Predicting is always fun. On January 26, 2015 I enjoyed this story:
(Bloomberg) — Oil prices will probably continue to decline and could reach as low as $30 a barrel, according to Gary Cohn, president of Goldman Sachs Group Inc.
“We’re probably in the lower, longer view,” Cohn, a former oil trader, said Monday in an interview with CNBC.
West Texas Intermediate for March delivery fell 44 cents to close at $45.15 a barrel on the New York Mercantile Exchange, the lowest settlement since March 11, 2009.
This morning Business Insider reported:
Crude oil trades at a 5-month high. West Texas Intermediate crude oil is higher by 2.4% at $61.87 a barrel, threatening the $62 mark for the first time since December. The energy component has rallied approximately 35% off the March lows.
As if that prediction wasn’t bad enough, I read this morning:
Goldman Sachs says buy the US dollar. Analysts at the investment bank believe the dollar will most likely gain 18% against the euro to 95 cents and 8% against the yen to 130 over the next 12 months. The dollar’s rebound will be fueled by strong second-quarter growth after a relatively flat first quarter.
Here’s my bold prediction: One day Goldman Sachs will get one of their many predictions right. The law of averages will kick in some time.
Meantime, I feel miserable. Yesterday was awful. My portfolios were down close to $100,000. That’s a big hit for one day. Last time that happened, the markets came roaring back the following day. Today? Who knows?
My “big” dollar loser yesterday was Apple — because I own so much of it. This is yesterday:
It’s been up and down — faster than a whore’s drawers (Australian expression) — in recent days. This is it over the past ten days.
Meanwhile, I wish Greece and the Eurozone would get off the potty and do something. Endless uncertainty is awful for stockmarkets. This morning Business Insider tells me:
Most German business executives favor a Grexit. A survey conducted by the German business newspaper Handelsblatt showed 44% of those surveyed believe Greece should leave the euro on its own accord, and another 13% were in favor of ejecting Greece from the euro. Almost 80% of respondents think a Greek exit from the euro would not lead to contagion. Greece’s two-year yield is higher by 81 basis points at 21.36%.
You must read this:
Atul’s brilliant article in this week’s New Yorker begins:
It was lunchtime before my afternoon surgery clinic, which meant that I was at my desk, eating a ham-and-cheese sandwich and clicking through medical articles. Among those which caught my eye: a British case report on the first 3-D-printed hip implanted in a human being, a Canadian analysis of the rising volume of emergency-room visits by children who have ingested magnets, and a Colorado study finding that the percentage of fatal motor-vehicle accidents involving marijuana had doubled since its commercial distribution became legal. The one that got me thinking, however, was a study of more than a million Medicare patients. It suggested that a huge proportion had received care that was simply a waste.
To me, the article spoke (once again) Check. Check. Check.
Remember Tom and Ray Magliozzi of “Car Talk” fame? Atul writes:
What Ray recommended to his car-owning listeners was the approach that he adopted as a patient—caveat emptor. He did his research. He made informed choices. He tried to be a virtuous patient.
The virtuous patient is up against long odds, however. One major problem is what economists call information asymmetry. In 1963, Kenneth Arrow, who went on to win the Nobel Prize in Economics, demonstrated the severe disadvantages that buyers have when they know less about a good than the seller does. His prime example was health care. Doctors generally know more about the value of a given medical treatment than patients, who have little ability to determine the quality of the advice they are getting. Doctors, therefore, are in a powerful position. We can recommend care of little or no value because it enhances our incomes, because it’s our habit, or because we genuinely but incorrectly believe in it, and patients will tend to follow our recommendations.
Another powerful force toward unnecessary care emerged years after Arrow’s paper: the phenomenon of overtesting, which is a by-product of all the new technologies we have for peering into the human body. It has been hard for patients and doctors to recognize that tests and scans can be harmful. Why not take a look and see if anything is abnormal? People are discovering why not. The United States is a country of three hundred million people who annually undergo around fifteen million nuclear medicine scans, a hundred million CT and MRI scans, and almost ten billion laboratory tests. Often, these are fishing expeditions, and since no one is perfectly normal you tend to find a lot of fish. If you look closely and often enough, almost everyone will have a little nodule that can’t be completely explained, a lab result that is a bit off, a heart tracing that doesn’t look quite right.
Excessive testing is a problem for a number of reasons. For one thing, some diagnostic studies are harmful in themselves—we’re doing so many CT scans and other forms of imaging that rely on radiation that they are believed to be increasing the population’s cancer rates. These direct risks are often greater than we account for.
What’s more, the value of any test depends on how likely you are to be having a significant problem in the first place. If you have crushing chest pain and shortness of breath, you start with a high likelihood of having a serious heart condition, and an electrocardiogram has significant value. A heart tracing that doesn’t look quite right usually means trouble. But, if you have no signs or symptoms of heart trouble, an electrocardiogram adds no useful information; a heart tracing that doesn’t look quite right is mostly noise. Experts recommend against doing electrocardiograms on healthy people, but millions are done each year, anyway.
Resolving the uncertainty of non-normal results can lead to procedures that have costs of their own. You get an EKG. The heart tracing is not completely normal, and a follow-up procedure is recommended. Perhaps it’s a twenty-four-hour heart-rhythm monitor or an echocardiogram or a stress test or a cardiac catheterization; perhaps you end up with all of them before everyone is assured that everything is all right. Meanwhile, we’ve added thousands of dollars in costs and, sometimes, physical risks, not to mention worry and days of missed work.
Overtesting has also created a new, unanticipated problem: overdiagnosis. This isn’t misdiagnosis—the erroneous diagnosis of a disease. This is the correct diagnosis of a disease that is never going to bother you in your lifetime. We’ve long assumed that if we screen a healthy population for diseases like cancer or coronary-artery disease, and catch those diseases early, we’ll be able to treat them before they get dangerously advanced, and save lives in large numbers. But it hasn’t turned out that way. For instance, cancer screening with mammography, ultrasound, and blood testing has dramatically increased the detection of breast, thyroid, and prostate cancer during the past quarter century. We’re treating hundreds of thousands more people each year for these diseases than we ever have. Yet only a tiny reduction in death, if any, has resulted.
My own story: I hurt my shoulder playing tennis (what else?). I was prescribed X-Rays and cat-scans, and surgery. I opted for BN (medical term for benign neglect). I kept playing, but I gave up serving and hitting overheads for a year. After a year I tried serving. I couldn’t serve as fast as before. But I could serve and it didn’t hurt. The body often heals itself.
I’m not going to quote any more from the New Yorker article. Suffice, everyone should read Atul Gawande’s entire piece. Don’t think I’m being crazy. Gawande is a respected doctor and best-selling book author. For the full New Yorker article, click here.
Carly’s high name recognition
WASHINGTON (The Borowitz Report)-One day after the former Hewlett-Packard C.E.O. Carly Fiorina announced her candidacy for the 2016 Republican Presidential nomination, a new poll shows that she enjoys extremely high name recognition among the tens of thousands of former H.P. employees she fired.
According to the poll, conducted by the University of Minnesota’s Opinion Research Institute, Fiorina’s name recognition stands at a hundred per cent among the legions of employees she terminated, with many of them calling the former C.E.O. “unforgettable.”
Additionally, a broad majority of the laid-off workers described their feelings about Fiorina as “intense,” and noted that very few days go by when they do not invoke her name in a vehement manner.
Davis Logsdon, who supervised the survey for the University of Minnesota, said that Fiorina’s entry into the Republican race had “energized” many former H.P. employees.
“Most of them were apathetic about the race before, but now they are very excited to see how it plays out for Carly Fiorina,” he said.
Impressively, Fiorina’s hundred-per-cent name recognition among fired H.P. employees ranks her ahead of other names mentioned in the survey, such as Darth Vader (ninety-nine per cent) and Satan (ninety-seven per cent).
Harry Newton, who’s not predicting his stocks, but is eyeing stop losses and obeying them if the stock itself looks “iffy.” After David Einhorn came on CNBC yesterday to tear on fracking companies, I sold a little of EOG short. I bet it will go up this morning. There’s a lesson here somewhere.
