DAILY UPDATE: Bitcoin and Stock Markets Soar

Posted on April 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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“

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Bitcoin climbed above $90,000 for the first time since March as investors search for alternatives anywhere they can find them.

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Stocks came off of their highs yesterday afternoon trading after US Treasury Secretary Scott Bessent reportedly said in a private speech for JPMorgan Chase that talks between the United States and China had yet to formally start and that negotiations will likely be a “slog.”

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Still, US stocks soared on Tuesday following a bruising day on Wall Street, as investors built hope for deescalation on several fronts of President Trump’s trade battles.

Still, markets delivered solid gains with Dow Jones Industrial Average (^DJI) adding over 1,000 points as the benchmark S&P 500 (^GSPC) and tech-heavy NASDAQ (^IXIC) each rose around 2.5% and 2.7%, respectively.

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Prior to Bessent’s reported comments, stocks hit earlier session highs as Bloomberg reported the treasury secretary told a closed-door investor summit Tuesday that “the tariff standoff with China is unsustainable and that he expects the situation to de-escalate.”

🟢 What’s up

  • Amazon rose 3.5% a day after Wells Fargo analysts revealed that the tech giant has paused some of its data center leases, the latest sign of an AI trade slowdown.
  • The DOJ has called for a breakup of Alphabet’s business. Investors don’t seem to mind: Shares of the search giant rose 2.57%.
  • Boeing gained 2% after announcing it will sell portions of its digital aviation solutions business to Thoma Bravo for $10.55 billion.
  • Ford is up 1.90% a day after reports emerged that it has stopped shipping cars to China.
  • 3M gained 8.12% after the industrial manufacturing giant beat Wall Street’s expectations in the first quarter.
  • Coreweave rose 8.74% after several Wall Street analysts initiated coverage of the newly public cloud computing company. While the pros lean toward bullish, the stock’s reception has been largely mixed.
  • Equifax soared 13.84% following strong results for the credit rating company, as well as its announcement of a $3 billion buyback program.
  • BP managed to gain 2.81% after regulatory filings revealed that Elliott Investment Management has accrued a 5% stake in the oil giant.
  • Verizon eked out a 0.61% gain after it beat Wall Street forecasts for the first quarter but lost more postpaid net phone subscribers than expected.

What’s down

  • Halliburton disappointed shareholders with a decline in both revenue and profits last quarter, sending the oil service company’s shares 5.57% lower.
  • Defense contractors tumbled after reporting mixed earnings. RTX lost 9.81%, and Northrop Grumman sank 12.66%.
  • Medpace Holdings crumbled 2.32% after the clinical research company revealed a 19% decline in net new business awards last quarter.

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HEDGE FUND: Wrap Fees?

Posted on April 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Staff Reporters

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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.

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CRYPTOCURRENCY: Real Money-or Not?

Posted on March 27, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Rick Kahler CFP®

http://www.KahlerFinancial.com

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Is cryptocurrency really money?

For years, I thought of cryptocurrency as a digital replacement for traditional money. After all, Bitcoin has “coin” right in the name. But let’s be honest: if Bitcoin is a currency, then my mother’s old Beanie Baby collection is a retirement fund.

A real currency needs to be stable. It should allow you to buy a coffee today without wondering whether, by tomorrow, that same amount could buy a car—or be worth nothing at all. Bitcoin and its kin like Ethereum and Dogecoin fail this test spectacularly.

Recently I have realized that cryptocurrency might be something even bigger and stranger than currency. It is not just digital money; it’s a bet on the huge global demand for financial autonomy.

In an age where every dollar is tracked, crypto offers an escape from traditional financial oversight. That makes it attractive not just to cybercriminals and tax evaders, but also to privacy advocates, speculators, and people living under restrictive financial policies. It doesn’t replace traditional money, it sidesteps it. It allows people to move, store, create, and destroy wealth outside of conventional banking systems. Some use it for transactions. Others see it as a hedge against inflation or a bet on the future of decentralized finance. Governments and banks don’t quite know what to do with it.

Crypto exists in a financial gray zone. It’s not widely accepted for everyday purchases, yet it can hold immense value. Unlike cash, which is limited by geography, or gold, which requires secure storage, crypto can be transferred globally in seconds. That’s part of its appeal, especially in countries with strict capital controls or volatile economies.

At the heart of cryptocurrency’s identity is the way it is produced. Crypto isn’t just a speculative asset—it’s an industrialized wealth-creation system. Imagine a massive warehouse filled with powerful computers “manufacturing” cryptocurrency. These mining operations exist solely to create new “coins” and process transactions, consuming enormous amounts of electricity in the process. The larger the operation, the more crypto it produces.

This is not how traditional currencies work. Fiat currencies are managed by central banks aiming for economic stability. Crypto, by contrast, is controlled by a decentralized network of miners and participants [block-chain]. Its supply is fixed, immune to government intervention. Some see this as a weakness. Others argue it is crypto’s greatest strength.

As Bitcoin and other major cryptocurrencies become more integrated into mainstream finance, the risks evolve. Even as regulators warn about crypto’s role in illicit activity, major corporations and investment firms are offering crypto-backed products. Some politicians, including President Trump, are discussing national Bitcoin reserves. This growing legitimacy makes crypto harder to ignore. But if crypto-backed funds become widespread, a crash could ripple far beyond crypto traders. That said, crypto remains a small fraction of global finance. Unless institutional adoption grows significantly, even a major downturn likely wouldn’t trigger systemic collapse.

Crypto’s increasing presence in finance does not make it a sound retirement investment. It is still a speculation. And speculations—whether in Bitcoin, meme stocks, or dot-com startups—are high-risk and not suitable for long-term financial security. Retirement portfolios should be built on diversification, stability, and predictable returns. Crypto offers none of these.

For years, I saw crypto as a failed currency. What I now think it to be is a decentralized speculative asset, driven by a growing demand to bypass traditional financial systems. Its future remains uncertain. As regulation increases and mainstream adoption expands, its role will continue to shift. But crypto is no longer just a niche experiment. It has become a financial force that governments, institutions, and individuals must reckon with—whether they embrace it or try to control it.

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POA: Power of Attorney Mistakes

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,

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PROSPECT THEORY: Physician-Client Empowerment for Financial Decision Making

Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

BEHAVIORAL ECONOMICS

By Staff Reporters

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Prospect theory is a psychological and behavioral economics theory developed by Daniel Kahneman and Amos Tversky in 1979. It explains how people make decisions when faced with alternatives involving risk, probability, and uncertainty. According to this theory, decisions are influenced by perceived losses or gains.

Example:

Amanda, a DO client, was just informed by her financial advisor that she needed to re-launch her 403-b retirement plan. Since she was leery about investing, she quietly wondered why she couldn’t DIY. Little does her FA know that she doesn’t intend to follow his advice, anyway! So, what went wrong?

The answer may be that her advisor didn’t deploy a behavioral economics framework to support her decision-making. One such framework is the “prospect theory” model that boils client decision-making into a “three step heuristic.”
 
Prospect theory makes the unspoken biases that we all have more explicit. By identifying all the background assumptions and preferences that clients [patients] bring to the office, decision-making can be crafted so that everyone [family, doctor and patient] or [FA, client and spouse] is on the same page. Briefly, the three steps are:

1. Simplify choices by focusing on the key differences between investment [treatment] options such as stock, bonds, cash, and index funds. 

2. Understanding that clients [patients] prefer greater certainty when it comes to pursuing financial [health] gains and are willing to accept uncertainty when trying to avoid a loss [illness].

3. Cognitive processes lead clients and patients to overestimate the value of their choices thanks to survivor bias, cognitive dissonance, appeals to authority and hindsight biases.

Assessment

Much like healthcare today, the current mass-customized approaches to the financial services industry falls short of recognizing more personalized advisory approaches like prospect theory and assisted client-centered investment decision-making.

 Jaan E. Sidorov MD [Harrisburg, PA]   

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DAILY UPDATE: Walgreens Boots Private Equity, Medical Cost Debt as Stock Markets Stabilize

Posted on March 8, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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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.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

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http://www.MarcinkoAssociates.com

Daily Update Provided By Staff Reporters Since 2007.
How May We Serve You?
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Walgreens Boots Alliance says it has agreed to be acquired by private equity firm Sycamore Partners as the struggling retailer looks to turn itself around after years of losing money. Walgreens said Thursday that Sycamore will pay $11.45 per share, giving the deal an equity value just under $10 billion. Shareholders could eventually receive up to an

CITE: https://tinyurl.com/2h47urt5

Stocks

  • The S&P 500 rose 0.6%
  • The NASDAQ 100 rose 0.7%
  • The Dow Jones Industrial Average rose 0.5%
  • The MSCI World Index rose 0.2%
  • Bloomberg Magnificent 7 Total Return Index rose 0.2%
  • The Russell 2000 Index rose 0.4%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro rose 0.6% to $1.0851
  • The British pound rose 0.4% to $1.2929
  • The Japanese yen was little changed at 147.89 per dollar

Cryptocurrencies

  • Bitcoin fell 4% to $86,226.2
  • Ether fell 3.8% to $2,129.51

Bonds

  • The yield on 10-year Treasuries advanced two basis points to 4.30%
  • Germany’s 10-year yield was little changed at 2.84%
  • Britain’s 10-year yield declined two basis points to 4.64%

CITE: https://tinyurl.com/tj8smmes

Stat: 20%. That’s how many US residents under age 49 have borrowed money to cover medical costs. (West Health and Gallup)

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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NEWEST THOUGHTS: Physician Personal Emergency Fund Size is Getting Complicated

Posted on February 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

SPONSOR: http://www.MarcinkoAssociates.com

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By Dr. David Edward Marcinko MBA MEd

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It has been said that most ordinary people should have at least three to six months of living expenses (not including taxes) in a cash-equivalent reserve fund that is easily accessible (i.e., liquid).  The amount needed for a one-month reserve is equal to the amount of expenses for the month, rather than the amount of monthly income. This is because during no-income months there is no income tax.  

However, the situation might not be the same for physicians in today’s harsh economic climate. 

The New Realities

Now, some physician-focused financial advisors, financial planners and Certified Medical Planners™ suggest even more reserve fund savings; up to two years. That’s because many factors come into play when determining how much a particular doctor’s family should have.

For example: 

  • Does the family have one income or two? If the doctor is in a dual-income family with stable incomes and they live on a single income, the need for a liquid reserve is less.  
  • How stable is the doctor’s income source? If a sole provider with an unstable income who spends all of the income each month, the need for a liquid cash reserve is high. 
  • Does the doctor own the practice, work in a clinic, medical group, hospital or healthcare system? In other words – employee (less control) or employer (more control). 
  • What is the doctor’s medical specialty and how has managed care penetrated his locale, or affected her focus? What about a DO, DDS/DMD or DPM, etc.
  • How does the family use its income each month; does it have a saver, spender, or investor mentality?  
  • Does the family anticipate the possibility of large expenses occurring in the future (medical practice start-up costs or practice purchase; children, medical school student debts; auto or home loans; and/or liability suits, etc)?  
  • Pan physician lifestyle?

The Past 

In the ancient past, a doctor may have opted for a nine-twelve month reserve if the need for security was high – and a six-to-nine month reserve if the need for security was low. But today, even more may be needed.  How about 15-18 months, or more? Perhaps even 24 months!

So, the following questions may be helpful in determining the amount of reserve needed by the physician: 

1. How long would it take you to find another job in your medical specialty if you suddenly found yourself unemployed – same for your spouse?

2. Would you have to relocate – same for your spouse? 

3. How much do you spend each month on fixed or discretionary expenses and would you be willing to lower your monthly expenses if you were unemployed? 

Assessment

Once the amount of reserve is determined, the doctor should use the appropriate investment vehicles for the funds. 

At minimum, the reserve should be invested in a money market fund. For larger reserves, an ultra-short-term bond fund might be appropriate for amounts over three-six months. While even larger reserves might be kept in a short term bond fund depending on interest rates and trends. 

So, what do the initials M.D. really mean? … More Dough!

How much reserve do you have and where is it stashed?

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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 

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INVESTING Psychology

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.

And when you do, it may be too late.

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PARADOX: Obsessing About Security Breeds Insecurity?

Posted on February 9, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Human life is Inherently Insecure

By Staff Reporters

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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.

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DJT EXECUTIVE ORDER: US Sovereign Wealth Fund Created

Posted on February 3, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

Trump orders creation of US sovereign wealth fund

BREAKING NEWS

By Staff Reporters

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What Is a Sovereign Wealth Fund (SWF)?

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.

MORE: https://www.financestrategists.com/financial-advisor/sovereign-wealth-fund-swf/

TRUMP: https://www.reuters.com/markets/wealth/trump-signs-executive-order-create-sovereign-wealth-fund-2025-02-03/

TRUMP: https://www.usnews.com/news/top-news/articles/2025-02-03/trump-signs-executive-order-to-create-sovereign-wealth-fund

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AUSTERITY: Financial Measures

Posted on December 19, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Austerity Financial Measures describe official actions (typically taken under duress) by financially challenged governments (those that are under the threat of otherwise not being able to meet all of their obligations to debt holders and other creditors) to reduce the amount of money they spend, freeing more of it for paying off liabilities.

Austerity measures commonly involve deficit cutting, reduced spending, and cuts in government benefits and services provided. They are considered a “necessary evil,” along with revenue-raising measures, for bringing government budgets back into financial balance.

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SALARY PRIME NUMBERS: Financial Success by Generation

Posted on November 27, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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According to HVL from Morning Brew, a new survey from financial services company Empower ignited a conversation about what monetary success means. Turns out, it depends on who you ask. Boomers believe that success means having an annual salary of about $100,000. Gen Z thinks your mom can’t brag about you to her dentist until you earn $600k/year. On average, respondents said success is making $270,000 annually.

Additionally, less than 40% of respondents said they considered themselves financially successful. Almost 50% don’t believe they will achieve the level of success they desire.

But there was some good news: Forty-three percent said their idea of success didn’t depend on a specific sum of money. And almost 60% said happiness is most important, as long as happiness is defined as “being able to spend money on the things and experiences that bring the most joy.”

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PHYSICIAN FINANCIAL FEAR: Money Anxiety & Chrometophobia

Posted on November 24, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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If you’ve found yourself worrying about the stock market or money lately, you definitely have company. Money anxiety, also called financial anxiety, has become more common than ever after the presidential election of November 2024.

In fact, the American Psychological Association’s 2022 Stress in America Survey, 87 percent of people who responded listed inflation as a source of significant stress. The rise in prices for everything from fuel to food has people from all backgrounds worried, today. The researchers say, in fact, that no other issue has caused this much stress since the survey began in 2007.

When money and financial concerns cause ongoing stress in your life, you could eventually begin to experience some feelings of anxiety as a result. This anxiety can, in turn, have a negative impact on your quality of life.

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Chrometophobia, commonly known as fear of money, is a psychological condition characterized by overwhelming anxiety and avoidance of currency; according to colleague Dan Ariely PhD.

CITE: https://www.r2library.com/Resource/Title/0826102549

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Physician Financial Fear is probably the most common emotion among physicians. The fear of being wrong – as well as the fear of being correct! It can be debilitating, as in the corollary expression on fear: the paralysis of analysis.

According to Paul Karasik, there are four common investor and physician fears, which can be addressed by financial advisors and psychologists in the following manner:

  • Fear of making the wrong decision: ameliorated by being a teacher and educator.
  • Fear of change: ameliorated by providing an agenda, outline and/or plan.
  • Fear of giving up control: ameliorated by asking for permission and agreement.
  • Fear of losing self-esteem: ameliorated by serving the client first and communicating that sentiment in a positive manner.

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NINE: Psychological Reasons We Do Dumb Things with Money [$$$$]

Posted on October 20, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

Yep – Even the Smart Folks!

By Lon Jefferies MBA CMP® CFP®

Dr. David Edward Marcinko MBA MEd CMP®

Lon Jeffries

In the Business Insider, Mandi Woodruff describes nine mental blocks that cause smart people to do dumb things. Review the list and itemize the factors that have negatively impacted your finances.

The Factors

  • Anchoring happens when we place too much emphasis on the first piece of information we receive regarding a given subject. For instance, when shopping for a wedding ring a salesman might tell us to spend three months’ salary. After hearing this, we may feel like we are doing something wrong if we stray from this advice, even though the guideline provided may cause us to spend more than we can afford.
  • Myopia (or nearsightedness) makes it hard for us to imagine what our lives might be like in the future. For example, because we are young, healthy, and in our prime earning years now, it may be hard for us to picture what life will be like when our health depletes and we know longer have the earnings necessary to support our standard of living. This short-sightedness makes it hard to save adequately when we are young, when saving does the most good.
  • Gambler’s fallacy occurs when we subconsciously believe we can use past events to predict the future. It is common for the hottest sector during one calendar year to attract the most investors the following year. Of course, just because an investment did well last year doesn’t mean it will continue to do well this year. In fact, it is more likely to lag the market.
  • Avoidance is simply procrastination. Even though you may only have the opportunity to adjust your health care plan through your employer once per year, researching alternative health plans is too much work and too boring for us to get around to it. Consequently, we stick with a plan that may not be best for us.
  • Confirmation bias causes us to place more emphasis on information that supports the opinion we already have. Consequently, we tend to ignore or downplay opinions that don’t mirror our own, leading us to make uninformed decisions.

NOTE: An interesting example of the confirmation bias is the case of David Rosenberg, who is one of the most well-known perpetual bears on Wall Street. In October, Mr. Rosenberg’s analysis forced him to warm to the current investment environment. His fans and followers, rather than appreciating his research and ability to adjust to new information, criticized him for changing his opinion.

As it turned out Mr. Rosenberg had fans not because of his expert analysis, but because he added intellectual heft to his followers pessimism and quasi-political desire for the system to collapse. Their view was that things were in permanent decline and his analysis, charts, and voice added respectability to their pre-existing bias. Mr. Rosenberg has now lost his fan base not because he was wrong for the last four years, but because he changed his mind.

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  • Loss aversion affected many investors during the crash of 2008. During the crash, many people decided they couldn’t afford to lose more and sold their investments. Of course, this caused the investors to sell at market troughs and miss the quick, dramatic recovery.
  • Overconfident investing happens when we believe we can out-smart other investors via market timing or through quick, frequent trading. Data convincingly shows that people who trade most often underperform the market by a significant margin over time.
  • Mental accounting takes place when we assign different values to money depending on where we get it from. For instance, even though we may have an aggressive saving goal for the year, it is likely easier for us to save money that we worked for than money that was given to us as a gift.
  • Herd mentality makes it very hard for humans to not take action when everyone around us does. For example, we may hear stories of people making significant profits buying, fixing up, and flipping homes and have the desire to get in on the action, even though we have no experience in real estate.

Assessment

The good news is that being aware of these tendencies can help us avoid mistakes. We’ll never be perfect, but avoiding detrimental decisions based on mental prejudices can give us an advantage in our financial and retirement planning efforts.

Conclusion

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ECONOMICS: Price Gouging VS. Supply & Demand

Posted on October 3, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

NEBULOUS DEFINITIONS

By Staff Reporters

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The simplest model of a market involves two things, supply and demand, and the price and quantity of the goods sold in the market are a function of both. When a natural disaster hits like Hurricane Helene, the immediate effect can be two-fold. In such situations, it is not unusual that the demand for certain products may increase. For example, if everyone is trying to leave the area, demand for gas may rise. The other effect is that supply for certain products may decrease. And, it may be more costly to transport gas in areas affected by a natural disaster, thus decreasing the supply of gas and in turn, increasing the price.

CITE: https://www.r2library.com/Resource

When supply decreases, the price of the good increases. And when demand increases, again the price of the good increases. So we would predict that the market price of gas, for example, would increase in areas recently affected by a hurricane. And in fact we do see this.

Price-gouging occurs when companies raise prices to unfair levels. There is no rule for what qualifies as price-gouging, but it is not an uncommon occurrence. For example in medicine, EpiPen costs is a current example of price increases that have been labeled unfair. 

Note: An epinephrine auto-injector (or adrenaline auto-injector, also known by the trade mark EpiPen) is a medical device for injecting a measured dose or doses of epinephrine (adrenaline) by means of auto-injector technology. It is most often used for the treatment of anaphylaxis. The first epinephrine auto-injector was brought to market in 1983.

Cite: https://tinyurl.com/55kmum86


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The M1 and M2 Money Supply

Posted on May 11, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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DEFINITION: In macro-economics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define “money”, but standard measures usually include currency in circulation (i.e. physical cash) and demand deposits (depositors’ easily accessed assets on the books of financial institutions . The Central Bank [FOMC] of a country may use a definition of what constitutes legal tender for its purposes.

CITE: https://www.r2library.com/Resource

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Though there are a few variations of money supply, most economists tend to focus on M1 and M2. The former takes into account cash and coins in circulation, as well as demand deposits in checking accounts and traveler’s checks. In other words, money that’s either in your hand or can be accessed very easily.

Meanwhile, M2 accounts for everything in M1 and adds savings accounts, money market funds, and certificates of deposit (CDs) below $100,000. It’s money you have access to, but it takes a little extra effort to put this capital to work. It’s M2 money supply that’s raising eyebrows on Wall Street and making history.

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What’s of interest is what’s happened to M2 money supply over the trailing year. Following a peak of $21.7 trillion in July 2022, M2 has fallen to a fresh reading of $20.81 trillion, as of May 2023. Although the May reading was higher than April and broke a nine-month downtrend, we’ve still witnessed a 4.1% aggregate drop in M2 from its all-time high. 

Considering that M2 enjoyed a historic expansion during the pandemic, it’s certainly possible that a 4.1% decline can be shrugged off as nothing more than money supply reverting back to the mean. But history suggests otherwise.

Though history rarely repeats itself on Wall Street, it often rhymes. We haven’t seen a meaningful year-over-year decline in M2 money supply since the Great Depression in 1933.

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And so, based on what we’re seeing from M2 money supply, commercial bank lending, and domestic banks tightening their lending standards for C&I loans, the ingredients for a U.S. recession are most definitely there. Stock losses have, historically, been most pronounced in the months that follow the official declaration of a recession by the eight-economist panel of the National Bureau of Economic Research.

However, Wall Street’s performance is largely dependent on your investment time frame. If you’re patient, these and other potentially worrisome money metrics represent nothing more than temporary white noise.

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KING IS CASH: In a Tough Interest Rate Ecosystem

Posted on July 19, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Cash is king, especially in this tough interest rate environment. That’s proving true in the mergers and acquisitions market this year, according to PwC’s US Deals 2023 midyear outlook, which says companies and private equity with cash in hand are making deals happen. There are “opportunities for corporates with strong balance sheets. Private equity sponsors with large amounts of dry powder also have been getting deals done,” according to PwC.

CITE: https://www.r2library.com/Resource

Deal makers need cash because lending has become tougher and more expensive to obtain. Additionally, “the IPO market has remained quiet for over a year.”

Even the private equity market, which often leans heavily on debt financing, is reaching for other ways to get deals done: “Some PE sponsors have turned to more creative financing solutions, including higher equity contribution, seller’s notes, paid in-kind financing and the private credit markets.”

The challenging market is also impacting deal size. PwC found that deal makers are eschewing big deals in favor of smaller opportunities. However, although the deals appear to be smaller, the volume of M&A activity is “relatively strong compared to” COVID pre-pandemic levels.

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MONEY FACTS: To Know and Enjoy!

Posted on June 19, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Jon Dulin

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After burning the midnight oil and reading through the National Archives, I have the following money facts I know you will enjoy.

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ELECTIONS: Money and Markets

Posted on November 9, 2022 by Dr. David Edward Marcinko MBA MEd CMP™

Historical Review

By Staff Reporters

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Now that the voting is behind us, it might be safe to start checking your portfolio. In recent history, stocks have only gone up after midterm elections:

  • In the year following every midterm election since 1950, the S&P 500 has risen—no matter which party won.
  • A divided government, which could happen if the GOP retakes at least the House, delivers the best market results: Data going back to 1932 shows average annual S&P returns of 13% when there’s a GOP-controlled Congress under a Democratic president, compared to 10% when Democrats have both, per RBC Capital Markets.

Why?

There’s some debate, but partisan gridlock can be advantageous for business because it minimizes the chance of major changes to taxes or other laws that impact companies. It also doesn’t hurt to have the uncertainty of the election in the rear-view mirror.

Right now however, investors are more focused on the FOMCs’ rate hikes in response to inflation. While politicians from both sides of the aisle have criticized Jerome Powell’s recent decisions, he’s unlikely to change course due to the election outcome. Plus, economists seem pretty convinced the US is headed toward a recession, regardless of who’s in control in Washington.

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What is the right relationship to money?

Posted on September 16, 2016 by Dr. David Edward Marcinko MBA MEd CMP™

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Money often costs too much.

-Ralph Waldo Emerson

By Gus: https://www.wisedrugged.com

Presented By J. Krishnamurti

As the Dow Jones soars to new peaks, it seems many of us feel a sense of security within the realm of money.

Less preoccupation maybe? Is th…

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Money

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What is the right relationship to money? presented by J. Krishnamurti

Conclusion

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Physicians and Money

Posted on July 25, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

A Commencement Address on “Positive Deviancy”

Staff Reporters

money1One June 12th, 2009, New Yorker staff writer Atul Gawande MD delivered this commencement address, titled “Money,” to the graduates of the University of Chicago; Pritzker School of Medicine. It expands on the themes he touched on in his recent article about health-care costs in McAllen, Texas, which figures in President Obama’s vision on health care reform. 

 

 

Link: http://www.newyorker.com/online/blogs/newsdesk/2009/06/atul-gawande-university-of-chicago-medical-school-commencement-address.html

Related posts at KevinMD.com

  1. “A board-certified, internal-medicine physician makes $7 more an hour than a hairstylist”
  2. Will universal health care lead to a physician shortage?
  3. Does preventive medicine really save money?

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