redacted in the Library of Medicine, Institute of Health and the Library of Congress, in four languages, with over 5,025 online white papers, web-posts and related publications. These cover a range of financial planning topics from medical malpractice, risk management and insurance, to investment policy statement analysis and endowment funding management, and to taxation, retirement, estate and legacy planning.
Financial planning, business and strategic management, FMV for practice and clinics and related “hard” topics are included.
***
We also include “soft” subjects from investor psychology, ethics and lost fortunes to luxury spending, from understanding the middle-class millionaire to the political philosophies of physicians and the affluent. Our corpus of work is regularly consulted by doctors, medical, business, graduate and nursing schools, to elite advisors, private and investment bankers, wealth managers, venture capitalists, academics and the press.
Did you know that at MARCINKO & Associates, all medical colleagues throughout the United States may contact us when they are considering the sale, purchase, strategic operating improvement, merger, acquisition and/or other financial business or related personal financial planning transaction?
Our difference is “hard” knowledge and insider financial guidance that helps medical colleagues, nurses, private practitioners, clinics, ambulatory surgery, radiology and outpatient wound care centers realize their ultimate economic goals. This typically includes managerial and cost accounting, financial ratio analysis, fair market valuation business appraisals, business plan creation and personal financial planning.
Our “expert witness” business litigation support service and divorce mediation, arbitration, asset division, settlement and second opinion offerings are always available, as well.
And, our “soft” skill professional career guidance and mentoring center includes executive coaching, consulting and mentoring advisory programs for stressed, conflicted or burned-out physicians and medical practitioners.
Most importantly, our professional fees are reasonable and always transparent.
MARCINKO & Associates also serves universities, medical, business, graduate and nursing schools; physicians, dentists, podiatrists, optometrists and legal societies. This includes accountants, financial service providers, wealth and hedge fund managers, emerging entities, hospitals, CEOs and their BODs, the press, media and related organizations.
Extended equity strategies attempt to provide better returns than possible with long-only investments.
An example of an extended equity strategy is a 130/30 portfolio, which gets its designation from taking a 130% long position and a 30% short position. In practice, this would mean $100mm invested in stocks that are viewed as attractive. Next, the manager would borrow and sell short $30mm of unattractive stocks. Then the manager uses the proceeds from the short sale to buy an additional $30mm of attractive stocks. This results in a portfolio that has 130% long and 30% short exposure to stocks, or “extended” exposure to equities relative to a long-only, 100% stock portfolio.
Nevertheless, it’s important to point out that here is the risk of theoretical unlimited amount of loss with short selling, (i.e. the price of the short-sold stocks increases; the long position can only go down to $0).
You can listen to a professional narration of this article on iTunes & online.
I have a problem with both growth and value demagogues.
Growth demagogues will argue that valuation is irrelevant for high-growth companies because the price you pay for growth doesn’t matter. They usually say this after a very extended move in growth stocks, where these investors look like gods that walk on water. They call value investors “accountants.”
The price you pay matters (this is not a new message). As we’ve discussed in the past, if you bought great, high-growth companies near the end of the Nifty Fifty bubble in the 1960s or near the end of the dotcom bubble in the 1990s, it took more than a decade to break even (after first struggling through double-digit losses).
Posted on January 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
***
Credit report with score on a desk
***
Credit analysis is a form of financial analysis used primarily to determine the financial strength of the issuer of a security, and the ability of that issuer to provide timely payment of interest and principal to investors in the issuer’s debt securities. Credit analysis is typically an important component of security analysis and selection in credit-sensitive bond sectors such as the corporate bond market and the municipal bond market.
Credit default swap index (CDX) is a credit derivative, based on a basket of CDS, which can be used to hedge credit risk or speculate on changes in credit quality.
Credit default swaps (CDS) are credit derivative contracts between two counterparties that can be used to hedge credit risk or speculate on changes in the credit quality of a corporation or government entity.
Credit quality reflects the financial strength of the issuer of a security, and the ability of that issuer to provide timely payment of interest and principal to investors in the issuer’s securities. Common measurements of credit quality include the credit ratings provided by credit rating agencies such as Standard & Poor’s and Moody’s. Credit quality and credit quality perceptions are a key component of the daily market pricing of fixed-income securities, along with maturity, inflation expectations and interest rate levels.
Credit Rating Agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In the United States, the Securities and Exchange Commission (SEC) permits investment banks and broker-dealers to use credit ratings from “Nationally Recognized Statistical Rating Organizations” (NRSRO) for similar purposes. As of January 2012, nine organizations were designated as NRSROs, including the “Big Three” which are Standard and Poor’s, Moody’s Investor Services and Fitch Ratings.
Credit rating downgrade, by a credit rating agency (Standard & Poor’s, Moody’s or Fitch) means reducing its credit rating for a debt issuer and/or security. This is based on the agency’s evaluation, indicating, to the agency, a decline in the issuer’s financial stability, increasing the possibility of default. A downgrade should not to be confused with a default; a debt security can be downgraded without defaulting. And, conversely, a debt issuer can suddenly default without being downgraded first–credit ratings and credit rating agencies are not infallible.
Credit ratings are measurements of credit quality provided by credit rating agencies. Those provided by Standard & Poor’s typically are the most widely quoted and distributed, and range from AAA (highest quality; perceived as least likely to default) down to D (in default). Securities and issuers rated AAA to BBB are considered/perceived to be “investment-grade”; those below BBB are considered/perceived to be non-investment-grade or more speculative.
Credit risk is the inability or perceived inability of the issuers of debt securities to make interest and principal payments will cause the value of those securities to decrease. Changes in the credit ratings of debt securities could have a similar effect.
Credit Risk Transfer Securities (CRTS) are unsecured obligations of the GSEs (Government Sponsored Enterprises). Although cash flows are linked to prepays and defaults of the reference mortgage loans, the securities are unsecured loans, backed by general credit rather than by specified assets.
Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds.
THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 