Here it is- the WCI Monthly Newsletter!
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Blog News

Welcome to the monthly newsletter, especially to the 300 new readers this month. We've had a lot of exciting stuff happening around here this month. Perhaps the most exciting thing was the addition of Passive Income M.D. to the WCI Blogging Network. Passive Income M.D., similar to Physician on Fire, is an anesthesiologist. However, unlike both previous members of The White Coat Investor Network, he is married to another physician and lives in a high cost of living area. Despite that, however, he managed to free himself from medicine just 6 years out of residency and they can both now practice on their terms. His writing focuses on "passive income," including both traditional investments like mutual funds and real estate, but also all kinds of side hustles and entrepreneurship. We're looking forward to featuring some of his content on the blog and podcast and working closely together for years to come. Be sure to check out the Passive Income M.D. blog if you have no yet done so.

We also started The White Coat Investor Financial Bootcamp, a free 12 step program to help you get your finances under control. Feedback has been excellent. Step four is going out this week to the old subscribers, but new subscribers get one email a week starting when they signed up. If you're subscribed to this newsletter, you already know all about it. But be sure to let your peers know about it and encourage them to sign-up for this email list. It's all free to you, thanks to the wonderful sponsors. 

Traditionally, November and December are the months when I really work hard on WCI stuff. Nobody ever wants me to come speak during those months, and they're the dud months for doing outdoor stuff. I'm almost embarrassed to tell you how many hours I put in to WCI stuff last month, but the words Live Like A Resident come to mind. This year's major project, aside from Financial Bootcamp, is an online course we expect to bring online early in January. It's going to be awesome. There are 12 modules and by the end of the course, students will not only be financially literate, but will be capable of writing their own financial plan. Whether you want to work with a financial advisor or not, this is the highest yield way I can think of for those who aren't personal finance hobbyists to learn what they must know to be financially successful. In November, I did all of the tests and most of the written material, slides, and scripts. Today, we start shooting the videos in our new video studio. This course isn't going to be cheap; it's our "premium product." But compared to hiring a financial advisor to teach you this stuff, it'll be a steal. WCI readers will be the first to hear about it and will be offered a special price for the first week or two it goes online. 

We also had a big focus on Twitter this month. Those tweets had 620,000 impressions, compared to 93,000 in November last year. 841 of you signed up to follow us on Twitter in November, an 18% increase in a single month. If you're not following us on Twitter or Facebook, you're really missing out on a lot of good stuff that doesn't show up on the blog, the forum, or the newsletter. I was featured on the Millionaires Unveiled podcast and also on the Growing Dermatologist podcast this month.

We also just ordered all the books for the swag bags at the Physician Wellness and Financial Literacy Conference. It is far and away the best swag bag I've ever received, seen, or heard of. We're looking forward to meeting many of you in Park City in March. Hopefully it starts snowing before then. One attendee suggested taking advantage of this deal. 

Market Report
Asset Class Proxy November Year to Date Last 12 Months
US Stocks VTSAX 3.04% 19.96% 22.28%
US Value Stocks VVIAX 3.53% 15.41% 18.45%
US Growth Stocks VIGAX 2.53% 26.88% 28.26%
US Small Value Stocks VSIAX 3.14% 11.25% 14.39%
US Small Growth Stocks VSGAX 3.02% 21.58% 22.36%
US REITs VGSLX 2.64% 5.17% 10.10%
US Microcap Stocks BRSIX 2.98% 12.23% 17.40%
International Stocks VTIAX 0.80% 24.97% 27.49%
Emerging Market Stocks VEMAX 0.19% 26.93% 26.73%
International Small Stocks VFSVX 1.06% 26.48% 28.23%
International REITs VGXRX 1.69% 22.56% 22.74%
Long-term Bonds VBLTX 0.51% 8.67% 9.46%
Short-term Bonds VBIRX -0.34% 1.13% 1.18%
Treasury Bonds VFITX -0.39% 1.50% 1.45%
Corporate Bonds VICSX -0.41% 4.94% 5.13%
TIPS VIPSX 0.08% 1.94% 1.77%
Money Market Funds VMMXX 0.10% 0.91% 0.97%
Intnl Bonds (hedged) VTABX 0.36% 2.36% 2.84%
Gold GLD 0.36% 10.48% 8.37%
Silver SLV -1.77% 2.65% -1.08%
Commodities GSG 1.29% 0.06% 5.09%

Years like this are the rewards for staying the course with your plan throughout bear markets. The only asset classes that lost money this month are short and intermediate bonds and silver. However, not a single asset class tracked by this newsletter is down year to date. Stocks continue their tear. What is particularly remarkable about it is just how steady and calm it has been.  We're setting all time records for number of days without a significant drop in the market. 20-30% annual returns are pretty awesome to those of us with a sizable portfolio, even if they seem boring and staid to bitcoin "investors," but more on that later. 

Best of the Blog

This month, some of the best stuff on the blog includes 4 Reasons You Need a Second Opinion. If you use a financial advisor and have never received a second opinion, it's time. It will likely be free and worst case scenario, you find out you have an awesome advisor already. We discussed our new post-mortgage budget this month as well. It's cool to have a budget without debt payments. Soon we may be able to get rid of life and disability insurance payments too. We had Continuing Financial Education week again this month. Our advanced read this year was about Factor Investing. If you're wondering why even Vanguard is coming out with "Factor ETFs", this post should help. My favorite guest post this month was 15 Ways To Make More Money As A Doctor by Wealthy Doc. 

Across the WCI Network we see Physician on Fire featuring "Ether to FI" talking about Obeying WCI's Ten Commandments. PoF wrote about how Financial Independence with Kids can be a little trickier. Passive Income MD wrote about The Not-So-Secret Society of Accredited Investors and 5 Reasons Why Doctors Should Have A Side Hustle. 

Best of the Web

Every month I recommend (about) ten articles from across the web. If you come across something you think would be worth sending out to thousands of your colleagues, feel free to send it my way. Yes, bloggers, you can send me your best stuff too as long as it is applicable for this audience. 
  1. The Problem of Doctor's Salaries Politico and a "progressive thinktank" think you're paid too much.
  2. Med Students Go To Texas to Ease Crushing Debt NPR quoted me in this one.
  3. Public Service Loan Forgiveness Another way to ease crushing student loan debt. Still looking for the first doctor to get forgiveness. Email me if you know him or her.
  4. When Doctor Contract Negotiations Go Bad Robert Feldberg argues it can actually be a good thing.
  5. The Source of Value Want something heavy? Here's Swedroe on why the value premium exists.
  6. Money Well-Wasted Worried you might be a miser? Here's a good article for you.
  7. Hidden Insurance Fees Ryan Inman shows you how to not get hosed by an insurance agent.
  8. Challenges of a Medical Marriage Don't let something like medicine ruin what really brings happiness.
  9. The Rot That Lies Beneath Some Index Funds Hint: Stick with Vanguard
  10. Swedish Death Cleaning Got too much stuff? Join the club. Guess what? Your kids don't want it.
  11. My Heisenberg Moment Want to get rid of your debt? Get mad.
  12. Why Do Doctors Who Hate Being Doctors Still Practice I'll give you one guess.
  13. Life is a Single Player Game Totally agree with The Happy Philosopher on this one.
  14. Vanguard Does Factors Excited about factor investing but don't want to pay an advisor for DFA/AQR? 
Great Stuff From the Forum

Forum participants tell me I don't plug the forum as much as I should. If you're looking for a high level discussion of a financial topic, or just trying to find a quick answer to a "dumb question," the forum is a wonderful resource. Now it is easier than ever to sign up (for free) to participate. It got a little heated this month with some discussion about the tax plans being debated in Congress, but we've toned that down a bit and everyone is back on their best behavior. Here's the best stuff from this last month:
  1. Any Other Scrooge McDoctors Here? Trouble loosening the purse strings for Christmas? Here's therapy!
  2. PSLF - How to Show Income An important question when your tax return shows a very different income from your pay stubs
  3. Should You Sell Stocks in Fear of an Upcoming Crash  Wish they would ring the bell at the top? Me too.
  4. How Much Umbrella Insurance Do You Need This thread was so good I was asked to write a blog post about it.
  5. Financial Advice As I Begin Medical School What do you wish you knew when you started?
New Podcasts

Be sure to check out the podcast if you haven't yet. It is rapidly approaching the blog as far as number of people reached by each episode/podcast. This month we started doing show notes with a transcript and publishing them on the blog. Here are this month's episodes:

#28 What Matters Most in Personal Finance (Sponsored by SoFi)
#29 Tax Reform Bill in Congress (Sponsored by SoFi)
#30 How to Invest at All Time Highs (Sponsored by Proassurance)

Guaranteed to improve your satisfaction with your commute!

New Videos

Okay, we dropped the ball here this month. We've got a bunch of videos to upload and we got to the end of the month and asked each other, "Hey, when are you going to upload those videos?" We'll get them up this month. Now that we have a little video studio, we'll be a lot more regular in this department. Subscribe here! 

Tip of the Month

This month I'm going to talk about exactly what every one else is talking about. You know what I mean- Bitcoin! This year, and particularly this last month, it has been fascinating to watch the speculative fever in Bitcoin. It was just last month that Bill Bernstein gave four reasons indicating why Bitcoin wasn't yet a classic bubble. His four criteria were:
  1. Not yet the subject of conversation at social gatherings
  2. People aren't quitting jobs to speculate in it
  3. Skeptics aren't yet met with anger
  4. No extreme price projections
Well, in the last month since he said that, I've seen evidence of at least three of those four criteria, and I think the only reason nobody has quit their job yet is due to the sheer speed of this bubble. What took several years for Tulip Mania to do has occurred in a matter of weeks with Bitcoin. There are all kinds of Bitcoin millionaires out there now and the Fear of Missing Out (FOMO) has become palpable. 

I sit on the sidelines and observe with fascination. I've been reading about speculative bubbles in financial history books for years, but this is really the first one I've had personal experience with during my investing career, unless you count that silliness with real estate back in 2008 or so. Bitcoin has gone from something that only true aficionados know about, to something regularly discussed by those on financial forums, and now to something that is in the newspaper each day and discussed in social situations. In fact, just this week there were more requests for online quotes for Bitcoin than the Dow Jones Industrial Average and people have been searching for "How to invest in Bitcoin" more than "How to invest in gold" for a couple of months. I can't help but be reminded of Joe Kennedy's quote from 1928, "You know it's time to sell when shoeshine boys give you stock tips." 

Four years ago I wrote an article about Bitcoin, essentially warning readers not to jump in to a speculative instrument after a recent run-up. Over the next year, it dropped in value by over 75%. It took two more years to recover to that previous high. However, since that time a year ago, it has gone up 1000%. I can't help but feel that I've seen this movie before and I know how it ends. I don't know WHEN it ends, but I do know HOW it ends. 

As you look at that chart on the right of a "classic bubble", where do you think we are at? I think it's pretty clear we're in the "public/mania" phase, probably somewhere around "greed." Is it going to keep going up for a while? Probably. Is it going to come down hard at some point? Almost surely. What is the baseline for Bitcoin where it will eventually come to rest? I have no idea, but here's something to think about. When was the last time you had an asset go up in price 1000% in a year? What happened to it the next year? Did it go up another 1000%? Probably not. Don't let greed and fear of missing out tempt you into doing something stupid, no matter how many of your friends have become Bitcoin millionaires this year. 

What does your written financial plan say about Bitcoin? I suspect it doesn't even mention it. Mine doesn't either. That's why I haven't bought any. As a high-income professional, the performance of Bitcoin has no effect whatsoever on my financial goals. I do not need to know what is going to happen to Bitcoin in the future to be successful. As Warren Buffett has said, "There are no called strikes in investing." You don't have to swing at every pitch. You can afford to just sit there and watch, investing in the same old boring stuff that only goes up 25% in a particularly good year and only falls 25% in a particularly bad year, rather than moving 25% in a single day. I prefer to invest in profitable businesses. You know, the kinds that actually have profits and employees. The kinds that even if the value of a company's stock falls dramatically or the stock market closes still make money for their owners. Although there is a speculative aspect to any investment, I prefer not to invest in things that are purely or even mostly speculative. I don't invest in regular currencies or precious metals, why would I invest in cryptocurrencies? As Thoreau said, "A man is rich in proportion to the number of things which he can afford to let alone."

Now, blockchain technology may change the world in ways similar to the internet. I have no idea. But I also have no idea whether Bitcoin is Google or whether it is Ask Jeeves or Netscape. As you recall, an investment in Netscape didn't work out so well. 

So again, like four years ago, I give you a warning. If you must speculate in Bitcoin, do so with a very limited portion of your portfolio. If you make a killing, you can rub it in my face. I don't mind and I will congratulate you on your success. But at least when it has a massive drop in value and most of those currently speculating are flushed out of the market, it won't affect your career and life plans. Do I think it will go to zero? Probably not any time soon. But when something is so volatile that its value changes by 1000% in a year, it is also highly likely to also suffer 75-90% downturns. Volatility works both ways. Trees don't grow to the sky and this seems awfully similar to Tulip Mania, the South Seas bubble, and dozens and dozens of other speculative bubbles we read about in history books. Caveat emptor!

I hope you're finding the newsletter and site helpful. Email me corrections, suggestions, or other feedback and please forward it to your colleagues. Someone forward this to you? Sign up to get the next one all to yourself. It's free and I won't spam you. Check out the forum, buy the book, listen to the podcast, subscribe on YouTube, follow us on Twitter, and like us on Facebook! Everywhere to serve you, for free. 


James M. Dahle, MD, FACEP
The White Coat Investor
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