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As fellow doctors, we understand better than most the more complex financial challenges physicians 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.
And you may be misled by unscrupulous “advisors”.
For example:
Question: Do you know the difference between a “Fee-Only” and a “Fee-Based financial advisor? Not knowing may cost you tens of thousands of dollars, or more, in excessive advisory fees.
Posted on March 4, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
Spiked in 2023
By Staff Reporters
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Healthcare company bankruptcies spiked in 2023 amid high interest rates, rising labor and supply costs, and an uptick in denials from payers, according to a January report from healthcare restructuring firm Gibbins Advisors.
For example, Seventy-nine healthcare companies filed for bankruptcy in 2023—the highest number since 2019, which saw 51 bankruptcies, according to the report. The volume of bankruptcies last year was nearly 2x as high as 2022 and over 3x the level seen in 2021.
“We saw a dramatic increase in healthcare bankruptcy filings in 2023, continuing the trend which began in mid-2022,” Clare Moylan, co-founder and principal at Gibbins Advisors, said in a statement. “Key observations from 2023 are the return of large bankruptcy cases with over $100 million in liabilities, and a spike in hospital filings, both of which appear to primarily be a result of Covid-19 pandemic-related protections ending.”
Our virtual consulting model at DE MARCINKO & ASSOCIATES offer services to their clients primarily or entirely online, by phone or video-conference.
This means that no matter where you are or choose to live, you’re always just an email, telephone call or Zoom® conference away from a face-to-face meeting.
THE CONSULTATION IS VIRTUAL – THE INFORMATIONAL ADVICE IS REAL !
Posted on March 3, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks were ripping last week, with the NASDAQ notching an all-time high and the S&P 500 closing above 5,100 for the first time. Tech stocks led the way, especially Nvidia, which closed with a market cap over $2 trillion. But trouble may be brewing at regional banks:New York Community Bancorpplummeted after swapping out its CEO and revealing it had found weaknesses in its risk controls.
The IRS is going after people who earned between $400,000 and $1 million but failed to file tax returns as far back as 2017.
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Elon Musksued OpenAI and its co-founders, CEO Sam Altman and President Greg Brockman, Friday, alleging that they breached the organization’s founding agreement by letting it become too profit-motivated.
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The CDC says you no longer need to isolate for five days if you have COVID-19 as long as you’re fever-free and your symptoms are improving.
Posted on March 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Welcome back to the Gregorian calendar. Along with being a leap day, yesterday was Rare Disease Day—bringing visibility to the 7,000 conditions that each affect fewer than 200,000 people in the US. Combined, around 10% of US residents have one, per the National Institute of Health.
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Rite Aid is planning to close 77 stores in 2024 as part of its Chapter 11 bankruptcy.
That makes 431 stores that the drugstore chain has decided to close since October.
Rite Aid has been shrinking its store count for years, losing ground to rivals Walgreens and CVS.
The S&P 500 index added 40.81 points (0.8%) to 5,137.08, up 0.95% for the week and its seventh weekly gain in the past eight; the Dow Jones Industrial Average® (DJI) gained 90.99 points (0.2%) to 39,087.38, down 0.1% for the week; the NASDAQ Composite rose 183.02 points (1.1%) to 16,274.94, up 1.7% for the week.
The 10-year Treasury note yield fell about 7 basis points to 4.182%.
The CBOE Volatility Index® (VIX) dropped 0.29 to 13.11.
Chipmaker strength drove a 4.3% advance in the Philadelphia Semiconductor Index (SOX), which ended at a record high. The NASDAQ-100®(NDX), which includes the NASDAQ’s largest non-financial companies, also ended at a record high. Small-cap shares finished the week strong. The Russell 2000® Index (RUT) rose 1.1% to settle at a 23-month high and notched a 3% gain for the week.
Banks were among the weakest performers as concerns over regional lenders flared up, underscored by another nosedive in shares of troubled New York Community Bancorp (NYCB).
Posted on February 29, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
HAPPY LEAP YEAR DAY
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Stocks fell yesterday, while bitcoin almost touched an all-time high after surging 20% in five days as its halving approaches. UnitedHealth dipped on reports that antitrust regulators are investigating the massive insurer.
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Here’s where the major benchmarks ended:
The S&P 500® index (SPX) fell 8.42 points (0.2%) to 5,069.76; the Dow Jones Industrial Average lost 23.39 points (0.1%) to 38,949.02; the NASDAQ Composite® (COMP) declined 87.56 points (0.6%) to 15,947.74.
The 10-year Treasury note yield (TNX) fell about 5 basis points to 4.264%.
The CBOE Volatility Index® (VIX) rose 0.39 to 13.82.
Regional banks and semiconductors were among the weakest performers Wednesday, and communications services and health care shares were also soft. Real estate shares bucked the weakness in many sectors to post firm gains. Food and beverage and consumer discretionary sectors also firmed. In other markets, WTI crude oil (/CL) futures rose to a three-month high at $79.62 per barrel before ending lower after the Energy Information Administration reported a rise in U.S. inventories.
Posted on February 28, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
Pay for Performance Initiatives
[By Staff Writers]
Of course, consumer directed healthcare trends and fee transparency increasingly mandate physician economic accountability, such as in the P4P initiatives, but CMS may also begin profiling physicians and targeting those it deems inefficient sometime next year, as well.
In May 2007, Herbert Kuhn, acting deputy administrator of CMS, told a House subcommittee that the agency will have the data and computer capacity available to do tracking as soon as mid-2008.
To monitor efficiency, CMS would compare levels of tests physicians order for certain types of patients to tests ordered by other doctors who achieve similar outcomes. The agency would then contact the physicians whose testing patterns seem to be out of line. No doubt, the effects on private pay-for-performance [P4P] initiatives is obvious. Kuhn told the subcommittee that his largest concern was figuring out how to use the data to help physicians grow more efficient.
Assessment
To date, the agency hasn’t established plans to link efficiency measures with reimbursement changes. If it wants to do so, Congress would probably have to enact new legislation, according to several policymakers.
Conclusion
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Posted on February 27, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks fell as the Dow got a special delivery from Amazon, which joined the index yesterday, replacing Walgreens. That didn’t give the Dow a boost for the day, but it should help the index—whose performance is trailing the S&P 500—going forward by giving it more tech power.
Here’s where the major benchmarks ended:
The S&P 500 index fell 19.27 points (0.4%) to 5,069.53; the Dow Jones Industrial Average® (DJI) lost 62.30 points (0.2%) to 39,069.23; the NASDAQ Composite® (COMP) dropped 20.57 points (0.1%) to 15,976.25.
The 10-year Treasury note yield (TNX) rose about 2 basis points to 4.28%.
The CBOE Volatility Index® (VIX) fell 0.01 to 13.74.
Utility shares were among the weakest performers Monday, which may reflect pressure from Treasury yields that remain at their highest levels in over two months. High Treasury yields may compel some investors to forgo utility shares, which typically offer relatively high dividend yields. Communication services companies were also weak. Among stronger areas, the Russell 2000® (RUT) gained 0.6% for its third-straight daily advance.
Posted on February 26, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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On Tuesday, February 20th, the S&P Dow Jones Indices, which oversees additions and subtractions to the highly followed Dow Jones Industrial Average, announced that, as of the start of trading on Monday, February, 26th pharmacy chain Walgreens Boots Alliance (NASDAQ: WBA) would be getting the literal boot.
Meanwhile, e-commerce kingpinAmazon (NASDAQ: AMZN) will be taking its place.
And, Redditfiled to go public last week in an IPO that will resemble the platform itself—unusual, chaotic, and reliant on its opinionated users. Planned for next month, Reddit’s public listing will be the first social media IPO since Pinterest in 2019 and the first major tech IPO of the year.
Posted on February 24, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
OBTUSE METER?
By Staff Reporters
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What is Delta?
FINANCE: Delta is a risk sensitivity measure used in assessing derivatives. It is one of the many measures that are denoted by a Greek letter. The series of risk measures that use such letters are fittingly referred to as the Greeks. They are often also called risk measures, hedge parameters, or risk sensitivities.
ACCOUNTING: Delta is the ratio of the change in price of an option to the change in price of the underlying asset. Also called the hedge ratio; For a call option on a stock, a delta of 0.50 means that for every $1.00 that the stock goes up, the option price rises by $0.50.
Posted on February 23, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
DR. DAVID EDWARD MARCINKO MBA MEd CMP
By Staff Reporters
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DEFINITION: Behavioral economics is grounded in empirical observations of human behavior, which have demonstrated that people do not always make what neoclassical economists consider the “rational” or “optimal” decision, even if they have the information and the tools available to do so.
For example, why do people often avoid or delay investing in 401ks or exercising, even if they know that doing those things would benefit them? And why do gamblers often risk more after both winning and losing, even though the odds remain the same, regardless of “streaks”?
By asking questions like these and identifying answers through experiments, the field of behavioral economics considers people as human beings who are subject to emotion and impulsivity, and who are influenced by their environments and circumstances.
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The state and federal governments and health insurance companies are harnessing lessons from a still-emerging academic field of behavioral economics to nudge clients and customers into spending more money.
“Behavioral economics was developed by incorporating ideas from psychology into standard economic theories,” said Cait Lamberton, a professor of marketing at the University of Pennsylvania’s Wharton School. “If you see a deal that is available for only a short amount of time [like Medicare open enrollment periods], and thus pay more than you usually would, standard economics would say you’ve made an irrational decision. Behavioral economics says that no, what your brain is doing is responding to scarcity.”
These seemingly irrational choices are called “biases,” many of which can affect how we shop. For example, “loss aversion” makes us hypersensitive to losing money and more likely to buy something like whole life insurance for children.
The “decoy effect” makes us more likely to choose between two sub-optimal options when a third, even worse option is presented. For example, Medicare Part D providers may offer a decoy like an high costs, which may make the cheaper Medicare Part C with more [so-called] benefits look more appealing.
Most companies are well aware of these tendencies and how they drive our decisions. So to save money customers, patients and clients need to understand how the purchasing and shopping experience has been engineered to exploit our biases.
Managed care insurers have profited handsomely from Medicare Advantage plans, scoring billions in annual profits. They credit this financial wizardry to their use of sophisticated data analytics, preventative care, cost optimization, provider networks, evidence and value-based care and risk mitigation strategies. However, doctors, hospitals, and medical providers assert something else.
In fact, Medicare Advantage plans have been making headlines in 2024, but not in a positive light, at least for health insurance companies. Medicare is a government-sponsored health insurance benefit; generally for retired people aged 65 and older.
For most, the money for Medicare Part B medical insurance or Part C Medicare Advantage plans is withdrawn directly from Social Security benefits monthly, coupled with a relatively small monthly payment from the patient. Nearly half of the Medicare population is enrolled in Part C Medicare Advantage plans.
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However, there have been rumblings in the medical sector between medical providers and medical insurers coming to a head. So, where do you stand?
Posted on February 21, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks fell to start the week as investors awaited Nvidia’s big earnings report today. Recent earnings for tech companies in the so-called Magnificent Seven have been a mixed bag, but as a group, they have never been stronger. Meanwhile, Intuitive Machines’s stock zoomed as its pilot less spacecraft remained on track to touch down on the lunar surface Thursday.
Here’s where the major benchmarks ended:
The S&P 500® index (SPX) fell 30.06 points (0.6%) to 4,975.51; the Dow Jones Industrial Average lost 64.19 points (0.2%) to 38,563.80; the NASDAQ Composite declined 144.87 points (0.9%) to 15,630.78.
The 10-year Treasury note yield (TNX) fell about 2 basis points to 4.275%.
The CBOE Volatility Index® (VIX) rose 0.71 to 15.42.
Nvidia shares fell 4.4%, weakness that helped drag down shares of other chip makers and contributed to a drop of 1.6% in the Philadelphia Semiconductor Index (SOX), which ended near a two-week low. Energy shares also took pressure as WTI crude oil futures (/CL) sank 1.6%. Small caps were also soft, as the Russell 2000® Index (RUT) dropped 1.4%.
Informational essays of most current interest to healthcare professionals. Check back periodically for practical updates. Our catalogue library of major books, texts, case models and dictionaries is suggested for additional financial, economic, business and medical practice management information and education.
Posted on February 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
Get ’em … While They are Hot!
By Ann Miller RN MHA
[ME-P Executive Director]
Just click on the book icon to order; get any one or all three! You’ll be glad you did.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
Bank of America just acknowledged that the personal information of 57,028 of its customers has been compromised. This breach, attributed to a failure at Infosys McCamish Systems (IMS), a provider of insurance business process solutions engaged by the bank, poses a substantial risk of identity theft to the affected individuals.
The data breach notification, filed in Maine, reveals that sensitive information related to Bank of America’s deferred compensation plans was inadvertently accessed. IMS, in a notification letter to customers, disclosed that the compromised data encompasses a range of critical personal details. The accessed information includes customers’ names, addresses, business email addresses, dates of birth, Social Security numbers, and other account specifics. Such data is typically all required for an identity thief to execute fraudulent activities under another person’s name.
IMS’s admission that it might never be able to precisely identify what information was accessed underscores the severity and potential long-term consequences of the breach. This uncertainty adds an additional layer of anxiety for customers, highlighting the challenges in mitigating the aftermath of such security failures.
Finally, Walmart and Home Depot will be the star of the show this week they report their earnings for the holiday quarter. Nvidia will also try to keep its historic hot streak going when it reports on Wednesday—expectations are through the roof.
Running a business involves a constant learning curve. And that applies whether you’re a rookie entrepreneur just starting out with a great idea for a new business or a more established small business owner with a quickly growing business that needs to expand. You should always be learning as a business owner, no matter where you are in your career—there’s always a new tool to master, new problems to solve, and new vocabulary to understand.
In order to not get totally overwhelmed, it’s helpful to take things one segment at a time. For instance, feeling confident when discussing the business’s financial needs should be a priority for every small business owner. After all, you represent the heart and soul of your business in the marketplace. So knowing the “language” of business finance is an integral part of your job as the owner.
The good news is that you don’t have to be an accountant or a financial planner to negotiate in the world of business finance. Here are some business terms and finance terms that will help you find your way to successful small business funding. https://www.youtube.com/embed/0kD4X2fgxGs
Business and Finance Terms to Know
From accounting, to business loans, to general business financial operations, here’s the ultimate list to all the business finance terms and definitions you need to know:
1. Accounts Payable
Accounts payable is a business finance 101 term. This represents your small business’s obligations to pay debts owed to lenders, suppliers, and creditors. Sometimes referred to as A/P or AP for short, accounts payable can be short or long term depending upon the type of credit provided to the business by the lender.
2. Accounts Receivable
Also known as A/R (or AR, good guess), accounts receivables is another business finance 101 term that means the money owed to your small business by others for goods or services rendered. These accounts are labeled as assets because they represent a legal obligation for the customer to pay you cash for their short-term debt.
3. Accrual Basis
The accrual basis of accounting is an accounting method of recording income when it’s actually earned and expenses when they actually occur. Accrual basis accounting is the most common approach used by larger businesses to record and maintain financial transactions.
4. Accruals
A business finance term and definition referring to expenses that have been incurred but haven’t yet been recorded in the business books. Wages and payroll taxes are common examples.
5. Asset
This business finance key term is anything that has value—whether tangible or intangible—and is owned by the business is considered an asset. Typical items listed as business assets are cash on hand, accounts receivable, buildings, equipment, inventory, and anything else that can be turned into cash.
6. Balance Sheet
Along with three other reports relating to the financial health of your small business, the balance sheet is essential information that gives a “snapshot” of the company’s net worth at any given time. The report is a summary of the business assets and liabilities.
7. Bookkeeping
A method of accounting that involves the timely recording of all financial transactions for the business.
8. Capital
Refers to the overall wealth of a business as demonstrated by its cash accounts, assets, and investments. Often called “fixed capital,” it refers to the long-term worth of the business. Capital can be tangible, like durable goods, buildings, and equipment, or intangible such as intellectual property.
9. Working Capital
Not to be confused with fixed capital, working capital is another business finance 101 term. It consists of the financial resources necessary for maintaining the day-to-day operation of the business. Working capital, by definition, is the business’s cash on hand or instruments that you can convert to cash quickly.
10. Cash Flow
Every business needs cash to operate. The business finance term and definition cash flow refers to the amount of operating cash that “flows” through the business and affects the business’s liquidity. Cash flow reports reflect activity for a specified period of time, usually one accounting period or one month. Maintaining tight control of cash flow is especially important if your small business is new, since ready cash can be limited until the business begins to grow and produce more working capital.
11. Cash Flow Projections
Future business decisions will depend on your educated cash flow projections. To plan ahead for upcoming expenditures and working capital, you need to depend on previous cash flow patterns. These patterns will give you a comprehensive look at how and when you receive and spend your cash. This info is the key to unlock informed, accurate cash flow projections.
12. Depreciation
The value of any asset can be said to depreciate when it loses some of that value in increments over time. Depreciation occurs due to wear and tear. Various methods of depreciation are used by businesses to decrease the recorded value of assets.
13. Fixed Asset
A tangible, long-term asset used for the business and not expected to be sold or otherwise converted into cash during the current or upcoming fiscal year is called a fixed asset. Fixed assets are items like furniture, computer equipment, equipment, and real estate.
14. Gross Profit
This business finance term and definition can be calculated as total sales (income) less the costs (expenses) directly related to those sales. Raw materials, manufacturing expenses, labor costs, marketing, and transportation of goods are all included in expenses.
15. Income Statement
Here is one of the four most important reports lenders and investors want to see when evaluating the viability of your small business. It is also called a profit and loss statement, and it addresses the business’s bottom line, reporting how much the business has earned and spent over a given period of time. The result will be either a net gain or a net loss.
16. Intangible Asset
A business asset that is non-physical is considered intangible. These assets can be items like patents, goodwill, and intellectual property.
17. Liability
This business finance key term is a legal obligation to repay or otherwise settle a debt. Liabilities are considered either current (payable within one year or less) or long-term (payable after one year) and are listed on a business’s balance sheet. A business’s accounts payable, wages, taxes, and accrued expenses are all considered liabilities.
18. Liquidity
Liquidity is an indicator of how quickly an asset can be turned into cash for full market value. The more liquid your assets, the more financial flexibility you have.
19. Profit & Loss Statement
See “Income Statement” above.
20. Statement of Cash Flow
One of the important documents required by lenders and investors that shows a summary of the actual collection of revenue and payment of expenses for your business. The statement of cash flow should reflect activity in the areas of operating, investing, and financing and should be an integral part of your financial statement package.
21. Statement of Shareholders’ Equity
If you have chosen to fund your small business with equity financing and you have established shares and shareholders as part of the controlling interests, you are obligated to provide a financial report that shows changes in the equity section of your balance sheet.
22. Annual Percentage Rate
The business finance term and definition APR represents the yearly real cost of a loan including all interest and fees. The total amount of interest to be paid is based on the original amount loaned, or the principal, and is represented in percentage form. When shopping for the right loan for your small business, you should know the APR for the loan in question. This figure can be very helpful in comparing one financial tool with another since it represents the actual cost of borrowing.
23. Appraisal
Just like your real estate appraisal when buying a house, an appraisal is a professional opinion of market value. When closing a loan for your small business, you will probably need one or more of the three types of appraisals: real estate, equipment, and business value.
24. Balloon Loan
A loan that is structured so that the small business owner makes regular repayments on a predetermined schedule and one much larger payment, or balloon payment, at the end. These can be attractive to new businesses because the payments are smaller at the outset when the business is more likely to be facing strict financial constraints. However, be sure that your business will be capable of making that last balloon payment since it will be a large one.
25. Bankruptcy
This federal law is used as a tool for businesses or individuals who are having severe financial challenges. It provides a plan for reduction and repayment of debts over time or an opportunity to completely eliminate the majority of the outstanding debts. Turning to bankruptcy should be given careful thought because it will have a negative effect on the business credit score.
26. Bootstrapping
Using your own money to finance the start-up and growth of your small business. Think of it as being your own investor. Once the business is up and running successfully, the business finance term and definition bootstrapping refers to the use of profits earned to reinvest in the business.
27. Business Credit Report
Just like you have a personal credit report that lenders look at to determine risk factors for making personal loans, businesses also generate credit reports. These are maintained by credit bureaus that record information about a business’s financial history.
Items like how large the company is, how long has it been in business, amount and type of credit issued to the business, how credit has been managed, and any legal filings (i.e., bankruptcy) are all questions addressed by the business credit report. Lenders, investors, and insurance companies use these reports to evaluate risk exposure and financial health of a business.
28. Business Credit Score
A business credit score is calculated based on the information found in the business credit report. Using a specialized algorithm, business credit scoring companies take into account all the information found on your credit report and give your small business a credit score. Also called a commercial credit score, this number is used by various lenders and suppliers to evaluate your creditworthiness.
29. Collateral
Any asset that you pledge as security for a loan instrument is called collateral. Lenders often require collateral as a way to make sure they won’t lose money if your business defaults on the loan. When you pledge an asset for collateral, it becomes subject to seizure by the lender if you fail to meet the requirements of the loan documents.
30. Credit Limit
When a lender offers a business line of credit it usually comes with a credit limit, or a maximum amount that you can use at any given time. It is said that you reach your credit limit or “max out” your credit when you borrow up to or exceed that number. A business line of credit can be especially useful if your business is seasonal or if the income is extremely unpredictable. It is one of the fastest ways to access cash for emergencies.
31. Debt Consolidation
If your small business has several loans with various payments, you might want to consider a business debt consolidation loan. It is a process that lets you combine multiple loans into a single loan. The advantages are possibly reducing the interest rates on the borrowed funds as well as lowering the total amount you repay each month. Businesses use this tool to help improve cash flow.
32. Debt Service Coverage Ratio
The business finance term and definition debt service coverage ratio (DSCR) is the ratio of cash your small business has available for paying or servicing its debt. Debt payments include making principal and interest payments on the loan you are requesting. Generally speaking, if your DSCR is above 1, your business has enough income to meet its debt requirements.
33. Debt Financing
When you borrow money from a lender and agree to repay the principal with interest in regular payments for a specified period of time, you’re using debt financing. Traditionally, it has been the most common form of funding for small businesses.
Debt financing can include borrowing from banks, business credit cards, lines of credit, personal loans, merchant cash advances, and invoice financing. This method creates a debt that must be repaid but lets you maintain sole control of your business.
34. Equity Financing
The act of using investor funds in exchange for a piece or ”share” of your business is another way to raise capital. These funds can come from friends, family, angel investors, or venture capitalists.
Before deciding to use equity financing to raise the cash necessary for your business, decide how much control you are willing to share when it comes to decision-making and philosophy. Some investors will also want voting rights.
35. FICO Score
A FICO score is another type of credit score used by potential lenders for evaluating the wisdom of entering a contract with you and your business. FICO scores comprise a substantial part of the credit report that lenders use to assess credit risk. It was created by the Fair Isaac Corporation, hence the name FICO.
36. Financial Statements
An integral part of the loan application process is furnishing information that shows your business is a good credit risk. The standard financial statement packet includes four main reports: the income statement, the balance sheet, the statement of cash flow, and the statement of shareholders’ equity, if you have shareholders.
Lenders and investors want to see that your business is well-balanced with assets and liabilities, has positive cash flow, and will have capital to make expected repayments.
37. Fixed Interest Rate
The interest rate on a loan that is established in the beginning and does not change for the lifetime of the loan is said to be fixed. Loans with fixed interest rates are appealing to small business owners because the repayment amounts are consistent and easier to budget for in the future.
38. Floating Interest Rate
In contrast to the business finance term and definition fixed rate, the floating interest rate will change with market fluctuations. Also referred to as variable rates or adjustable rates, these amounts may often start out lower than the fixed rate percentages. This makes them more appealing in the short term if the market is trending down.
39. Guarantor
When starting a new small business, lenders might want you to provide a guarantor. This is an individual who guarantees to cover the balance owed on a debt if you or your business cannot meet the repayment obligation.
40. Interest Rate
All loans and other lending instruments are assigned the business finance key term interest rates. This is a percentage of the principal amount charged by the lender for the use of its money. Interest rates represent the current cost of borrowing.
41. Invoice Factoring or Financing
If your business has a significant amount of open invoices outstanding, you may contact a factoring company and have them purchase the invoices at a discount. By raising capital this way, there is no debt, and the factoring company assumes the financial responsibility for collecting the invoice debts.
42. Lien
This business finance term and definition is a creditor’s legal claim to the collateral pledged as security for a loan is called a lien.
43. Line of Credit
A lender may offer you an unsecured amount of funds available for your business to draw on when capital is needed. This line of credit is considered a short-term funding option, with a maximum amount available. This pre-approved pool of money is appealing because it gives you quick access to the cash.
44. Loan-to-Value
The LTV comparison is a ratio of the fair-market value of an asset compared to the amount of the loan that will fund it. This is another important number for lenders who need to know if the value of the asset will cover the loan repayment if your business defaults and fails to pay.
45. Long-Term Debt
Any loan product with a total repayment schedule lasting longer than one year is considered a long-term debt.
46. Merchant Cash Advance
A merchant may offer a funding method through a loan based on the business’s monthly sales volume. Repayment is made with a percentage of the daily or weekly sales. These tend to be short-term loans and are one of the costliest ways to fund your small business.
47. Microloan
Microloans are loans made through nonprofit, community-based organizations and they are most often for amounts under $50,000.
48. Personal Guarantee
If you’re seeking financing for a very new business and don’t have a high value asset to offer as collateral, you may be asked by the lender to sign a statement of personal guarantee. In effect, this statement affirms that you as an individual will act as guarantor for the business’s debt, making you personally liable for the balance of the loan even in the event that your business fails.
49. Principal
Any loan instrument is made of three parts—the principal, the interest, and the fees. The principal is a business finance key term and is the original amount that is borrowed or the outstanding balance to be repaid less interest. It is used to calculate the total interest and fees charged.
50. Revolving Line of Credit
This business finance term and definition is a funding option is similar to a standard line of credit. However, the agreement is to lend a specific amount of money, and once that sum is repaid, it can be borrowed again.
51. Secured Loan
Many lenders will require some form of security when loaning money. When this happens, this business finance term and definition is a secured loan. The asset being used as collateral for the loan is said to be “securing” the loan. In the event that your small business defaults on the loan, the lender can then claim the collateral and use its fair-market value to offset the unpaid balance.
52. Term Loan
These are debt financing tools used to raise needed funds for your small business. Term loans provide the business with a lump sum of cash up front in exchange for a promise to repay the principal and interest at specified intervals over a set period of time. These are typically longer term, one-time loans for start-up expenses or costs for established business expansion.
53. Unsecured Loans
Loans that are not backed by collateral are called unsecured loans. These types of loans represent a higher risk for the lender, so you can expect to pay higher interest rates and have shorter repayment time frames. Credit cards are an excellent example of unsecured loans that are a good option for small business funding when combined with other financing options.
54. Articles of Incorporation
This is legal documentation of the business’s creation, including name, type of business, and type of business structure or incorporation. This paperwork is one of the first tasks you will complete when you officially start your business. Once submitted, your articles of incorporation are kept on file with the appropriate governmental agencies.
55. Business Plan
Here is your tool for demonstrating how you want to establish your small business and how you plan to grow it into good financial health. When writing a business plan, it should include financial, operational, and marketing goals as well as how you plan to get there. The more specific you are with your business plan, the better prepared you will be in the long run.
56. Employer Identification Number (EIN) Certificate
In order to be more easily identified by the Internal Revenue Service, every business entity is assigned a unique number called an EIN. When you start your small business, an EIN will be assigned and mailed to the business address. This number never changes, and you will be asked to furnish it for many reasons.
57. Franchise Agreement
For a small business entrepreneur, entering into a franchise agreement with a larger company can be a way to enter the marketplace. The agreement made between you and the larger company gives you the right to operate as a satellite of the larger company in a certain territory for a given period of time. This lets you, the business owner, take advantage of a brand name that’s already familiar in the marketplace and a process or operation that has already been tested.
58. Net Worth
This business finance term and definition is an expression of your business’s total value, as determined by your total current assets less the total liabilities currently owed by the business. With your business’s most recent balance sheet in hand, you can calculate the net worth using a simple formula: Assets – Liabilities = Net Worth.
59. Retained Earnings
Just like it sounds, this term represents any profits earned that are retained in the business. This can also be referred to as bootstrapping.
60. Tax Lien
If your business fails to pay taxes owed to the designated government entity, namely the IRS, you may find your assets seized by the claim of a tax lien. The government can not only seize your assets for liquidation to resolve the tax debt, but they can also charge you penalties on the amount you owe.
Don’t Be Overwhelmed by Health Economics, Business and Finance Terms
As a small business owner, physicians are required to wear many different hats—often including that of chief financial officer or bookkeeper. Before you let yourself get intimidated by all the business terms and definitions, just remember that knowledge is power.
You can serve your small practice business, clinic, out-patient center or hospital most effectively by becoming familiar with terms used in business and finance and how they will affect your financial health. Armed with a basic understanding of business finance key terms, you will be prepared to face the financial challenges that go along with being a modern doctor, today!
Posted on February 18, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Nike is planning to restructure and lay off 2% of its staff, more than 1,500 people, as consumers pull back on spending.
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If the total U.S. debt were divided by every household in the country, each household would get about $252,000, according to a September tweet from The Kobeissi Letter.
And, Jerome Powell, the Chair of the Federal Reserve, shared his concerns regarding the fiscal direction of the United States during a “60 Minutes” interview with Scott Pelley.
Powell said, “The U.S. is on an unsustainable fiscal path,” emphasizing that the growth of the national debt is outstripping the growth of the economy.
“”Medical economics and finance is an integral component of the health care industrial complex. Its language is a diverse and broad-based concept covering many other industries: accounting, insurance, mathematics and statistics, public health, provider recruitment and retention, Medicare, health policy, forecasting, aging and long-term care, are all commingled arenas.
The Dictionary of Health Economics and Finance will be an essential tool for doctors, nurses and clinicians, benefits managers, executives and health care administrators, as well as graduate students and patients? With more than 5,000 definitions, 3,000 abbreviations and acronyms, and a 2,000 item oeuvre of resources, readings, and nomenclature derivatives? it covers the financial and economics language of every health care industry sector.”” – From the Preface byDavid Edward Marcinko “
Posted on February 15, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks rose yesterday after they plunged following Tuesday’s unexpectedly hot inflation report. And, investors hit the gas pedal on Uber when the company revealed it would buy back $7 billion worth of shares in its first-ever repurchase plan.
Here’s where the major benchmarks ended:
The S&P 500 index rose 47.45 points (1.0%) to 5,000.62; the Dow Jones Industrial Average® (DJI) gained 151.52 points (0.4%) to 38,424.27; the NASDAQ Composite® (COMP) added 203.55 points (1.3%) to 15,859.15.
The 10-year Treasury note yield (TNX) fell almost 5 basis points to 4.269%.
The CBOE Volatility Index® (VIX) fell 1.47 to 14.38.
Small-cap shares were among the upside leaders Wednesday as the Russell 2000® Index (RUT) surged 2.4% to erase over half of its 4% nosedive on Tuesday. Banks and semiconductors were also among the strongest sectors. Energy companies were under pressure after WTI crude oil (/CL) futures dropped 1.6% in the wake of a larger-than-expected increase in U.S. inventories.
Posted on February 13, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
HAPPY MARDI GRAS
By Staff Reporters
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In welcome news for physicians, a bipartisan group of senators will get to work on Medicare payment reform. The lawmakers plan to propose changes to the physician fee schedule and updates to the 2015 MACRA law.
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Stat: $3+ billion. That’s how much restitution New York State Attorney General Letitia James is now seeking from Digital Currency Group, Genesis Global Capital, and Gemini, the crypto exchange run by the Winklevoss twins, for allegedly defrauding more than 230,000 investors, after initially suing in October (CNBC).
The S&P 500 index fell 4.77 points (0.1%) to 5,021.84; the Dow Jones Industrial Average gained 125.69 points (0.3%) to 38,797.38; the NASDAQ Composite lost 48.12 points (0.3%) to 15,942.55.
The 10-year Treasury note yield (TNX) dropped more than 1 basis point to 4.173%.
The CBOE Volatility Index® (VIX) rose 1.00 to 13.93.
Despite the mixed performance of large-cap stock indexes, several other market sectors got off to a strong start this week. Banking and retail were among the strongest performers, and the small-cap Russell 2000® Index (RUT) surged 1.8% to end at its highest level since late December.
Tech shares erased early gains, with the Philadelphia Semiconductor Index (SOX) fading to a 0.2% loss after earlier rising to a record intra-day high.
Peterson noted shares of many semiconductor companies are well into technically overbought territory, which often can lead to sharp pullbacks, though the timing of such a move is difficult to pinpoint. He cited unusually elevated Relative Strength Index (RSI) readings, at 90-plus, for two AI darlings: Arm Holdings (ARM) and Super Micro Computer (SMCI).
Posted on February 12, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
ByStaff Reporters
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Viamedis did not state how many people were affected by the breach, but it did confirm that it manages third-party payments for 84 complementary health insurance companies which when combined, service 20 million people. As soon as the data breach was spotted, Viamedis disconnected its third-party payment management platform.
“Beneficiaries will be able to continue to use their carte vitale and their third-party payment card, the temporary disconnection from the Viamedis platform will only have an impact on certain health professionals, in particular opticians and audio-prosthetists,” it said.
Speaking to Agence France-Presse (AFP), Viamedis General Director, Christophe Cande, said the attack wasn’t ransomware, but rather a successful phishing attack against one of the company’s employees.
“To date, we do not have the number of insured individuals impacted; we are still in the process of investigation,” Cande said.
Viamedis filed a complaint with the public prosecutor, and notified other relevant authorities. For healthcare professionals, it said it would notify them on the details of exposed data later.
Posted on February 11, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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US Economists just polled by The Wall Street Journal forecast a mild 0.2% in increase in consumer prices in the first month of 2024. The inflation rate in the past 12 months would decelerate to 2.9% from a prior 3.4%. If forecasters are right, it would mark the first time the CPI has fallen below 3% in almost three years.
The drama in the report, if there’s any, is likely to come from the more closely followed core CPI that omits food and energy prices. The core rate is viewed as a better predictor of future inflation. Wall Street expects the core rate to rise 0.3% — the upper limit of what the Fed would find tolerable in the short run. The 12-month increase in the core rate could also dip to 3.7% from 3.9%.
UPS, the shipping giant, which forecast weak demand for parcel delivery in 2024, has said it plans to lay off 12,000 employees to save $1 billion in costs. It’s also mulling a sale of its Coyote brokerage unit.
This shocking announcement was made on January 30th and comes just six months after unionized UPS workers landed a “lucrative” new labor deal, which will see delivery drivers earning an average of $170,000 in annual pay and benefits by the end of the five years. “2023 was a unique, and quite candidly, difficult and disappointing year,” said UPS CEO Carol Tomé during the company’s earnings call. “We experienced declines in volume, revenue and operating profits and all three of our business segments.”
Three healthcare industry groups—America’s Health Insurance Plans (AHIP), the American Medical Association (AMA), and the National Association of Accountable Care Organizations (NAACOS)—released the 36-page playbook on July 25th, 2023. Adoption of the best practices in the playbook is voluntary; the playbook is intended to encourage the adoption of value-based care arrangements in the private sector, according to a news release from the three groups.
Under a value-based care model, providers are reimbursed based on patient outcomes rather than the quantity of services provided like in the traditional fee-for-service model. The value-based care model has been around since the late 1960s. But, widespread adoption has been slow—less than half of the primary care physicians said in a 2022 survey from the Commonwealth Fund that they had received any value-based payments.
ACOs are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.
When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings it achieves for the Medicare program.
Now, suppose that in a new Accountable Care Organization [ACO] contract, a certain medical practice was awarded a new global payment or capitation styled contract that increased revenues by $100,000 for the next fiscal year. The practice had a gross margin of 35% that was not expected to change because of the new business. However, $10,000 was added to medical overhead expenses for another assistant and all Account’s Receivable (AR) are paid at the end of the year, upon completion of the contract.
Cost of Medical Services Provided (COMSP):
The Costs of Medical Services Provided (COMSP) for the ACO business contract represents the amount of money needed to service the patients provided by the contract. Since gross margin is 35% of revenues, the COMSP is 65% or $65,000. Adding the extra overhead results in $75,000 of new spending money (cash flow) needed to treat the patients. Therefore, divide the $75,000 total by the number of days the contract extends (one year) and realize the new contract requires about $ 205.50 per day of free cash flows.
Assumptions
Financial cash flow forecasting from operating activities allows a reasonable projection of future cash needs and enables the doctor to err on the side of fiscal prudence. It is an inexact science, by definition, and entails the following assumptions:
All income tax, salaries and Accounts Payable (AP) are paid at once.
Durable medical equipment inventory and pre-paid advertising remain constant.
Gains/losses on sale of equipment and depreciation expenses remain stable.
Gross margins remain constant.
The office is efficient so major new marginal costs will not be incurred.
Physician Reactions:
Since many physicians are still not entirely comfortable with global reimbursement, fixed payments, capitation or ACO reimbursement contracts; practices may be loath to turn away short-term business in the ACA era. Physician-executives must then determine other methods to generate the additional cash, which include the following general suggestions:
1. Extend Account’s Payable
Discuss your cash flow difficulties with vendors and emphasize their short-term nature. A doctor and her practice still has considerable cache’ value, especially in local communities, and many vendors are willing to work them to retain their business
2. Reduce Accounts Receivable
According to most cost surveys, about 30% of multi-specialty group’s accounts receivable (ARs) are unpaid at 120 days. In addition, multi-specialty groups are able to collect on only about 69% of charges. The rest was written off as bad debt expenses or as a result of discounted payments from Medicare and other managed care companies. In a study by Wisconsin based Zimmerman and Associates, the percentages of ARs unpaid at more than 90 days is now at an all time high of more than 40%. Therefore, multi-specialty groups should aim to keep the percentage of ARs unpaid for more than 120 days, down to less than 20% of the total practice. The safest place to be for a single specialty physician is probably in the 30-35% range as anything over that is just not affordable.
The slowest paid specialties (ARs greater than 120 days) are: multi-specialty group practices; family practices; cardiology groups; anesthesiology groups; and gastroenterologists, respectively. So work hard to get your money, faster. Factoring, or selling the ARs to a third party for an immediate discounted amount is not usually recommended.
3. Borrow with Short-Term Bridge Loans
Obtain a line of credit from your local bank, credit union or other private sources, if possible in an economically constrained environment. Beware the time value of money, personal loan guarantees, and onerous usury rates. Also, beware that lenders can reduce or eliminate credit lines to a medical practice, often at the most inopportune time.
4. Cut Expenses
While this is often possible, it has to be done without demoralizing the practice’s staff.
5. Reduce Supply Inventories
If prudently possible; remember things like minimal shipping fees, loss of revenue if you run short, etc.
6. Taxes
Do not stop paying withholding taxes in favor of cash flow because it is illegal.
Hyper-Growth Model:
Now, let us again suppose that the practice has attracted nine more similar medical contracts. If we multiple the above example tenfold, the serious nature of potential cash flow problem becomes apparent. In other words, the practice has increased revenues to one million dollars, with the same 35% margin, 65% COMSP and $100,000 increase in operating overhead expenses. Using identical mathematical calculations, we determine that $750,000 / 365days equals $2,055.00 per day of needed new free cash flows! Hence, indiscriminate growth without careful contract evaluation and cash flow analysis is a prescription for potential financial disaster.
Posted on February 10, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Walgreens tapped Mary Langowski, a former CVS Health executive, to lead its U.S. healthcare segment. The move comes as the retail pharmacy giant looks to boost profitability in its healthcare business.
CVS Health cut its outlook for 2024 on the back of higher medical costs in the fourth quarter. The drugstore chain, which owns Aetna, joins other healthcare companies to see a spike in utilization.
Posted on February 9, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stat: $1.43 billion. That’s Uber’s first full-year profit since 2018. And, it’s the first time the rides hare giant has shown a profit from its operations. The company has had $30 billion in operating losses since 2016. (the Wall Street Journal)
Stocks ticked up, putting the S&P 500over the 5,000-point milestone for the first time, as more strong company earnings poured in. And, Arm soared 48% after it surprised investors with record computer chip sales.
Here’s where the major benchmarks ended:
The S&P 500 index added 2.85 points (0.1%) to 4,997.91, after briefly rising to 5,000.40, breaching the 5,000 level for the first time; the Dow Jones Industrial Average gained 48.97 points (0.1%) to 38,726.33; the NASDAQ Composite climbed 37.07 points (0.2%) to 15,793.71.
The 10-year Treasury note yield (TNX) rose more than 5 basis points to 4.154%.
The CBOE Volatility Index® (VIX) fell 0.04 to 12.79.
Semiconductor shares were among the strongest performers Thursday behind Arm Holdings (ARM), which soared 48% after the chip maker reported a better-than-expected quarter profit. The Philadelphia Semiconductor Index (SOX) gained 1.6%. Energy shares were also firm as WTI crude oil (/CL) futures surged 3.6% to a high for the month above $76 per barrel, reflecting growing concern the Middle East conflict may disrupt supplies.
Posted on February 8, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Billionaire Michael Bloomberg is taking a swing at the healthcare staffing shortage. His philanthropy arm recently dedicated $250 million to create high schools that move grads straight into healthcare jobs. The schools plan to partner directly with big-name health systems, including Mass General Brigham and Northwell Health.
Stocks climbed as investors got good news from companies reporting their quarterly earnings, including Chipotle and Ford. NY Community Bancorp continued its wild ride since reporting surprise Q4 losses, finishing on an upward swing yesterday after reassuring investors about its liquidity and deposits—though it’s still down 31% from the beginning of the month.
Here’s where the major benchmarks ended:
The S&P 500 index rose 40.83 points (0.8%) to 4,995.06; the Dow Jones Industrial Average gained 156.00 points (0.4%) to 38,677.36; the NASDAQ Composite® (COMP) added 147.65 points (1.0%) to 15,756.64.
The 10-year Treasury note yield (TNX) rose slightly more than 2 basis points to 4.117%.
The CBOE Volatility Index® (VIX) fell 0.23 to 12.83.
Transportation shares were among the strongest performers behind gains in trucking companies like XPO, Inc. (XPO), which rallied 18% after reporting stronger-than-expected earnings before Wednesday’s open. The Dow Jones Transportation Average (DJT) rose 0.4% and hit its highest level since mid-August. Consumer discretionary and semiconductor shares also ranked among the strongest sectors.
Posted on February 7, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Stocks rose yesterday as investors mulled earnings reports that beat expectations from companies like Palantir and Spotify. But not every company had good news to share: Snap plunged after hours when it reported less revenue than expected and said the Middle East conflict was a headwind to growth. Meanwhile, New York Community Bancorp fell to its lowest since 1997, and Moody’s downgraded it to junk.
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Here’s where the major benchmarks ended:
The S&P 500® index (SPX) rose 11.42 points (0.2%) to 4,954.23; the Dow Jones Industrial Average® (DJI) gained 141.24 points (0.4%) to 38,521.36; the NASDAQ Composite® (COMP)added 11.32 points (0.1%) to 15,609.00.
The 10-year Treasury note yield (TNX) fell about 7 basis points to 4.089%.
The CBOE Volatility Index® (VIX) dropped 0.60 to 13.07.
Transportation shares were among the strongest performers Tuesday behind strength in United Parcel Service (UPS), which jumped 4.8% following an analyst upgrade. The Dow Jones Transportation Average (DJT) rose 2.1% to end at its highest level since late December. Energy shares also firmed as WTI Crude Oil (/CL) futures gained 1%.
Posted on February 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Operating margins at not-for-profit hospitals are expected to “gradually improve” in 2024 but will still lag far behind pre-pandemic levels, according to a January report from credit rating agency Fitch Ratings.
Median operating margins for not-for-profit hospitals dipped to record lows during the pandemic, falling to 0.2% in 2022, according to the agency, which has yet to report numbers for 2023. In 2019, the median not-for-profit hospital operating margin was 2.4%, according to Moody’s.
Despite signs that margins are improving, they’re still “nowhere near” where they were pre-2020, and a “larger expense base will keep huge gains unlikely,” according to Fitch.
“2024 will not be markedly better and certainly not the V-shaped recovery we’re hoping for,” Kevin Holloran, senior director and sector head at Fitch, said in a statement.
Posted on February 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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As the federal government seeks to rein in drug prices, pharmaceutical companies this year have been raising prices on hundreds of name-brand drugs. A new analysis by the drug research firm 46brooklyn Research found that companies increased prices on 910 branded drugs in January, although the median increase was 4.7% – the lowest drug inflation rate in more than a decade, the analysis shows.
Whether you’re into (McDonald’s), (Disney), (Ford), (Chipotle), or paying extra for medicine (Eli Lilly), there’s an earnings report for you this week. A strong earnings season so far has helped push the major stock indexes to four straight weekly gains.
And, while Meta’s historic stock-pop hosted the headlines last week, Nvidia has quietly put together a phenomenal start to 2024. The chip-making giant added nearly $300 billion in market value in January, its biggest monthly gain ever. That’s one reason the S&P 500 is kicking off the week at a record high.
The Marcinko & Associates case study and white-paper compendium is a teaching vehicle that presents potential clients with a critical management issue that serves as a spring board to lively debate in which participants present and defend their analysis and prescriptions. The average case is 2 to 100 pages long (prose, tables, graphs, charts, spread sheets and figures, etc).
Our two main types of cases are actual “field cases” based on onsite research, and “library cases”, written from public reference sources. We also write “Marcinko & Associates “armchair cases” based entirely on our general knowledge and subject matter experience.
Unfortunately and regardless of specialty, most doctors quickly realize there are few case model guidelines available to steer them through the day-to-day management maze. One solution is to discuss best-of-breed practices with leading practitioners in order to discern what successful doctors are doing [coaching concept].
Posted on February 3, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Anew set of rules from the Biden administration seeks to rein in private health insurance companies’ use of prior authorization – a byzantine practice that requires people to seek insurance company permission before obtaining medication or having a procedure. The cost-containment strategy often delays care and forces patients, or their doctors, to navigate opaque and labyrinthine appeals.
The S&P 500 index rose 52.42 points (1.1%) to 4,958.61, up 1.4% for the week; the Dow Jones Industrial Average gained 134.58 points (0.4%) to 38,654.42, up 1.4% for the week; the NASDAQ Composite rallied 267.31 points (1.7%) to 15,628.95, up 1.1% for the week.
The 10-year Treasury note yield (TNX) surged about 16 basis points to 4.024%.
The CBOE Volatility Index® (VIX) fell 0.04 to 13.84.
The market’s strength continued to be driven by the biggest companies, while smaller names lagged. The small-cap Russell 2000® Index (RUT) fell 0.6% Friday and posted a drop of 0.8% for the week. In other markets, the U.S. dollar index (DXY) rose 0.8%, reaching its strongest level in nearly two months, amid expectations interest rates will remain elevated, which boosted demand for dollar-denominated assets, such as Treasuries.
Posted on February 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
LEAP YEAR: This February month is a Leap Year. It’s stuffed with 29 days for 2024. If we didn’t have leap years, then our seasons would completely flip every ~750 years!
GROUND HOG DAY: A tradition observed in the United States and Canada on February 2nd of every year. It derives from the Pennsylvania Dutchsuperstition that if a ground hog emerges from its burrow on this day and sees its shadow, it will retreat to its den and winter will go on for six more weeks; if it does not see its shadow, spring will arrive early.
The S&P 500® index (SPX) rose 60.54 points (1.3%) to 4,906.19; the Dow Jones Industrial Average (DJI) gained 369.54 points (1.0%) to 38,519.84; the NASDAQ Composite® (COMP) added 197.63 points (1.3%) to 15,361.64.
The 10-year Treasury note fell over 10 basis points to 3.86%.
The CBOE Volatility Index® (VIX) fell 0.47 to 13.88.
Regional bank shares remained under pressure in the wake of poorly received quarterly results earlier this week from New York Community Bancorp (NYCB), which took over the failed Signature Bank in 2023. The bank’s shares fell another 11% on top of a 38% drop Wednesday while the KBW Regional Banking Index (KRX) sank 2.3% to a two-month low. The bank weakness was offset by strength in several other sectors, including retail and consumer discretionary.
Posted on February 1, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
HCSC will acquire Cigna’s Medicare Advantage, Part D, supplemental benefits and CareAllies businesses, and the parties expect the deal to close in the first quarter of 2025. And, as January exits, we enter the thick of earnings call season. This week executives at AbbVie, Cigna, and Merck—to name a few—will brief healthcare investors on how their companies fared in 2023, and provide insights on what to expect in 2024.
And, Anne Wojcicki’s billions have vanished. 23andMe’s valuation has crashed 98% from its peak and NASDAQ has threatened to delist its sub-$1 stock. Wojcicki reduced staff by a quarter last year through three rounds of layoffs and a subsidiary sale. The company has never made a profit and is burning cash so quickly it could run out by 2025.
Posted on February 1, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Microsoft and Google rode the AI wave to huge quarters. Microsoft posted revenues of ~$62 billion in its fiscal Q2 ending Dec. 31, a year over year increase of 17.6% and ahead of analyst’s expectations. That was its best revenue growth in seven quarters, thanks to the release of new AI-enabled Office products. Meanwhile, Google reported strong results, too: Ad revenue at YouTube skyrocketed to $9.2 billion in Q4 of last year, up from below $8 billion the year before. Alphabet CEO Sundar Pichai said YouTube is “already benefiting from our AI investments and innovation.” Alphabet’s total revenue was up 13% year over year to ~$86 billion.
UPS slashed 12k jobs. The shipping giant said it will require employees to return to the office five days a week this year as it changes how it operates amid a slowdown in demand. Revenue declined in Q4, while annual sales fell 9.3% in 2023. Amazon, its biggest customer, accounted for 11.8% of revenue last year, up from the year before, as revenue from other customers declined due to lower demand and more in-store pickups, executives said. UPS is also dealing with higher labor costs due to the deal it made with the Teamsters union to avoid a strike last summer.
The IMF has the US to thank for raising its global forecast. The International Monetary Fund—the UN’s flagship financial agency—said the global economy will grow 3.1% this year, a slight increase from its projection in October. That’s largely due to the strength of the US economy, which has defied economists’ expectations, growing 3.3% in the fourth quarter of 2023. But the improved outlook was also boosted by economic stimulus in China, which has faced deflation and a real estate crisis, among other issues. Other economies, including India, Brazil, and Russia, also performed better than expected, helping to juice the IMF’s forecast.
The S&P 500® index (SPX) fell 79.32 points (1.6%) to 4,845.65; the Dow Jones Industrial Average® (DJI) lost 317.01 points (0.8%) to 38,150.30; the NASDAQ Composite® (COMP) dropped 345.89 points (2.2%) to 15,164.01, a two-week low.
The 10-year Treasury note yield (TNX) decreased nearly 9 basis points to 3.969%.
The CBOE Volatility Index® (VIX) jumped 1.03 to 14.34.
Regional banks led Wednesday’s declines after New York Community Bancorp (NYCB), which took over the failed Signature Bank last year, reported a fourth-quarter loss of $193 million, sending its shares down nearly 38%. The KBW Regional Banking Index (KRX) sank 6%. Communications services shares were also among the weakest performers. Energy companies were also under pressure as WTI Crude Oil futures (/CL) shed nearly 3%.
Posted on January 31, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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China Evergrande, which owes $300 billion, ordered to liquidate. Yesterday,a Hong Kong court ordered the debt-burdened real estate firm to wind up its business—though it’s not clear if mainland Chinese authorities will enforce it. As one of the largest developers to struggle with debt, the company, which defaulted in 2021, has become a symbol of the real estate bust in China, which has so many homes sitting vacant that an ex-official admitted even its population of 1.4 billion could not fill them. Now, investors around the world will be watching the liquidation process to see how foreign investors fare as a test of how China’s system treats international businesses.
FanDuel parent Flutter lists on New York Stock Exchange. Rob Gronkowski visited the NYSE trading floor yesterday to celebrate the kickoff of the company selling shares in New York, which—for now—is a secondary listing to the European company’s primary London Stock Exchange listing. The move steps up its competition with DraftKings. And with US sports betting booming thanks to legal changes, the FanDuel parent wants to go all in and is proposing making the NYSE its primary trading venue, which would be a blow to the London exchange.
The S&P 500® index (SPX) fell 2.96 points (0.1%) to 4,924.97; the Dow Jones Industrial Average gained 133.86 points (0.4%) to 38,467.31; the NASDAQ Composite® (COMP) lost 118.15 points (0.8%) to 15,509.90.
The 10-year Treasury note yield (TNX) tumbled about 3 basis points to 4.059%.
The CBOE Volatility Index® (VIX) dropped 0.29 to 13.31.
Chipmaker shares were among the market’s weakest performers, with the Philadelphia Semiconductor Index (SOX) sinking 1.6%. The small-cap Russell 2000® Index (RUT) lost 0.8%, giving back part of Monday’s 1.7% gain. Energy and financial companies were among the strongest sectors.
Posted on January 30, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Markets: Stocks had a strong start to the week, with the S&P 500 and the Dow once again hitting new records. That’s mostly thanks to a boom in Big Tech as investors anticipate a slew of high-profile earnings (not to mention a Fed meeting) this week. Microsoft, Meta, and Uber all reached all-time highs.
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Here’s where the major benchmarks ended today:
The S&P 500 index rose 36.96 points (0.8%) to 4,927.93; the Dow Jones Industrial Average gained 224.02 points (0.6%) to 38,333.45; the NASDAQ Composite® (COMP) added 172.68 points (1.1%) to 15,628.04.
The 10-year Treasury note yield (TNX) dropped about 8 basis points to 4.08%.
The CBOE Volatility Index® (VIX) rose 0.37 to 13.63.
Consumer discretionary and banks were among the market’s strongest sectors Monday, and small caps were also strong. The Russell 2000® Index (RUT), a small-cap benchmark, outpaced its large-cap counterparts with a gain of 1.7%, ending near a four-week high. Energy shares took pressure after WTICrude Oil futures (/CL) reversed an initial rally to a two-month high and ended with a loss of more than 1%.
Posted on January 28, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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The US GDP grew 3.3% in Q4, per the Commerce Department, annihilating Wall Street’s expectations of 2% growth. For the year, the US economy expanded 2.5% in 2023, up from 1.9% in 2022. That also outpaced Wall Street’s estimates from the beginning of the year. The growth was driven by strong consumer spending made possible by rising wages and a sturdy job market, even as the country dealt with inflation. That, too, improved in Q4: Prices increased 2.7% on an annual basis, down from a 5.9% increase the year prior. The GDP smash adds more fuel to the expectation that the Fed will cut interest rates this year.
The cuts across Xbox and Activision Blizzard account for 8% of Microsoft’s video game division. The tech giant closed on its $69 billion acquisition of Call of Duty-maker Activision Blizzard in October and has since made several leadership changes. CEO Bobby Kotick stepped down in December, and now Blizzard President Mike Ybarra has decided to leave, according to an internal memo obtained by The Verge. An upcoming survival game has also been canceled. The cuts come as several gaming-related companies, including Twitch, Discord, Unity, and Riot Games, have conducted layoffs.
Posted on January 27, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here’s where the major benchmarks ended:
The S&P 500® index (SPX) fell 3.19 points (0.1%) to 4,890.97, up 1.1% for the week; the Dow Jones Industrial Average gained 60.30 points (0.2%) to 38,109.43, up 0.6% for the week; the NASDAQ Composite® (COMP) dropped 55.13 points (0.4%) to 15,455.36, still up 0.9% for the week.
The 10-year Treasury note yield (TNX) rose about 1 basis point to 4.143%.
The CBOE Volatility Index® (VIX) fell 0.19 to 13.26.
Energy shares extended a strong week as WTI Crude Oil futures (/CL) rallied further, reaching a two-month high just under $78 per barrel. Regional banks were also among the market’s strongest performers Friday. Small-cap stocks gained modestly to end a firm week with the Russell 2000® Index (RUT) posting a weekly gain of about 1.8%.
Posted on January 27, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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American Medical Association (AMA) leaders lauded the Medicare Payment Advisory Commission (MedPAC) this month for backing increased physician payment rates for 2025.
AMA President Jesse Ehrenfeld praised MedPAC, a nonpartisan independent legislative agency that advises Congress on the Medicare program, for endorsing a draft recommendation that urges lawmakers to increase physician payment rates to reflect inflation. He cast the move as “a critical first step toward the necessary work of reforming the broken Medicare payment system.”
“Long-term reforms from Congress are overdue to close the unsustainable gap between what Medicare pays physicians and the actual costs of delivering high-quality care. When adjusted for inflation in practice costs, Medicare physician pay declined 26% from 2001 to 2023,” he said in a statement.
Posted on January 26, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Here’s where the major benchmarks ended:
The S&P 500 index rose 25.61 points (0.5%) to 4,894.16, a record high close; the Dow Jones Industrial Average® (DJI) gained 242.74 points (0.6%) to 38,049.13, also a record high; the NASDAQ Composite rose 28.58 points (0.2%) to 15,510.50.
The 10-year Treasury note yield (TNX) fell about 5 basis points to 4.13%.
The CBOE Volatility Index® (VIX) rose 0.31 to 13.45.
Energy companies were among the market’s strongest performers Thursday, boosted by a rally in WTI crude oil (/CL) futures, which surged 2.8% and ended near a two-month high above $77 per barrel amid concerns conflict in the Middle East and the Russia-Ukraine war may disrupt global oil supplies.
Posted on January 25, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Alarmed by a surge in fraud draining bank accounts through popular mobile payment apps like Venmo,Cash App and Zelle, Manhattan District Attorney Alvin Bragg, Jr., has sent scathing letters to the CEOs of each company, demanding immediate action to protect consumers.
In the letters, Bragg described the crimes as involving an unauthorized user gaining access to unlocked devices, then stealing significant sums of money from bank accounts by making purchases with the mobile payment apps and using financial information from them to open new accounts.
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And, the U.S. economy expanded at a 3.3% annualized pace in the final quarter of 2023, the Commerce Department said on Thursday.
Why it matters: It’s much stronger growth than economists expected and caps a year of economic resilience as the nation avoided a projected recession.
Here’s where the major benchmarks ended:
The S&P 500 index rose3.95 points (0.1%) to 4,868.55; the Dow Jones Industrial Average® (DJI) lost 99.06 points (0.3%) to 37,806.39; the NASDAQ Composite gained 55.97 points (0.4%) to 15,481.92.
The 10-year Treasury note yield (TNX) increased about 4 basis points to 4.18%.
The CBOE Volatility Index® (VIX) rose 0.59 to 13.14.
Tech-related strength helped boost the NASDAQ-100® (NXD), which includes the NASDAQ’s largest non-financial companies, by 0.6% to a record close. Energy shares were also strong behind continued gains in WTI Crude Oil (/CL) futures, which rose 1.4% and settled near a two-month -high after the Energy Information Administration reported a 7.5% drop in U.S. oil production last week, reflecting disruptions from winter storms. Small-cap shares lagged as the Russell 2000® Index (RUT) fell 0.7%.
Posted on January 24, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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New York City intends to wipe out more than $2 billion in medical debt for up to 500,000 residents, tackling a top cause of personal bankruptcy, Mayor Eric Adams just announced yesterday.
The city is working with RIP Medical Debt, a nonprofit that buys medical debt in bulk from hospitals and debt collectors for pennies on the dollar. The group targets the debt of people with low incomes or financial hardships and then forgives the amounts.
The S&P 500 index rose 14.17 points (0.3%) to 4,864.60; the Dow Jones Industrial Average lost 96.36 points (0.3%) to 37,905.45; the NASDAQ Composite® (COMP) rose 65.66 points (0.4%) to 15,425.94.
The 10-year Treasury note yield (TNX) gained about 4 basis points to 4.138%.
The CBOE Volatility Index® (VIX) fell 0.64 to 12.55.
Shares of banks and retailers were among the market’s weakest areas Tuesday, while consumer staples were among the upside leaders. Oilfield services companies were also strong, as strong quarterly results from Halliburton (HAL) helped offset a slide in crude oil futures. In other markets, the U.S. dollar index (DXY) hit its strongest level since mid-December, partly reflecting the Bank of Japan’s decision to keep short-term interest rates unchanged.
I’m a late career entry and 55 year old burned out doctor who wants out. Can I retire in 2 years with a pension of $6,100 a month (net). I have $825,000 in my 401(k) and 457 plan and a mortgage of $95,000 at 5.30%. I am not planning to move and will retire in place.
SOME THOUGHTS AND ANSWERS?
Congratulations on you solid retirement fund on top of a pending pension.
The first step you should take is to create a detailed budget for your retirement years. Consider expected living costs, healthcare expenses, travel and any other major expenses. Many folks make the mistake of setting up a monthly budget, but keep out significant milestones that are often costly, such as paying for a child’s college education or wedding.
Next, you should figure out your plan for housing. Mortgage payments, upkeep and taxes are important considerations. There was no mention of mortgage equity.
Another factor to take into account is state and Federal tax projections. If the 401(k) funds are all pre-tax dollars, any distributions will be taxable and there may be penalties if funds are withdrawn prior to 59 ½ years old. That will impact your retirement plan if you’re preparing to retire at 57-58.
It also sounds like you haven’t taken into account your Social Security allowance. It’s possible that your pension is one that comes with a government pension offset which would explain why you didn’t include it. On the other hand, maybe you’re thinking it’s far out enough that it doesn’t factor into your calculations?
Finally, you may want to look for a fee-only financial advisor that is paid directly by the client and doesn’t receive commissions for recommending financial products. So, advice is less biased. And get a fiduciary advisor which means they are required to put your best interests ahead of their own.
Also, someone with medical niche specificity. Good Luck!
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NOTE: This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.
Posted on January 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Statistic 187,000: That’s how many first time unemployment claims were filed last week, a surprise decline and the lowest since September 2022. The resilient labor market is continuing to chug along as companies continue to hold on to the workers they have.
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Managed-care companies are reporting that seniors on Medicare Advantage Part C plans used far more medical services than expected in the final months of 2023. The announcements have sparked two separate selloffs over the past week: The first came January 12th, when UnitedHealth Group announced its fourth-quarter earnings. The second came Thursday, after Humana laid out preliminary fourth-quarter results, and said the high utilization trends would have a material impact on its 2024 performance “if current trends continue.”
In response, three largest sponsors of Medicare Advantage plans, UnitedHealth Group, CVS Health, and Humana, have seen their shares fall 3.2%, 7.5%, and 14.3% so far this year, respectively, as of midday Thursday. The S&P 500 is down 0.6% over the same period, while Cigna Group—which is reportedly near a deal to sell its relatively small Medicare Advantage business—is up 1%.
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Here’s where the major benchmarks ended:
The S&P 500 index rose 41.73 points (0.9%) to 4,780.94; the Dow Jones Industrial Average® (DJI) gained 201.94 points (0.5%) to 37,468.61; the NASDAQ Composite increased 200.03 points (1.4%) to 15,055.65.
The 10-year Treasury note yield (TNX) rose nearly 4 basis points to 4.142%.
The CBOE Volatility Index® (VIX) fell 0.66 to 14.13.
Gains in Taiwan Semiconductor and its industry counterparts sent the Philadelphia Semiconductor Index (SOX) up 3.4% to a three-week high. In a further illustration of tech sector strength, the Nasdaq-100® (NXD), which includes the NASDAQ’s largest non-financial companies, rose 1.5% to a record closing high. Banking and utility shares were among the market’s weakest performers.
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