Preexisting Condition and the Cost of Prescription Drugs

Harold Black, PhDBlog

In this very strange political season pollsters tell us that the most important concerns of the electorate are immigration and healthcare. When I saw that healthcare was a concern, I thought that it meant poor outcomes, or poor access, or lack of services, inadequate care or improper diagnoses and medications. But no. The concerns were not with healthcare but rather with health insurance. Obamacare (the “Affordable” Care Act) mandated that everyone purchase health insurance. The result was a decrease in the number of uninsured from 44 million to around 28 million. Obamacare lead to predictable results: a lessening of choice … Read More

Fine Print is Not So Fine

David MoonBlog

A couple recently invested $100,000 into an annuity that, among other fantastic features, is guaranteed to at least double in value over ten years, at which point the annuity would provide a 5% income stream for the husband’s life. That is, ten years from now the couple expects that their initial $100,000 investment would begin producing annual income of $10,000. (Five percent of $200,000, the guaranteed doubling of the original investment.) Except there is no guarantee that their investment will double in value. Nor will there be $10,000 in annual income. Instead, the investment may be worth as little as … Read More

Trump exposes tax system flaws

David MoonBlog

Depending on one’s political inclinations, the recent New York Times analysis of Donald Trump’s father’s estate planning was an example of either massive personal corruption or a well-executed plan. The Times estimates that Fred Trump’s use of “tricks” allowed him to avoid $500 million in estate and gift taxes, while transferring more than a billion dollars of assets to his children. Regardless of your opinion of the president, the biggest takeaway from Fred Trump’s estate and wealth planning is that our tax system is a needlessly complex farce. The elder Trump established shell companies to funnel money to his children’s … Read More

Mistaken Investment Myths

David MoonBlog

A client recently asked about an article that recommended that the percentage of a person’s investments that should be invested in stocks or stock mutual funds is the person’s age subtracted from the number 100. A 60-year-old should, according to this rule of thumb, have 40% of his assets invested in stocks. A 20-year-old would have 80% of her money in stocks. Most people’s needs change throughout their lives, but everyone’s situation is unique. Subtracting your age from 100 is a silly investment strategy. The same can be said of many widely held investment myths. Here are a few. Stocks … Read More

Gender or marriage wage gap?

David MoonBlog

A new California law requires the state’s public companies to have at least one female member on the board of directors and to have up three female directors by 2021. It will be interesting to see how courts react to the measure. It will also be interesting to see how California reconciles this new law with the state’s law allowing people to choose the gender listed on their state-issued IDs. If a company were so inclined, it seems that it could comply with the new law simply by several of its existing male board members declaring that they are female. … Read More

Investors Punt Logical Decisions

David MoonBlog

Facing a first quarter 4th down against Florida, Tennessee head football coach Jeremy Pruitt chose to go for the first down. The Volunteers’ pass fell incomplete, giving the ball to the Gators. On the next play, Tennessee recovered a Florida fumble, rendering the failed 4th down attempt meaningless and resulting in a Tennessee field goal. I don’t have space to explain it, but trust me; the odds almost always favor going for it. Coaches should almost never punt. Two good studies are here (NFL study)  and here (NCAA study.)  It’s fascinating reading for football fans. Football coaches reject the statistically superior strategy … Read More


David MoonBlog

When a photo of an actor from the old Cosby Show (a show that is, disturbingly, still on the air) bagging groceries in a New Jersey supermarket began floating around the web recently, I was reminded of recent research suggesting that increases in happiness can be caused by increases in wealth. For years, researchers have studied the relationship between financial and emotional well-being. Is happiness a mindset to be cultivated or a condition that money can suddenly impose? While a number of studies found a positive correlation between income/wealth and reported happiness, none had concluded if there was a causal … Read More

Battle for the Sole of America

David MoonBlog

In 2017, Nike announced a corporate realignment that included a focus on customers in 12 key cities: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan. In a June 2017 press release, the company said it expects these cities to produce 80% of Nike’s growth through 2020. My rural hometown of Hazel Green, Alabama, where I suspect kneeling for the national anthem is a code-red offense, did not make Nike’s city-focus list. In a brilliant marketing move, Nike’s latest ad campaign received hundreds of millions of dollars in free publicity, offending people who, … Read More

Rule reversal reveals broker incentives

David MoonBlog

With layers of obfuscated fees, needlessly complex products, self-dealing and other conflicts of interest, the investment industry goes to great lengths to make it difficult for investors to meaningfully understand the relationship between themselves, their adviser and their money. As a result, it is often difficult to readily determine if an adviser is working to maximize his wealth or that of his client. One behemoth Wall Street firm recently revealed much of the industry’s priorities when it reversed a 23-month old policy prohibiting charging commissions in retirement accounts. In anticipation of a Department of Labor (DOL) regulation that would require … Read More

NCAA is immoral

David MoonBlog

Thirteen University of North Carolina football players were suspended from the team’s season opener for the unpardonable NCAA sin of selling shoes. These special shoes were given to UNC, and then the players, as part of a $37 million dollar contract between Nike and the school. Selling shoes doesn’t harm a soul or provide UNC a competitive advantage over any of its opponents. UNC is the same institution of higher education that admitted 18 years of academic fraud among its athletes, including fake classes that required no attendance in order to receive a passing grade and maintain eligibility. The NCAA … Read More