"Mamas, don't let your babies grow up to be doctors . . . "

Justin here. I found this nugget today in a Financial Planning article on serving clients in the medical field.

" . . . a recent survey of 3,016 physicians by healthcare consulting firm Merritt, Hawkins & Associates found that roughly 40% of doctors would not choose to enter the medical profession if they were deciding on a career again, up from less than 15% two decades ago. An even larger percentage would actively steer their children away from the medical field as a possible career choice."

If any of these doctors want to get out while they still can, author Frederick Buechner gives some great advice on finding the right vocation in Wishful Thinking, A Seeker's ABC.

Vocation - It comes from the Latin vocare, to call, and means the work a person is called to by God.

. . . By and large a good rule for finding out is this: the kind of work [you should do] is the kind of work (a) that you need most to do and (b) that the world most needs to have done. If you really get a kick out of your work, you've presumably met requirement (a), but if your work is writing cigarette ads, the chances are you've missed requirement (b). On the other hand, if your work is being a doctor in a leper colony, you have probably met requirement (b), but if most of the time you're bored or depressed by it, the chances are you have not only bypassed (a), but probably aren't helping your patients much either.

[Your vocation should be] the place where your deep gladness and the world's deep hunger meet.

My translation: "It's more than money."

Fighting ShortTermism

Here's a great little piece from the WSJ today, Don't Give Up on That Fund - Not Yet.

. . . the study, conducted by Baird Advisory Services Research, looked at more than 1,300 funds, defining "high performers" as those that topped their benchmark by one percentage point annually over the 10 years ended in 2007. About 505 funds qualified.

The key finding was that many of these top funds went through periods where they got killed by the market or their peer group. More than three-quarters of these high achievers had at least one three-year stretch where the fund lagged behind its benchmark by one percentage point or more. More than half of the funds experienced benchmark underperformance of three percentage points or more, and nearly one-third of them lagged behind by five percentage points or more in a three-year period.

Despite those bouts of underperformance, the funds were able to be superior achievers over the full 10-year window.

Tim Byrne, director of Baird's Private Wealth Management Research, Products and Services, said the moral of the study is that even the best money managers have periods where they don't look so good, but the longer an investor sticks with them the better the chances for success, for high performance over time.

"The problem is that people buy a fund after the manager has proven that they are a high performer, but they sell the first time there's a problem," Mr. Byrne said. "They wind up chasing performance -- buying high and selling low -- instead of sticking with a manager who has proven that they can deliver if you give them enough time."

Mr. Market goes alligator watching

A quick check on AAII’s sentiment survey reading for July 31 showed bullish sentiment rose to 40%, from 35.8% on July 24 and bearish sentiment fell to 41% from 44%. Not surprising, our Anxiety Index went down. Just two weeks ago, bullish sentiment was a lot less and bearish sentiment was a lot more than average. Can a normal investor make sense of this sudden shift?

Well, Mr. Market is not a normal investor but he surely is helpful. For instance, on a recent tour boat trip down the Florida Everglades, Mr. Market heard a thrashing sound in the waters. Curious fellow that he is, he got up from his seat and ambled over to the railing. The sight of a 3,000 point alligator (aka meat grinder) sniffing around for dinner got Mr. Market all worked up, which happens every so often. He got so excited and made such a fuss that all the other passengers jumped out of their seats and hurried over to the other side to see what all the excitement was about.

Now, let's think for a minute. Hearing all the hubbub and seeing 100 passengers going to the other side of the boat and leaning over the railing to get a good look at whatever it was that Mr. Market was enthralled over, would you grab your digital camera and say to your spouse, "Honey, I'm gonna get me a picture of that alligator if that’s the last thing I do!"

Or would you keep your seat and your cool, ignore the crowd, and locate the nearest life preserver storage box and lifeboat?

Click this not-so-exciting chart to open a larger not-so-exciting chart -

The greatest story never told

The center stages of the world are crowded - "Just a short time ago, says Patrick J. O'Hare of Briefing.com, "there was a fear of owning financial stocks. Now there is a fear of not owning them." These are times when whatever good numbers get published or whatever progress we make towards correcting the policies and practices that led to our excesses and the mess we’re now in, the markets could care less.

Patrick Toomey is president of The Club for Growth. A graduate of Harvard University with a degree in government, he served as a member of the U.S. House of Representatives from Pennsylvania’s 15th Congressional district from 1999-2005. In 2005, he co-founded Team Capital Bank, and is co-chair of its board of directors. He also sits on the boards of directors of the Lynde and Harry Bradley Foundation and the Commonwealth Foundation. Recently, Toomey spoke at Hillsdale College. He says we need to start telling this story, and also to think about its causes. An introduction follows -

“The fact of the matter is that we in the United States, and to a lesser degree the entire world, have just lived through---and continue to live in---the greatest period of prosperity in human history. Over the last 25 years, more wealth has been created, more people have been lifted out of poverty, standards of living have been elevated more dramatically, and the quality and length of life have improved, more than ever before in recorded history. Unfortunately, as Larry Kudlow says, this is "the greatest story never told." Click here the read Toomy's speech.

Market sentiment and anxiety 07172008

The AAII sentiment survey (membership required) measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market short term; individuals are polled from the AAII Web site on a weekly basis. Only one vote per member is accepted in each weekly voting period.

For the week ending July 16, bullish sentiment rose to 25.00% from 22.17%, equal to 1.29 standard deviations below the mean. Bearish sentiment rose to 58.14%, equal to 2.9 standard deviations above the mean. Anxiety Index rose from -11.9% to -8.8%, equal to 0.47 standard deviations below the mean. Click chart to resize.

Market sentiment and anxiety 07102008

The AAII sentiment survey (membership required) measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market short term; individuals are polled from the AAII Web site on a weekly basis. Only one vote per member is accepted in each weekly voting period.

Sentiment data is displayed along with a proprietary anxiety index. The chart above includes something that the AAII version doesn’t. Click chart to resize.

At every date along the X Axis of this chart, you can see what the S&P500 did one year out from that date. For example, if you put your finger on the X axis on October 19, 1990, for example, and then moved your finger up to where the S&P500 intersects with that date, you’ll see that the S&P500, in the 12 months following, was up 26%. During the last 21 years there have been 14 or so occurrences where negative sentiment outweighed positive sentiment, and by a pretty big margin. (Resize chart by clicking and dragging handles.)

Couldn't help noticing Tuesday David Tice agreed to sell his David W. Tice & Associates investment management firm to Federated Investors Inc. for up to $142.5 million. Is this this pure coincidence or did Tice decide bearish sentiment was high enough (and bullish sentiment low enough) to sell out? Tice, who founded the Prudent Bear and Global Income Fund in 1995, will remain with Federated Investors. The purchase price, if certain conditions are met, could be 8.53% of assets under management. Is that a record? Guess Tice knows how to run a Bear fund, and a thing or two besides.