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Posted on April 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
Why would a doctor consider a Roth IRA conversion?
By Staff Reporters
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A Roth conversion involves transferring funds from a traditional retirement account—such as a 401(k), 403(b), or individual retirement account (IRA) funded with pre-tax dollars—into a Roth IRA.
The biggest benefit lies in the tax treatment of the converted funds. Once the funds are in the Roth IRA, future growth of those assets is tax-free. Withdrawals in retirement are also tax-free, assuming they meet certain criteria. As with any strategy, there are important considerations to keep in mind.
When you convert funds to a Roth IRA, the amount converted is taxable income in that tax year. For example, if you convert $100,000 from a traditional IRA to a Roth IRA, that $100,000 will be added to your taxable income in the conversion year.
Converting large amounts can result in a significant tax bill and may push you into a higher tax bracket. Even so, using retirement funds to pay taxes may make sense for those looking to convert large IRAs to reduce their future required minimum distributions (RMDs).
The timing of your Roth conversion matters too. Generally, it’s a good idea to convert when your income is lower—for example, after you’ve retired and before you begin drawing Social Security. You may also choose to convert over the course of several years to spread out the tax impacts. But if you can get comfortable with these considerations, a Roth conversion can provide you with benefits beyond tax-free growth and withdrawals.
Some of these benefits are:
Tax diversification. Having both traditional and Roth accounts allows you to manage your tax liability in retirement. For example, if your income in a given year is higher than expected, you can withdraw from the Roth IRA without increasing your taxable income.
No RMDs. Traditional IRAs and 401(k)s require you to begin taking RMDs at age 73. Roth IRAs have no RMD requirement during your lifetime. With a Roth account, you have more control over your retirement withdrawals and can leave the funds to grow for your heirs.
Benefits for heirs. Roth IRAs can be passed on to beneficiaries, who can inherit the account income tax-free. This means your heirs can enjoy the tax-free growth and withdrawals if the Roth IRA has been held for five years or more—a significant advantage, especially if your beneficiaries are in a higher tax bracket.
Financial Modeling is one of the most highly valued, but thinly understood, skills in financial analysis. The objective of financial modeling is to combine accounting, finance, and business metrics to create a forecast of a company’s future results.
According to Jeff Schmidt, a financial model is simply a spreadsheet, usually built in Microsoft Excel, that forecasts a business’s financial performance into the future. The forecast is typically based on the company’s historical performance and assumptions about the future and requires preparing an income statement, balance sheet, cash flow statement, and supporting schedules (known as a three-statement model, one of many types of approaches to financial statement modeling). From there, more advanced types of models can be built such as discounted cash flow analysis (DCF model), leveraged buyout (LBO), mergers and acquisitions (M&A), and sensitivity analysis
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DEFINED TERMS
Discounted Cash Flow (DCF): A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money. It’s like deciding whether a treasure chest is worth diving for now, based on the gold coins you’ll be able to cash in later.
Sensitivity Analysis: This involves changing one variable at a time to see how it affects an outcome. Imagine tweaking your coffee-to-water ratio each morning to achieve the perfect brew strength.
Budget – A budget is the amount of money a department, function, or business can spend in a given period of time. Usually, but not always, finance does this annually for the upcoming year.
Rolling Forecast – A rolling forecast maintains a consistent view over a period of time (often 12 months). When one period closes, finance adds one more period to the forecast.
Topside – A topside adjustment is an overlay to a forecast. This is typically completed by the corporate or headquarter team. As individual teams submit a forecast, the consolidated result might not make sense or align with expectations. When this occurs, the high-level teams use a topside adjustment to streamline or adjust the consolidated view.
Monte Carlo Simulation: Picture yourself at the casino, but instead of gambling your savings away, you’re using this technique to predict different outcomes of your business decisions based on random variables. It’s like playing financial roulette with the odds in your favor.
What-If Analysis: Ever daydream about what would happen if you took that leap of faith with your business? This tool allows you to explore various scenarios without risking a dime. It’s like trying on outfits in a virtual dressing room before making a purchase.
Leveraged Buyout (LBO) Model: This is a bit like orchestrating a heist, but legally. It’s about acquiring a company using borrowed money, with plans to pay off the debts with the company’s own cash flows. High stakes, high rewards.
Mergers and Acquisitions (M&A) Model: Picture two puzzle pieces coming together. This model evaluates how combining companies can create a new, more valuable entity. It’s the corporate version of a matchmaker.
Three Statement Model: The holy trinity of financial modeling, linking the income statement, balance sheet, and cash flow statement. It’s like weaving a tapestry where each thread is crucial to the overall picture.
Capital Asset Pricing Model (CAPM): A formula that calculates the expected return on an investment, considering its risk compared to the market. It’s like choosing the best roller coaster in the park, balancing thrill and safety.
Cash Flow Forecasting: This is your financial weather forecast, predicting the cash flow climate of your business. It helps you plan for sunny days and save for the rainy ones.
Cost of Capital: The price of financing your business, whether through debt or equity. It’s like the interest rate on your growth engine, pushing you to maximize every dollar invested.
Debt Schedule: A timeline of your business’s debts, showing when and how much you owe. It’s your roadmap to becoming debt-free, one milestone at a time.
Equity Valuation: Determining the value of a company’s shares. It’s like assessing the worth of a rare gemstone, ensuring investors pay a fair price for a piece of the treasure.
Financial Leverage: Using debt to amplify returns on investment. It’s like using a lever to lift a heavy object, increasing force but also risk.
Forecast Model: A crystal ball for your finances, projecting future performance based on past and present data. It’s your guide through the financial wilderness, helping you navigate with confidence.
Operating Model: A detailed blueprint of how a business generates value, mapping out operational activities and their financial impact. It’s like laying out the inner workings of a clock, ensuring every gear turns smoothly.
Revenue Growth Model: This tracks potential increases in sales over time, charting a course for expansion. It’s like plotting your ascent up a mountain, anticipating the effort required to reach the summit.
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
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The Hedge Fund manager I am considering is a Registered Investment Adviser [RIA]
QUESTION: What is a Registered Investment Advisor?
If the fund manager is an entity, then any individual you deal with will be a registered investment adviser representative. If the fund manager is an individual, then that individual is a registered investment adviser. In either case, the designation implies several steps have been taken.
In order to become a registered investment adviser, an individual must register for and pass the Series 65 Uniform Investment Adviser Law Exam, a three-hour, 130-question computer-based exam administered by the North American Securities Administrators Association. Topics covered include economics and analysis, investment vehicles, investment recommendations and strategies, and ethics and legal guidelines. A passing score is 70 percent or higher.
Once an individual has passed the Series 65, he or she must then apply via Form ADV to become a registered investment adviser. This application is made to either a state authority or to the SEC, depending on the adviser’s assets under management. If assets under management exceed $30 million, then the adviser must register with the SEC.
Form ADV consists of two parts. Part I provides general information to the regulatory authority. Part II is designed to be distributed to potential clients, and includes disclosure of a decent amount of information about the adviser. If the manager is a registered investment adviser, then you should expect to receive as part of the offering documentation either a current copy of Part II of the adviser’s Form ADV or a brochure that contains all the current information in Part II of Form ADV.
In addition to filing Form ADV and paying a small fee, the registered investment adviser becomes subject to extra administrative/regulatory burden as well as capital adequacy requirements that state the Adviser must maintain certain net worth levels.
By and large, because of the extra administrative burden as well as restrictions on certain activities, hedge fund managers attempt to avoid registering as investment advisers. Whether such managers can or cannot avoid such registration is largely dependent upon the state in which the manager operates. In California, for instance, hedge fund managers must register as investment advisers. In New York, such registration is not necessary. Not surprisingly, hedge fund managers located in California are rare, while they are quite plentiful in New York.
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
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My stock broker is telling me about a “wrap-fee” program involving a hedge fund manager.
QUESTION: What is a Wrap Fee?
A wrap fee program is a service that provides investment advice and portfolio management to clients for one all-inclusive fee. The fee pays for the services provided to the client, including but not limited to securities transactions, portfolio management, research, brokerage, and administrative services. Wrap fee programs also provide an understanding of a client’s financial goals and objectives; research and selection of assets; implementation of investment decisions; account statements, and access to real-time financial data.
The Investment Advisers Act of 1940 regulates investment advisors when they offer these wrap fee programs and requires them to provide comprehensive disclosure documents before investing. This act helps ensure clients have access to all important information that affects their investment decisions.
QUESTION: Why do I need my stock broker? Can I just go directly to the hedge fund manager?
Yes, you can, but you may find a different fee arrangement when you reach the hedge fund manager, and you may be participating in an unethical transaction. When hedge fund managers set up separate accounts for wrap-fee clients, they agree to take a set fee in exchange for managing this money. They also enter into agreements with one or more brokers to help market this aspect of their money management business. A portion of the wrap fee you pay goes to the broker, and a portion goes to the manager. Incentive compensation is not generally used.
When approached directly, hedge fund managers will typically offer only the hedge fund, complete with incentive compensation and pooled investment features. However, if the hedge fund manager is willing to set up a separate account, it is possible that the investor will find the set fee much less than what he or she would have paid in a wrap fee account through a broker.
Finally, the very large caveat to all this is that the ethics of a hedge fund manager who steals clients from brokers with whom he has a marketing relationship ought to be called into question. And when it comes to hedge funds, the ethics of the manager are of paramount importance.
Posted on April 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BREAKING NEWS – MARKET VOLATILITY
By Staff Reporters
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US stocks nosedived on Thursday, with the Dow tumbling more than 1,200 points as President Trump’s surprisingly steep “Liberation Day” tariffs sent shock waves through markets worldwide. The tech-heavy NASDAQ Composite (IXIC) led the sell-off, plummeting over 4%. The S&P 500 (GSPC) dove 3.7%, while the Dow Jones Industrial Average (^DJI) tumbled roughly 3%. [ongoing story].
So, does the traditional 60 stock / 40 bond strategy still work or do we need another portfolio model?
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The 60/40 strategy evolved out of American economist Harry Markowitz’s groundbreaking 1950s work on modern portfolio theory, which holds that investors should diversify their holdings with a mix of high-risk, high-return assets and low-risk, low-return assets based on their individual circumstances.
While a portfolio with a mix of 40% bonds and 60% equities may bring lower returns than all-stock holdings, the diversification generally brings lower variance in the returns—meaning more reliability—as long as there isn’t a strong correlation between stock and bond returns (ideally the correlation is negative, with bond returns rising while stock returns fall).
For 60/40 to work, bonds must be less volatile than stocks and economic growth and inflation have to move up and down in tandem. Typically, the same economic growth that powers rallies in equities also pushes up inflation—and bond returns down. Conversely, in a recession stocks drop and inflation is low, pushing up bond prices.
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But, the traditional 60/40 portfolio may “no longer fully represent true diversification,” BlackRock CEO Larry Fink writes in a new letter to investors.
Instead, the “future standard portfolio” may move toward 50/30/20 with stocks, bonds and private assets like real estate, infrastructure and private credit, Fink writes.
Here’s what experts say individual investors may want to consider before dabbling in private investments.
It may be time to rethink the traditional 60/40 investment portfolio, according to BlackRock CEO Larry Fink. In a new letter to investors, Fink writes the traditional allocation comprised of 60% stocks and 40% bonds that dates back to the 1950s “may no longer fully represent true diversification.“
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
Posted on April 2, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Ann Miller RN MHA CPHQ CMP™
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Finally … Fiduciary second investing and financial planning opinions right here!
Telephonic or electronic advice for medical professionals that is:
Objective, affordable, medically focused and financially personalized
Rendered by a pre-screened financial consultant for doctors and medical professionals
Offered on a pay-as-you-go basis, by phone or secure e-mail transmission
The iMBA Discussion Forum™ is a physician-to-financial advisor telephone or e-mail portal that connects independent financial professionals to doctors, nurses or healthcare executives desiring affordable and unbiased financial planning advice.
Medical professionals and healthcare executives can now receive direct access to pre-screened iMBA professionals in the areas of Investing, Financial Planning, Asset Allocation, Portfolio Management, Insurance, Mortgage and Lending, Human Resources, Retirement Planning and Employee Benefits. To assist our medical professional and healthcare executive members, we can be contracted with per-minute or per-project fees, and contacted by client phone, email or secure instant messaging.
A hedge fund is a limited partnership of private investors whose money is pooled and managed by professional fund managers. These managers use a wide range of strategies, including leverage (borrowed money) and the trading of nontraditional assets, to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice and usually requires a high minimum investment or net worth. Hedge funds typically target wealthy investors.
QUESTION:Can I invest my Individual Retirement Account [IRA] in a Hedge Fund?
This is up to the manager, but there is no legal restriction on a hedge fund accepting individual retirement account (IRA) assets. IRA accounts are not well suited for funds that make extensive use of leverage, however. In such cases, the fund is likely to generate significant amounts of unrelated business taxable income (UBTI) – profits of the fund attributable to the use of leverage. The holder of an IRA account must pay taxes on UBTI, even if the UBTI was generated in an IRA account.
But, today’s hedge funds may or may not use leverage. Many hedge funds are not hedged at all, but rather are just specialized versions of regular long stock portfolios. If such funds do not use much leverage, IRA investors will not encounter much difficulty with UBTI and should not hesitate in considering these funds.
In considering whether to accept IRA money, hedge fund managers must consider several factors. If the only type of retirement money accepted by the hedge funds is IRA money, then the manager has no limit on how much retirement money the fund can accept. If, however, there are other types of retirement money invested in the fund, such as pension funds, IRA money will be counted towards a total of 25 percent of fund assets that can be invested in retirement accounts before the fund becomes subject to the Employment Retirement Income Security Act of 1974 (ERISA). Funds subject to ERISA regulations face a heavy administrative burden and more restrictions than most fund managers like.
Finally, IRA distributions from a hedge fund are subject to the standard 20 percent withholding unless the funds are directly rolled over to other qualified plans.
*** Several years ago we noted that far too many mid-career, mature and physician clients using traditional stock brokers, management consultants and “financial advisors”, seemed to be less successful than those who went it alone. These Do-it-Yourselfers [DIYs] had setbacks and made mistakes, for sure. But, the ME Inc,. doctors seemed to learn from their mistakes and did not incur the high management and service fees demanded from general or retail one-size-fits-all “advisors.”
In fact, an informal inverse related relationship was noted, and dubbed the “Doctor Effect.” In other words, the more consultants an individual doctor retained; the less well they did in all disciplines of the financial planning, professional portfolio and investing continuum.
Of course, the reason for this discrepancy eluded many of them as Wall Street brokerages and wire-houses flooded the media with messages, infomercials, print, radio, TV, texts, tweets, and internet ads to the contrary. Rather than self-learn the basics, the prevailing sentiment seemed to purse the holy grail of finding the “perfect financial advisor.” This realization was a confirmation of the industry culture which seemed to be: Bread for the advisor – Crumbs for the client!
And so, we at the the Institute of Medical Business Advisors Inc. (iMBA), and this Medical Executive-Post, formed a cadre’ of technology focused and highly educated doctors, financial advisors, attorneys, accountants, psychologists and educational visionaries who decided there must be a better way for their healthcare colleagues to receive financial planning advice, products and related management services within a culture of fiduciary responsibility.
We trust you agree with this ME Inc philosophy as illustrated in this free white paper available upon request.
PROFESSIONAL PORTFOLIO CONSTRUCTION [Investing Assets and their Management] Subscribe, Read, Like and Refer
Email whiote paper request here:MarcinkoAdvisors@outlook.com
Posted on March 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Donald Trump has officially dropped a stablecoin. It’s called USD1, and it’s pegged 1:1 with the US dollar, according to a statement from his family company World Liberty Financial Inc, (WLFI) today. The company says the token is fully backed by short-term US government treasuries, USD deposits, and other cash equivalents. Every token equals one dollar, no exceptions. WLFI says it built the whole thing to give people a stablecoin they don’t have to second guess.
US stocks rose for a third day in a row despite souring consumer confidence — and as investors weighed whether President Trump would temper his plans for upcoming tariffs.
The benchmark S&P 500 (^GSPC) rose more than 0.1%, while the Dow Jones Industrial Average (^DJI) ticked just above the flatline. The tech-heavy NASDAQ Composite (^IXIC) rose nearly 0.5%, bolstered by a more than 3% jump from Tesla (TSLA).
Absolute Return – the goal is to have a positive return, regardless of market direction. An absolute return strategy is not managed relative to a market index.
Accredited Investor – wealthy individual or well-capitalized institutions covered under Regulation D of the Securities Act of 1933.
Alpha – the return to a portfolio over and above that of an appropriate benchmark portfolio (the manager’s “value added”).
Arbitrage – any strategy that invests long in an asset, and short in a related asset, hoping the prices will converge.
Attribution – the process of “attributing” returns to their sources. For example, did the returns to a portfolio (over and above some benchmark) come from stock selection, industry/sector over- or under-weighting or factor weighting. Software programs are helpful in reporting an attribution.
Beta – a measure of systematic (i.e., non-diversifiable) risk. The goal is to quantify how much systematic risk is being taken by the fund manager vis-à-vis different risk factors, so that one can estimate the alpha or value-added on a risk-adjusted basis.
Correlation – a measure of how strategy returns move with one another, in a range of –1 to +1. A correlation of –1 implies that the strategies move in opposite directions. In constructing a portfolio of hedge funds, one usually wants to combine a number of non-correlated strategies (with decent expected returns) to be well diversified.
Drawdown – the percentage loss from a fund’s highest value to its lowest, over a particular time frame. A fund’s “maximum drawdown” is often looked at as a measure of potential risk.
Hurdle Rate – the return where the manager begins to earn incentive fees. If the hurdle rate is 5% and the fund earns 15% for the year, then incentive fees are applied to the 10% difference.
Leverage – one uses leverage if he borrows money to increase his position in a security. If one uses leverage and makes good investment decisions, leverage can magnify the gain. However, it can also magnify a loss.
Opportunistic – a general term that describes an aggressive strategy with a goal of making money (as opposed to holding on to the money one already has).
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Pairs Trading – usually refers to a long/short strategy where one stock is bought long, and a similar stock is sold short, often within the same industry. Buying the stock of Home Depot and shorting Lowe’s in an equal amount would be an example.
Portfolio Simulation – involves testing an investment strategy by “simulating” it with a database and analytic software. Often referred to as “backtesting” a strategy. The simulated returns of the strategy are compared to those of a benchmark over a specific time frame to see if it can beat that benchmark.
Sharpe Ratio – a measure of risk-adjusted return, computed by dividing a fund’s return over the risk-free rate by the standard deviation of returns. The idea is to understand how much risk was undertaken to generate the alpha.
Short Rebate – if you borrow stock and then sell it short, you have cash in your account. The short rebate is the interest earned on that cash.
R-Squared – a measure of how closely a portfolio’s performance varies with the performance of a benchmark, and thus a measure of what portion of its performance can be explained by the performance of the overall market or index. Hedge fund investors want to know how much performance can be explained by market exposure versus manager skill.
Transportable Alpha – the alpha of one active strategy can be combined with another asset class. For example, an equity market-neutral strategy’s value-added can be “transported” to a fixed income asset class by simply buying a fixed income futures contract. The total return comes from both sources.
Value at Risk – a technique which uses the statistical analysis of historical market trends and volatilities to estimate the likelihood that a specific portfolio’s losses will exceed a certain amount.
SO – HOW MUCH IS A “FINANCIAL ADVISOR” REALLY WORTH?
This blog holds a rather uncomplimentary opinion of financial advisors, and the financial services and brokerage industry as a whole; deserved, or not? The entire site hints at this attitude as well, in favor of a going it alone or ME, Inc investing when possible. Nevertheless, it is reasonable to wonder how much boost in net-returns might an educated and informed, fee transparent and honest, fiduciary focused “financial advisor” add to a clients’ investment portfolio; all things being equal [ceteris paribus].
And, can it be quantified?
Well, according to Vanguard Brokerage Services®, perhaps as much as 3%? In a decade long paper from the Valley Forge, PA based mutual fund and ETF giant, Vanguard said financial advisors can generate returns through a framework focused on five wealth management principles:
• Being an effective behavioral coach: Helping clients maintain a long-term perspective and a disciplined approach is arguably one of the most important elements of financial advice. (Potential value added: up to 1.50%).
• Applying an asset location strategy: The allocation of assets between taxable and tax-advantaged accounts is one tool an advisor can employ that can add value each year. (Potential value added: from 0% to 0.75%).
• Employing cost-effective investments: This component of every advisor’s tool kit is based on simple math: Gross return less costs equals net return. (Potential value added: up to 0.45%).
• Maintaining the proper allocation through rebalancing: Over time, as investments produce various returns, a portfolio will likely drift from its target allocation. An advisor can add value by ensuring the portfolio’s risk/return characteristics stay consistent with a client’s preferences. (Potential value added: up to 0.35%).
• Implementing a spending strategy: As the retiree population grows, an advisor can help clients make important decisions about how to spend from their portfolios. (Potential value added: up to 0.70%).
Source: Financial Advisor Magazine, page 20, April 2014.
Assessment
However, Vanguard notes that while it’s possible all of these principles could add up to 3% in net returns for clients, it’s more likely to be an intermittent number than an annual one because some of the best opportunities to add value happen during extreme market lows and highs when angst or giddiness [fear and greed] can cause investors to bail on their well-thought-out investment plans.
And, is the study applicable to doctors and allied healthcare providers? Doe Vanguard have a vested interest in the topic. What about fee based versus fee-only financial advice?
Conclusion
Finally, recognize the plethora of other financial planning life-cycle topics addressed in this ME-P were not included in the Vanguard investment portfolio-only study a decade ago.
And what about today with contemporaneous internet advising, chat-rooms, linkedin, robo-advisors, reddit and the like?
Posted on March 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
BANK IDENTIFICATION NUMBER – DEFINED
By Staff Reporters
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What Is a BIN Attack?
The BIN, or the Bank Identification Number, is the first six digits on a credit card. These are always tied to its issuing institution – usually a bank. In a BIN attack, fraudsters use these six numbers to algorithmically try to generate all the other legitimate numbers, in the hopes of generating a usable card number.
How Does a BIN Attack Work?
Fraudsters conduct BIN attacks by generating hundreds of thousands of possible credit card numbers and testing them out.
A fraudster looks up the BIN of the bank they will target. Ranging from four to six digits, this information is in the public domain and is thus easy to source.
Using dedicated software such as an auto-dialer, they generate thousands, often tens of thousands, combinations of possible existing card numbers by this issuer.
At this point, these credentials need to be tested. The fraudster identifies a suitable online shop or donation page.
They start card testing by attempting a small payment with each generated card number.
They keep track of the small percentage of card details that worked, which they are ready to use in earnest for their fraudulent pursuits.
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Remember that the fraudster will start off with only six digits, yet there are many more card details required for a successful transaction. If those are entered erroneously, the transaction will decline. This includes the CVV number, the expiration date, as well as likely address verification service (AVS) failures. Card testing transactions are executed remotely in a fast fashion, so distance checks should also be a hint as well as velocity alerts.
Fraudsters may use bad merchant accounts directly for this purpose, or more frequently involve multiple online stores and services during a BIN attack, as their attempts keep getting blocked at most outlets.
Posted on March 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
The Power of Attorney Mistake That Could Cost You Everything
By Rick Kahler CFP®
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Recently, reading a training manual on elder abuse, I was reminded of a financial risk that is often overlooked. One of the fastest and easiest ways to unravel your financial security is to have the wrong person gain control of your money.
The example in the manual mirrored a heartbreaking situation I once experienced with a long-term client. As her mental and physical health declined, this single woman moved into assisted living. Her newly designated power of attorney, a relative from out of town, took control of her financial affairs.
Almost immediately, without consulting us, the relative began making large withdrawals, closed her accounts, and transferred funds elsewhere. They challenged the financial plan, investments, and strategies we had established to safeguard the client’s financial security and provide for her long-term care. Even though their actions threatened the client’s wellbeing, we were powerless to stop them. Our only recourse was to report the behavior to the authorities.
This heartbreaking and frustrating experience underscored just how critical it is to be mindful when executing a Power of Attorney. Besides designating someone you trust, it is wise to build in safeguards to prevent even a well-meaning relative from inadvertently derailing a carefully constructed financial plan.
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One such safeguard is to include a financial advisor in your POA—as long as that person is a fee-only, fiduciary advisor with an obligation to act in your best interests. In many cases, advisors are hesitant to suggest this option because they are sensitive to the potential conflict of interest and do not want to appear self-serving. An unfortunate reality is that you should be cautious if an advisor, particularly one who sells products on commission, seems eager to be added to your POA.
Including your financial advisor in your POA does not mean you designate them as your agent to manage your affairs. Instead, you include a clause naming them as the professional of record you want your designated agent to continue working with. This creates continuity and accountability. It prevents your agent from replacing your advisor with someone who may be unfamiliar with your needs and goals, unqualified, or untrustworthy.
Your advisor might also recommend adding a secondary safeguard, such as naming an attorney or accountant to oversee the selection of a successor advisor in case your current advisor is unable to continue. This additional layer of protection ensures that the financial professionals guiding your portfolio remain aligned with your best interests. Taking these extra steps can save you—and your loved ones—from significant financial stress down the road.
Including safeguards in your POA is not about mistrusting your loved ones, but about equipping them with the right resources and support to act in your best interest. Financial management is complex, and it requires expertise that most people, even those with the best intentions, may not possess.
One of the hardest parts about planning for diminished financial capacity is the emotional aspect. No one likes to imagine a time when they might not be able to manage their own money. But in reality, taking steps now to protect your financial future is the ultimate act of control. It can help ensure that your wishes are respected and the financial foundation you’ve worked so hard to build remains intact.
Remember, too, that avoiding conversations often increases financial vulnerability. If you don’t have a POA or aren’t comfortable with what you do have, now is the time to bring it up with your advisor, attorney, or a trusted family member. These safeguards are about protecting yourself. They also support those you will rely on to care for you and your financial legacy,
Posted on March 16, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Vitaliy Katsenelson CFA
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Today, I’m going to share stories about my best and worst investment decisions. But don’t worry, this isn’t just a brag-and-cringe session about making or losing money. These stories are about the valuable lessons learned, and how these adventures in investing helped shape my current approach.
The Best Investment Decision
In investing, you don’t get extra points for creativity or difficulty. A million dollars earned while you are smiling buys as many potatoes as a million dollars that cost you your marriage and hair.
However, from a personal, creative satisfaction perspective, our investment in Uber was one of our best. That’s not to say that it has been the most successful decision from a financial perspective, at least not yet.
Uber doesn’t fit into the traditional value stock category. Until 2023, the third year of our ownership, it never made money. It was a stock everyone hated. After we bought it, I had clients reach out to me asking if I had been kidnapped and someone else was making these purchases of Uber.
We bought more shares very opportunistically during and after the pandemic. I wrote a long research report on it, which you can read here.
On one hand, Uber’s switchboard is a digital business, but the company also has a physical presence in thousands of cities, which incurs costs (the analog side of the business). Additionally, the availability of cheap money caused the ride-share market to go crazy and act rationally irrational, as competitors jostled in a land grab.
My thesis consisted of several insights:
Unlike traditional-tech, digital-only companies, Uber is a hybrid, both digital and analog. Thus, its cost structure is much higher than that of other companies. This, in part, explains the higher losses.
It has a strong brand; its name has become a verb.
The rideshare market is inevitable and will only continue to grow. Uber is not just in competition with taxis, second cars, or seldomly used cars; it is also in competition with the favors we ask of friends and relatives, such as dropping us off at the mechanic or picking us up from the doctor’s office.
Uber has global scale, which its competitors lack, allowing it to spread R&D across more markets.
As its revenue grows, each incremental dollar comes with a very high margin, which directly drops to the bottom line. Therefore, at some point, its earnings will explode to the upside as fixed costs stop growing, allowing it to scale.
The Uber story is not over; we still own the stock. I don’t want to do a celebratory dance. But this idea came with a lot of creative satisfaction. There is another point of pride here. Despite our very tumultuous ownership of this stock, we remained rational (I have written about that here). We bought more when it became extremely undervalued, and I would be lying if I said that was psychologically easy – it was not, but we followed our research and process.
The Worst Investment Decision
My worst investments that resulted in losses had several things in common: They were low-quality companies; their financials were complex and not transparent (for instance, one-time items were labeled as “one-time” every quarter); and they had questionable management.
However, they were all considered “cheap”… until they were not. Now, I hope you see why I am dogmatic about quality.
However.
When you are wrong on an investment and you lose money, the most you can lose is 100%. I have learned a lot from those. But they were not my worst investments. Those were the ones where I left 300–400% on the table when I sold too soon. Let me detail two examples.
EA – Electronic Arts
We bought EA in the early 2010s. I wrote about it – you can read my investment case for it here. To sum up, games were moving from being sold in stores to being digital downloads, which would lead to higher margins (don’t have to pay for packaging and Best Buy to sell them). The market for games was exploding, as every adult and teenager had a gaming device in their hands – a smartphone. The market for video games was going to be much larger. EA was the largest player in that space, with great franchises.
The following two years of ownership were very painful. EA had a few big game flops, and the market did not care about improving fundamentals. The stock kept declining. We continued to buy more. Every time we bought more shares, the stock fell further. Fast-forward a year or two. The stock doubled from our original purchase, but I was mentally exhausted. I did a celebratory dance and sold the stock. The stock then went up another 4x within a few years after we sold it. It went up for the right reasons – its earnings exploded to the upside, in line with my original thesis.
The sale was a mistake, not because the price went up but because I let frustration over the stock-price decline (volatility) get to me. Investing is a mental game. I learned from this adventure that it is important to zoom out and not obsess over individual stocks in the portfolio. This is why we have a portfolio. It was a very costly but educational mistake. Our ownership of Uber was not a walk in the park, either – just look at the stock price over the last few years. But I had learned my lesson from EA and was able to do the analysis, update our model, and zoom out.
In investing, there is a big difference between intellectual and tactile knowledge. I am going to go PG-13 on you for a second and quote the irascible Charlie Munger: “Learning about investing through a model portfolio is like learning about sex through romantic novels.” A big part of investing is observing yourself as an investor – your thoughts and emotions as you ride the actual rollercoaster of owning a stock.
I also made an important modification to our process.
We always value every company in the portfolio on earnings (free cash flows) at least four years out. Why four years? Three seems too short. There is no magic in this number, other than it being longer than most analyst estimates. We do this for all stocks in the portfolio, and then the total return for each is calculated and annualized. If a company has strong growth potential, it may appear to be expensive based on current earnings; but in reality, it may actually be cheap based on earnings projected four years from now.
On the other side of the spectrum, a company that has no growth or dividends may seem “cheap” based on its current earnings multiple, but this cheapness may quickly dissipate once a total return is calculated using future earnings. Time is on the side of growing businesses and the enemy of the ones that stand still. Therefore, a non-growing or slow-growing business needs a much greater discount (margin of safety) to secure a spot in our portfolio.
I want to stress another point. We sometimes sell a stock and then it goes higher. If we sold it for the right fundamental reasons, this doesn’t bother me. There is very little to learn.
Twilio
I’ll give you another crazy example. We bought Twilio at $25 in 2017 or so. Our thesis was that they had built the largest digital telecommunications network, which gave them a brief competitive advantage. They were also spending 5x more on R&D than competitors to build applications around this network, which would give them long-term advantages.
The stock price went up to $60 in a few months without anything significantly changing, so we sold a third of our position. Then it went up to $90, and we sold some more. To our disbelief, we sold the rest at around $120, a bit before the pandemic.
During the pandemic, Twilio’s price hit $400. I had zero regret about not holding on to the shares. Absolutely none. Twilio’s profitability did not match the stock market’s opinion of its price. Twilio’s stock price was as crazy to me at $250 as it was at $300 or $400. After reviewing our models, we concluded that even $120 was at the extreme end of our optimistic assumptions. Fast-forward to today, where the stock is at $60 or so. We are currently sharpening our pencils, but we have not bought the stock – yet.
Selling EA was a mistake; selling Twilio was not.
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Key takeaways
My “best investment decision” with Uber wasn’t just about financial gains, but the creative satisfaction it brought. It taught me the value of sticking to our research and process, even when it’s psychologically challenging.
The worst investments often share common traits: low-quality companies, complex financials, questionable management, and the illusion of being “cheap.” This reinforces my dogmatic stance on prioritizing quality.
Sometimes, the costliest mistakes aren’t the ones where you lose money, but those where you leave significant gains on the table by selling too soon. My experience with EA taught me this lesson the hard way.
There’s a crucial difference between intellectual and tactile knowledge in investing. Actually owning stocks and experiencing the emotional roller coaster is invaluable for developing as an investor.
Selling a stock that later increases in value isn’t always a mistake if the decision was based on sound fundamental reasons. My experience with Twilio illustrates this point – sometimes it’s right to sell even if the price continues to climb.
NOTE:Please read the following important disclosure here.
According to Patricia Salber MD [personal communication], there are a number of reasons why direct patient access to laboratory medical results is a good idea:
Between 8 and 26% of abnormal test results, including those suspicious for cancer, are not followed up in a timely manner. Direct access could help reduce the number of times this occurs
Self-management, particularly of chronic illness has known benefits. Just like the QS people, many folks with chronic illness obtain and manage to self-acquired lab results every day via gluco-meters, home pulmonary function tests, blood pressure measurements, and so forth. Direct access to laboratory-acquired data, one could argue is a continuation of that personal responsibility
Patients want to be notified about their results in what they perceive as a timely fashion. In one study, patients who received direct notification of their bone density tests results were more likely to perceive they had timely notification compared to usual care even though there was no measurable effect on actual treatment received after three months
Being more responsible for test results could encourage consumers to try to learn more about the meaning of the test results, conceivably increasing their health literacy.
But, the arguments against direct access discussed include the following:
Patients prefer their physicians contact them directly when they have abnormal test results, although the major studies published in 2005 and 2009, preceded the extraordinary use of the internet to access health information that exists today.
There is concern over whether patients will know what to do when they receive the results – will they make erroneous interpretations or fail to contact their docs? This could be, but the intent of the proposed rule is shared access to the results. We suspect if the rule become law, docs will develop better notification mechanisms so that they reach the patient before the patient directly accesses the results or lab companies will design better lab test notifications with easy-to-understand interpretations or a whole new industry will appear that can provide instantly available individualized lab interpretation…or maybe all three of these would happen and that would be a very good thing.
Unknown impact of dual notification (doctors and patients) of lab test results on physician behavior…would docs simply shift responsibility for initiating follow-up care from themselves to their patients?
Would direct access of life-changing lab tests, such as HIV or malignancy, lead to unnecessary patient anxiety – or worse? (Conversely, is there less anxiety, desperation, or suicidal ideation if the bad news is delivered face to face?
Individuals likely may contact their physicians immediately after getting the lab results asking for a telephonic or face-to-face interpretation … it is not known how this would impact physician workload and/or potential for reimbursement [personal communication, Richard Hudson DO, Atlanta, GA].
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters and IRS
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Straddles: A straddle is any set of offsetting positions on personal property. For example, a straddle may consist of a purchased option to buy and a purchased option to sell on the same number of shares of the security, with the same exercise price and period.
Personal property.
This is any actively traded property. It includes stock options and contracts to buy stock but generally does not include stock.
Straddle rules for stock.
Although stock is generally excluded from the definition of personal property when applying the straddle rules, it is included in the following two situations.
The stock is of a type that is actively traded, and at least one of the offsetting positions is a position on that stock or substantially similar or related property.
The stock is in a corporation formed or availed of to take positions in personal property that offset positions taken by any shareholder.
Note
For positions established before October 22, 2004, condition 1 above does not apply. Instead, personal property includes stock if condition 2 above applies or the stock was part of a straddle in which at least one of the offsetting positions was:
An option to buy or sell the stock or substantially identical stock or securities,
A securities futures contract on the stock or substantially identical stock or securities, or
A position on substantially similar or related property (other than stock).
Position
A position is an interest in personal property. A position can be a forward or futures contract or an option.
An interest in a loan denominated in a foreign currency is treated as a position in that currency. For the straddle rules, foreign currency for which there is an active inter bank market is considered to be actively traded personal property.
Offsetting position
This is a position that substantially reduces any risk of loss you may have from holding another position. However, if a position is part of a straddle that is not an identified straddle, do not treat it as offsetting to a position that is part of an identified straddle.
Presumed offsetting positions
Two or more positions will be presumed to be offsetting if:
The positions are established in the same personal property (or in a contract for this property), and the value of one or more positions varies inversely with the value of one or more of the other positions;
The positions are in the same personal property, even if this property is in a substantially changed form, and the positions’ values vary inversely as described in the first condition;
The positions are in debt instruments with a similar maturity, and the positions’ values vary inversely as described in the first condition;
The positions are sold or marketed as offsetting positions, whether or not the positions are called a straddle, spread, butterfly, or any similar name; or
The aggregate margin requirement for the positions is lower than the sum of the margin requirements for each position if held separately.
Related persons
To determine if two or more positions are offsetting, you will be treated as holding any position your spouse holds during the same period. If you take into account part or all of the gain or loss for a position held by a flow-through entity, such as a partnership or trust, you are also considered to hold that position.
Some Stupid Things Financial Advisors Say to Physician Clients
A few years ago and just for giggles, colleague Lon Jefferies MBA CFP® and I collected a list of dumb-stupid things said by some Financial Advisors to their doctor, dentist, nurse and and other medical professional clients, along with some recommended under-breath rejoinders:
“They don’t have any debt except for a mortgage and student loans.” OK. And I’m vegan except for bacon-wrapped steak.
“Earnings were positive before one-time charges.” This is Wall Street’s equivalent of, “Other than that Mrs. Lincoln; how was the play?”
“Earnings missed estimates.” No. Earnings don’t miss estimates; estimates miss earnings. No one ever says “the weather missed estimates.” They blame the weatherman for getting it wrong. Finance is the only industry where people blame their poor forecasting skills on reality.
“Earnings met expectations, but analysts were looking for a beat.” If you’re expecting earnings to beat expectations, you don’t know what the word “expectations” means.
“It’s a Ponzi scheme.” The number of things called Ponzi schemes that are actually Ponzi schemes rounds to zero. It’s become a synonym for “thing I disagree with.”
“The [thing not going perfectly] crisis.” Boy who cried wolf, meet analyst who called crisis.
“He predicted the market crash in 2008.” He also predicted a crash in 2006, 2004, 2003, 2001, 1998, 1997, 1995, 1992, 1989, 1984, 1971…
“More buyers than sellers.” This is the equivalent of saying someone has more mothers than fathers. There’s one buyer and one seller for every trade. Every single one.
“Stocks suffer their biggest drop since September.” You know September was only six weeks ago, right?
“We’re cautiously optimistic.” You’re also an oxymoron.
[Guy on TV]: “It’s time to [buy/sell] stocks.” Who is this advice for? A 20-year-old with 60 years of investing in front of him, or a 82-year-old widow who needs money for a nursing home? Doesn’t that make a difference?
“We’re neutral on this stock.” Stop it. You don’t deserve a paycheck for that.
“There’s minimal downside on this stock.” Some lessons have to be learned the hard way.
“We’re trying to maximize returns and minimize risks.” Unlike everyone else, who are just dying to set their money ablaze!
“Shares fell after the company lowered guidance.” Guys, they just proved their guidance can be wrong. Why are you taking this new one seriously?
“Our bullish case is conservative.” Then it’s not a bullish case. It’s a conservative case. Those words mean opposite things.
“We look where others don’t.” This is said by so many investors that it has to be untrue most of the time.
“Is [X] the next black swan?” Nassim Taleb’s blood pressure rises every time someone says this. You can’t predict black swans. That’s what makes them dangerous.
“We’re waiting for more certainty.” Good call. Like in 1929, 1999 and 2007, when everyone knew exactly what the future looked like. Can’t wait!
“The Dow is down 50 points as investors react to news of [X].” Stop it – you’re just making stuff up. “Stocks are down and no one knows why” is the only honest headline in this category.
“Investment guru [insert name] says stocks are [insert forecast].” Go to Morningstar.com. Look up that guru’s track record against their benchmark. More often than not, their career performance lags an index fund. Stop calling them gurus.
“We’re constructive on the market.” I have no idea what that means. I don’t think you do, either.
“[Noun] [verb] bubble.” (That’s a sarcastic observation from investor Eddy Elfenbein.)
“Investors are fleeing the market.” Every stock is owned by someone all the time.
“We expect more volatility.” There has never been a time when this was not the case. Let me guess, you also expect more winters?
“This is a strong buy.” What do I do with this? Click the mouse harder when placing the order in my brokerage account?
“He was tired of throwing his money away renting, so he bought a house.” He knows a mortgage is renting money from a bank, right?
“This is a cyclical bull market in a secular bear.” Vapid nonsense.
“Will Obamacare ruin the economy?” No. And get a grip.
So, don’t let these aphorisms blind you to the critical thinking skills you learned in college, honed in medical school and apply every day in life.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: CONTACT: MarcinkoAdvisors@outlook.com
Posted on March 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
US stocks plunged on Monday as investors processed growing concerns about the health of the US economy after President Trump and his top economic officials acknowledged the possibility of a potential rough patch.
The Dow Jones Industrial Average (^DJI) fell nearly 900 points, or over 2%, while the benchmark S&P 500 (^GSPC) dropped around 2.7% after the index posted its worst week since September. The tech-heavy NASDAQ Composite (^IXIC) fell 4% in its worst day since 2022, as the “Magnificent Seven” stocks led the sell-off. Tesla’s (TSLA) rout continued, plunging 15% and officially wiping out the gains it had made in the wake of Trump’s election win. Nvidia (NVDA), Apple (AAPL), Google parent Alphabet (GOOG), and Meta (META) all each lost more than 4%.
Key inflation data includes the Consumer Price Index (CPI) and Producer Price Index (PPI) on Wednesday and Thursday could help set the tone, though economic growth concerns seem to have replaced inflation as the prime concern. The S&P 500 index (SPX) dropped more than 3% last week, the worst performance since September.
However, the U.S. economy “is in a good place” despite recent policy uncertainty, Federal Reserve Chairman Jerome Powell said Friday. He sees no need to hurry rate cuts until there’s more policy clarity, Bloomberg reported. Stocks rallied on Powell’s words late Friday, but Monday’s early action indicates that rallies continue being sold, and the Cboe Volatility Index (VIX) rose above 26 as investors piled into risk-off assets like bonds. The 200-day moving average of 5,734 for the SPX remains a key technical support area, and the SPX was on pace to open below that Monday, now more than 6% off of all-time highs but not yet in –10% correction territory.
I was having lunch with a close friend of mine. He mentioned that he had accumulated a significant sum of money and did not know what to do with it. It was sitting in bonds, and inflation was eating its purchasing power at a very rapid rate.
He is a dentist and had originally thought about expanding his business, but a shortage of labor and surging wages turned expanding into a risky and low-return investment. He complained that the stock market was extremely expensive. I agreed.*
He said that the only thing left was residential real estate. I pushed back. “What do you think will happen to the affordability of houses if – and most likely when – interest rates go up? Inflation is now 6%. I don’t know where it will be in a year or two, but what if it becomes a staple of the economy? Interest rates will not be where they are today. Even at 5% interest rates [I know, a number unimaginable today] houses become unaffordable to a significant portion of the population. Yes, borrowers’ incomes will be higher in nominal terms, but the impact of the doubling of interest rates on the cost of mortgages will be devastating to affordability.”
He rejoined, “But look at what happened to housing over the last twenty years. Housing prices have consistently increased, even despite the financial crisis.”
I agreed, but I qualified his statement: “Over the past twenty, actually thirty, years interest rates declined. I honestly don’t know where interest rates will be in the future. But probabilistically, knowing what we know now, the chances that they are going to be higher, much higher, are more likely than their staying low. Especially if you think that inflation will persist.”
We quickly shifted our conversation toward more meaningful topics, like kids.
It seems that every year I think we have finally reached the peak of crazy, only to be proven wrong the next year. The stock market and thus index funds, just like real estate, have only gone one way – up. Index funds became the blunt instrument of choice in an always-rising market. So far, this choice has paid off nicely.
The market is the most expensive it has ever been, and thus future returns of the market and index funds will be unexciting. (I am being gentle here.)
You don’t have to be a stock market junkie to notice the pervasive feeling of euphoria. But euphoria is a temporary, not a permanent emotion; and at least when it comes to the stock market, it is usually supplanted by despair. Market appreciation that was driven by expanding valuations was not a gift but a loan – the type of loan that must always be paid back with a high rate of interest.
I don’t know what straw will break the feeble back of this market or what will cause the music to stop (there, you got two analogies for the price of none). We are in an environment where there are very few good options. If you do nothing, your savings will be eaten away by inflation. If you do something, you find that most assets, including the stock market as a whole, are incredibly overvalued.
We are doing the only sensible thing that you can do today. We spend very little time thinking about straws or what will cause the music to stop or how overvalued the market is. We are focusing all our energy on patiently building a portfolio of high-quality, cash-generative, significantly undervalued businesses that have pricing power.
This has admittedly been less rewarding than taking risky bets on unimaginably expensive assets. It may lack the excitement of sinking money into the darlings you see in the news every day, but we hope that our stocks will look like rare gems when the euphoria condenses into despair. As we keep repeating in every letter, the market is insanely overvalued. Our portfolio is anything but – we don’t own “the market”.
*A question may arise:Why did I not tell my dentist friend to pick individual stocks? He runs a busy dental practice and wouldn’t have the time or the training to pick stocks.
Why didn’t I offer him our services? IMA manages all my and my family’s liquid assets, but I have a rule that I never (ever!) break – I don’t manage my friends’ money. I’ll help them as much as possible with free advice but will never have a professional relationship with them. I intentionally create a separation between my personal and professional lives. After a difficult day in the market, I want to be able to go for beers with friends and leave the market at the office.
Also, this simplifies my relationships with my friends. There is no ambiguity in our friendship.
You can also listen to a professional narration of this article on iTunes & online.
ENCORE: March 22, 2004
A basic property of religion is that the believer takes a leap of faith: to believe without expecting proof. Often you find this property of religion in other, unexpected places – for example, in the stock market. It takes a while for a company to develop a “religious” following: only a few high-quality, well-respected companies with long track records ever become worshipped by millions of investors. My partner, Michael Conn, calls these “religion stocks.” The stock has to make a lot of shareholders happy for a long period of time to form this psychological link.
The stories (which are often true) of relatives or friends buying few hundred shares of the company and becoming millionaires have to fester a while for a stock to become a religion. Little by little, the past success of the company turns into an absolute – and eternal – truth. Investors’ belief becomes set: the past success paints a clear picture of the future.
Gradually, investors turn from cautious shareholders into loud cheerleaders. Management is praised as visionary. The stock becomes a one-decision stock: buy. This euphoria is not created overnight. It takes a long time to build it, and a lot of healthy pessimists have to become converted into believers before a stock becomes a “religion.”
Once a stock is lifted up to “religion” status, beware: Logic is out the window. Analysts start using T-bills to discount the company’s cash flows in order to justify extraordinary valuations. Why, they ask, would you use any other discount rate if there is no risk? When a T-bill doesn’t do the trick, suddenly new and “more appropriate” valuation metrics are discovered.
Other investors don’t even try to justify the valuation – the stock did well for me in the past, why would it stop working in the future? Faith has taken over the stock. Fundamentals became a casualty of “stock religion.” These stocks are widely held. The common perception is that they are not risky.
The general public loves these companies because they can relate to the companies’ brands. A dying husband would tell his wife, “Never sell _______ (fill in the blank with the company name).” Whenever a problem surfaces at a “religion stock,” it is brushed away with the comment that “it’s not like the company is going to go out of business.” True, a “religion stock” company is a solid leader in almost every market segment where it competes and the company’s products carry a strong brand name. However, one should always remember to distinguish between good companies and good stocks.
Coca-Cola is a classic example of a “religion stock.” There are very few companies that have delivered such consistent performance for so long and have such a strong international brand name as Coca-Cola. It is hard not to admire the company.
But admiration of Coca-Cola achieved an unbelievable level in the late nineties. In the ten years leading up to 1999, Coca-Cola grew earnings at 14.5% a year, very impressive for a 103-year-old company. It had very little debt, great cash flow and a top-tier management. This admiration came at a steep price: Coca-Cola commanded a P/E of 47.5. That P/E was 2.7 times the market P/E. Even after T-bills could no longer justify Coke’s valuation, analysts started to price “hidden” assets – Coke’s worldwide brand. No money manager ever got fired for owning Coca-Cola.
The company may not have had a lot of business risk. But in 1999, the high valuation was pricing in expectations that were impossible for any mature company to meet. “The future ain’t what it used to be” – Yogi Berra never lets us down. Success over a prolonged period of time brings a problem to any company – the law of large numbers.
Enormous domestic and international market share, combined with maturity of the soft drink market, has made it very difficult for Coca-Cola to grow earnings and sales at rates comparable to the pre-1999 years. In the past five years, earnings and sales have grown 2.5% and 1.5% respectively. After Roberto C. Goizueta’s death, Coke struggled to find a good replacement – which it acutely needed.
Old age and arthritis eventually catch up with “religion stocks.” No company can grow at a fast pace forever. Growth in earnings and sales eventually decelerates. That leads to a gradual deflation of the “religion” premium. For Coke, the descent from its “religious” status resulted in a drop of nearly 20% in the share price – versus an increase of 65% in the broad market over the same time. And at current prices, the stock still is not cheap by any means. It trades at 25 times December 2004 earnings, despite expectations for sales growth in the mid single digits and EPS growth in the low double digits.
It takes a while for the religion premium to be totally deflated because faith is a very strong emotion. A lot of frustration with sub-par performance has to come to the surface.
Disappointment chips away at faith one day at a time. “Religion” stocks are not safe stocks. The leap of faith and perception of safety come at a large cost: the hidden risk of reduction in the “religion premium.” The risk is hidden because it never showed itself in the past. “Religion” stocks by definition have had an incredibly consistent track record. Risk was rarely observed.
However, this hidden risk is unique because it is not a question of if it will show up but a question of when. It is very hard to predict how far the premium will inflate before it deflates – but it will deflate eventually. When it does, the damage to the portfolio can be huge.
Religion stocks generally have a disproportionate weight in portfolios because they are never sold – exposing the trying-to-be-cautious investor to even greater risks. Coca-Cola is not alone in this exclusive club. General Electric, Gillette, Berkshire Hathaway are all proud members of the “religion stock” club as well. Past members would include: Polaroid – bankrupt; Eastman Kodak – in a major restructuring; AT&T – struggling to keep its head above water. That stock is down from over $80 in 1999 to $18 today.
Emotions have no place in investing. Faith, love, hate, and disgust should be left for other aspects of our life. More often than not, emotions guide us to do the opposite of what we need to do to be successful. Investors need to be agnostic towards “religion stocks.” The comfort and false sense of certainty that those stocks bring to the portfolio come at a huge cost: prolonged under performance.
My thoughts today (20+ years later)
This is one of the first investment articles I ever wrote. I had just started writing for TheStreet.com. It’s interesting to read this article more than 20 years later. I am surprised my writing was not as bad as I had feared (though in many cases it was worse than I feared when I read my other early articles).
So much has happened since then – I am a different person today than I was back then. I have two more kids; I have written three more books and a thousand articles. The last two decades were my formative years as an investor and adult.
The goal of the article was not to make predictions but to warn readers that the long-term success of certain companies creates a cult-like following and deforms thinking. In fact, my original article – the one I submitted to TheStreet.com – did not mention any companies other than Coke. The editors wanted me to include more names so that the article would show up on more pages of Yahoo! Finance.
With the exception of Berkshire Hathaway, all of these companies have produced mediocre or horrible returns. In the best case, their fundamental returns in their old age were only a fraction of what they were when these companies were younger and the world was their oyster.
To my surprise, Coke’s stock is still trading at a high valuation. Its business has performed like the old-timer it is, with revenue and earnings growing by only 3–4% a year. The days of double-digit revenue and earnings growth were left in the 80s and 90s, though the high valuation remained.
Posted on March 7, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Base-Erosion Anti-Abuse Tax (BEAT): The 2017 tax reforms moved the U.S. from a worldwide taxation system to a quasi-territorial system, so foreign earnings are no longer included in a company’s domestic tax base.
To discourage companies operating in the U.S. from avoiding tax liability by shifting profits out of the country, Congress imposed a 10% minimum tax called Base-Erosion Anti-Abuse Tax (BEAT). The BEAT rate will increase from 10% to 12.5% in 2026.
Posted on March 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
Electronic Data Gathering, Analysis, and Retrieval
By Staff Reporters
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EDGAR (Electronic Data Gathering, Analysis, and Retrieval) is an internal database system operated by the U.S. Securities and Exchange Commission (SEC) that performs automated collection, validation, indexing, and accepted forwarding of submissions by companies and others who are required by law to file forms with the SEC. The database contains a wealth of information about the commission and the securities industry which is freely available to the public via the Internet.
In September 2017, SEC Chairman Jay Clayton revealed the database had been hacked and that companies’ data may have been used by criminals for insider trading.
In general, a roadshow is a series of meetings or presentations in which key members of a private company, usually executives, pitch the initial public offering, or IPO, to prospective investors. Effectively, the company is taking its branding message on the road to meet with investors in different cities, hence the name.
The IPO roadshow presentation is an important part of the IPO process in which a company sells new shares to the public for the first time. Whether a company’s IPO succeeds or not can hinge on interest generated among investors before the stock makes its debut on an exchange.
There are also some cases where company executives will embark on a road show to meet with investors to talk about their company, even if they’re not planning an IPO.
Pros and Cons of a Roadshow
According to Rebecca Lake, if the company goes public and no one buys its shares, then the IPO ends up being a flop, which can affect the company’s success in the near and long term. If the company experiences an IPO pop, in which its price goes much higher than its initial offering price, it could be a sign that underwriters mispriced the stock.
A roadshow is also important for helping determine how to price the company’s stock when the IPO launches. If the roadshow ends up being a smashing success, for example, that can cause the underwriters to adjust their expectations for the stock’s IPO price.
On the other hand, if the roadshow doesn’t seem to be generating much buzz around the company at all, that could cause the price to be adjusted downward.
In a worst-case scenario, the company may decide to pull the plug on the IPO altogether or to go a different route, such as a private IPO placement.
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.
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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.
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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
Posted on March 1, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
US stocks gained ground Friday following a key inflation reading that largely met expectations and as fresh tariff threats added to uncertainty over Big Tech prospects. The S&P 500 (^GSPC) gained 1.6%%, while the tech-heavy NASDAQ Composite (^IXIC) was up about 1.5% after suffering a Nvidia-led (NVDA) sell-off on Thursday. The Dow Jones Industrial Average (^DJI) climbed 1.3%. All three major averages reversed earlier losses, sending February off with a relief rally.
Markets wrapped the month February with sharp weekly and monthly losses after suffering the buffets of tariff moves. The NASDAQ shed close to 5% in February, while the S&P 500 and Dow suffered drops of around 2%.
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.
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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.
Posted on February 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dan Ariely PhD
THE IRRATIONAL ECONOMIST
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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.
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 15, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
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.
Posted on February 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
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%
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.
A Sovereign Wealth Fund (SWF) is a large pool of capital managed by a country’s government to achieve specific economic and social goals. These funds are invested in various assets such as stocks, bonds, real estate, commodities, and other financial instruments.
SWFs are typically funded from the savings of state-owned enterprises, foreign currency reserves from central banks, or commodity exports. The size and composition of each SWF can vary significantly between countries based on their respective economic circumstances. Each country has various reasons for setting up an SWF. However, the most common purpose of establishing one is to diversify and protect a country’s economy. For instance, this fund can be used as emergency reserves for potential future global financial shocks.
Purpose of a Sovereign Wealth Fund
Sovereign wealth funds invest a country’s wealth to achieve the government’s economic and social objectives. These funds provide countries with an additional method to diversify their economies and reduce risk exposure. They also give governments a chance to invest in global markets outside their own countries, which can get them better returns on their investments. This increases the earning potential on foreign exchanges and provides additional economic stability.
Furthermore, SWFs are a valuable tool to help countries build up buffers and savings for future generations to be better prepared for future economic shocks. Proper use of SWFs leads to long-term economic growth and stability.
In addition to providing an alternative form of investment for governments and enterprises worldwide, SWFs have also been used to increase financial transparency and accountability in many countries. By making their investment decisions public, these funds help promote corporate governance standards across the globe. This encourages market stability and reduces risks associated with certain types of investments.
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.”
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.
Over the last few years, our portfolio has skewed more international, and this is the topic I want to address today. The US is a wonderful country and has many significant competitive advantages over the rest of the world. Despite all of its flaws, it has the most stable political system. It has great geography: It’s bordered by friendly neighbors to the north and south, and by mostly friendly oceans to the east and west. It has an abundance of natural resources. It is one of the largest democracies and has the right amount of capitalism (though we’ve been slipping in this department). We have the best capital markets, and the US is the best place in the world to start a new business, take risks and innovate. These factors led to the coronation of the US dollar as the world’s reserve currency.Ideally, in a perfect world, we’d want to have a portfolio of only US companies. Not because we are patriots, but because our life at IMA would be so much easier. Let me explain all the extra headaches we incur when we own foreign stocks. European markets open 7–8 hours earlier than ours; Japan is 16 hours ahead.
Thus, we have to place orders early in the morning, sometimes in the middle of the night. Our trading system, which links directly to US exchanges, allows us to buy or sell any US stock electronically, directly through our software. It is not linked to foreign exchanges, thus foreign trading comes with significantly more friction and consumes more time. Foreign stocks have multiple tickers, which constantly confuse our clients – this means we receive more inbound inquiries on them. US trading comes with zero commissions, allowing us to accumulate a position slowly, in tiny increments, with little effort. Brokers charge commissions on foreign stocks, so we have to be sensitive to how we are accumulating or disposing of a stock. I am sure I am missing half a dozen other headaches.
Yes, foreign stocks are a big headache for the IMA team. We are not a masochistic bunch, so let me explain why we go through this brain and time damage.Over the last decade the US has attracted the bulk of the capital flows, and the US stock market is trading at one of the highest valuations in US history. Historically, returns that followed such sky-high valuations have been mediocre at best. I wrote two books on this subject. How much you pay for a business, even if it is a great one, is important, as it is one of the key inputs determining your future returns. When we look for stocks, our searches are global. We look at the US and at foreign markets that have the rule of law. But our goal is to buy the stock that offers the highest risk-adjusted returns. For us to buy a foreign stock, it has to compensate us for the extra time and trouble involved – in other words it has to be a super-attractive investment.
Let me give you a few examples.
When we looked at defense companies, we examined all of them, in the US and internationally. We bought a few in the US but found that European defense companies were a more compelling proposition. First of all, Europe has been sipping Chianti, Bordeaux, Riesling, and Earl Grey for the last thirty years while collecting peace dividends and significantly underinvesting in defense. The US, to a large degree, became NATO.We have more enemies today than at any time in my lifetime, and they are stronger (China has a bigger manufacturing base than the US) and aligning with each other. There is an unthinkable war in Europe, where one country attacked another to steal its territory. China is contemplating invading Taiwan – a tiny island that produces the bulk of the world’s semiconductors. The Middle East is on fire. Rebels most of us didn’t even know existed are making the Red Sea unnavigable.
And from the European perspective, the US is becoming a fickle friend. Europe is racing to create a $500 billion defense fund, per the FT:Trump’s threat to withdraw US security guarantees from underspending Nato allies has spurred European capitals to explore more radical defense funding options, including joint borrowing that has traditionally been ruled out by fiscal hawks in Germany, the Netherlands and Denmark.
European defense spending is going up and will continue to go up, no matter who is in power and regardless of deficits. Thus, when we looked at defense companies, American counterparts were more expensive and had relatively shorter (though increasing) growth runways. We bought European defense stocks, and so far, it looks like we made the right bet.
On the surface, one of the main risks of buying foreign stocks is that we are making a bet against the US dollar. As you’ll see, this is a bit more nuanced than simply where stocks are listed.I don’t know where the dollar will be over the next five or ten years. Nobody does. Currencies are priced relative to one another. Thus, to forecast the US dollar versus the euro, I’d need two crystal balls – one for the US and another for the EU. I don’t have even one.There are a lot of policies the new administration wants to implement that may cause the dollar to appreciate. For instance, less regulation – if Musk succeeds – would be a huge positive for US economic growth. We need a lot more pragmatism in Washington, DC, something we’ve lost over the years.
But then, the US government embracing Bitcoin is probably one of the most idiotic policy ideas I’ve ever seen come from a politician (though there are contenders). It’s especially baffling when you consider that the only reason we’re not dealing with 20% mortgage rates and 30% car loans – despite our $36 trillion (and growing) debt – is that the US dollar remains the world’s reserve currency. The US dollar doesn’t have good contenders, and this is why the US government watering the seeds of one makes little sense to me. (I wrote about the problems with Bitcoin here).
Also, often foreign stocks are only foreign in name. This is where things get nuanced fast. Philip Morris International (PM) is listed on the NYSE but today gets most of its sales from outside the US. British American Tobacco (BTI), listed in London and also trading as an ADR (American depositary receipt) in the US – despite having “British” in its name – gets half of its sales from the US and half from the rest of the world. We own Swedish and Canadian oil companies. When it comes to oil companies, the location of their assets matter far more than where the companies themselves are listed. Most of the oil assets that these companies hold are in Canada. We chose these companies not only because they’re significantly undervalued and have strong balance sheets, but also because they’re led by exceptional management teams who excel at running the business and at capital allocation – an uncommon trait in the commodity space.
Also, oil is a global commodity, and while many factors affect its price, it’s also indirectly a bet on a weakening US dollar, since oil is priced in US dollars. We have to take this into account when constructing our portfolio.Then we have a UK company that makes components for the aerospace industry.
However, aerospace is a global industry, and over the longer term, the company’s stock performance will be tied entirely to what the aerospace industry as a whole is doing. Its performance will be indifferent to where it’s listed. We bought it at a fraction of the valuation of its American counterparts.We pay close attention to our concentration in a particular country, as well as to our exposure to specific currencies and industries. But as you can see, it’s a lot more nuanced and intricate than simply looking at where a company is traded. Our default choice it to buy American companies; but at the end of the day, our goal is to grow your wealth while keeping the volatility of your blood pressure low, so that you don’t have to worry about the markets. Today the average US stock is trading at a nosebleed valuation. High-quality, undervalued, well-managed foreign-listed stocks are where we’re finding opportunities to hopefully achieve this goal, even if it means more headaches for the IMA team. One more thought: In the late 1990s, value investors experienced both paradise and hell. As tech and dotcom stocks soared higher, there were many cheap stocks to choose from that were neglected by the inflating bubble. That was the paradise part – an abundance of undervalued companies to pick from while the crowd stampeded into the bubble. The hell, of course, was the pain of being left behind while the crowd uncorked champagne.Today, if you only invest in the US, you’re experiencing two hells. Your stocks are underperforming, and even inexpensive stocks are expensive.
Yes, welcome to double hell. European stocks, however, offer paradise today. True, Europe is not the place it used to be a few decades ago – which is precisely why nuance and stock picking are so important. Value stocks always look less exciting than the ones everyone is talking about.
I’d love to hear your thoughts, so please leave your comment and feedback here. Also, if you missed my previous article “Embracing Stock Market Stoicism”, you can read it and leave a comment here.
MBA is the common abbreviation for a Master of Business Administration degree, and recipients typically stop attending school after receiving it.
However, those who are interested in conducting business research may decide to pursue a doctorate in business or management. Such students can earn a Ph.D. or a Doctor of Business Administration degree, commonly known as a DBA.
What ‘MSHA’ Stands For?
Master of Health Administration (MHA) and Master of Science in Health Administration (MSHA) are largely equivalent designations for degree programs that focus primarily on leadership and management of hospitals, healthcare organizations, and businesses that operate in the healthcare sector.
In contrast, an MBA in Health Administration is a Master of Business Administration degree program with a concentration, track, or specialization that provides students with several courses in topics specific to healthcare management and administration. Most of the coursework in an MBA program is devoted to general training in business functions, such as accounting, finance, logistics, marketing, personnel and project management.
MHA and MHSA programs devote all or most of their curriculum to studying the healthcare system, healthcare policy, and the application of business principles in the field of healthcare. MBA in Healthcare Administration programs devote only a portion of their curricula to topics specific to the healthcare sector.
Posted on January 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
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.
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
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
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.
Posted on January 15, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
The Producer Price Index, which tracks price changes companies see at a wholesale level, rose 3.3% over last year, up from 3% in November but less than economists expected. It rose 0.2% over the previous month, also less than expected. The report lays the groundwork for Wednesday’s heavily anticipated CPI print.
Investors will now turn their attention to Wednesday morning’s update on consumer prices, which are expected to remain sticky as the Federal Reserve continues its inflation fight.
On Tuesday, the benchmark S&P 500 (^GSPC) finished the trading day about 0.1% higher, while the tech-heavy NASDAQ Composite (^IXIC) dropped around 0.2% following a bumpy session on Wall Street. The Dow Jones Industrial Average (^DJI) moved roughly 0.5% higher to cap off back-to-back winning days for the blue chip index.
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.
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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.
Posted on January 14, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
“Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily“
A Partner of the Institute of Medical Business Advisors , Inc.
Stocks closed mixed on Monday, with Big Tech names paring losses as the dollar and bond yields climbed amid fading hopes for interest rate cuts ahead of this week’s key consumer inflation reports.
The S&P 500 (^GSPC) settled almost 0.2% higher after falling as much as 1% during the session, while the NASDAQ Composite (^IXIC) fell 0.4%. Shares of Nvidia (NVDA) and Apple (AAPL) closed off their session lows, though most “Magnificent Seven” tech megacaps fell during the session.
The blue-chip Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, rose 0.8%, or more than 350 points.
Stocks navigated another volatile session after Friday’s plunge, which wiped out all year-to-date gains for Wall Street’s major gauges. A hot December jobs report rattled markets, spurring concern that signs of strength in the economy will encourage the Federal Reserve to keep rates higher for longer.
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).
Posted on January 11, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Credit report with score on a desk
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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.
Posted on January 9, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Sustainability focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. There are many different approaches to Sustainability, with motives varying from positive societal impact, to wanting to achieve competitive financial results, or both.
Methods of sustainable investing include active share ownership, integration of ESG factors, thematic investing, impact investing and exclusion among others.
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 
STUPID COMMENTS: Financial Advisors Say to Physician Clients
BY DR. DAVID EDWARD MARCINKO; MBA MEd CMP®
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SPONSOR: http://www.MarcinkoAssociates.com
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Some Stupid Things Financial Advisors Say to Physician Clients
A few years ago and just for giggles, colleague Lon Jefferies MBA CFP® and I collected a list of dumb-stupid things said by some Financial Advisors to their doctor, dentist, nurse and and other medical professional clients, along with some recommended under-breath rejoinders:
So, don’t let these aphorisms blind you to the critical thinking skills you learned in college, honed in medical school and apply every day in life.
COMMENTS APPRECIATED
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EDUCATION: Books
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
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