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The Complete Series Of Everyone Needs A Little Radiologist In Them:

• Mental Checklist.
• Part I.
• Part II.
• Part III.
• Part IV.
• Part V.
• Part VI.

 

So here are more of the concepts I have gleamed from being a radiologist/physician and how I apply them in my everyday/financial world

 

 

 

 

 

Radiology Concept #17

This, too, shall pass.

 

 

There are some days at work where everything that can happen does.

A combination of difficult cases and high volume can often do me in.

This is definitely not exclusively in the realm of radiology but can apply to all fields of medicine (or any occupation for that matter).

When I am having one of those type of days, I know that it will eventually pass.

I have to weather the storm but in the end I know that there is a just a finite amount of time I have to endure it before I am free to go back home.

 

Financial Take:

When things are looking bleak in the markets avoid knee-jerk reactions to sell/panic.

Building wealth is a long-term play and it is wise to tune out the background noise of short-term volatility.

Knowing in the back of your mind that historical data has always shown an upward trend in market value is akin to me knowing that at 5 pm I can put the troubles of the day behind me.

 

 

Radiology Concept #18

Protection

 

 

Practicing medicine carries with it financial risk.

Sometimes everything can be done to the standards of care yet a bad outcome is still the result.

With doctors being viewed as individuals with “deep pockets,” there is a never-ending supply of lawyers who would like to make those pockets just a little shallower.

Malpractice insurance is a must for any practicing physician as the odds are against you of going through an entire medical career without being subjected to a malpractice suit.

Besides lawyers, a physician has to also protect his or her income stream (especially during the early stages before reaching financial independence) from unexpected issues concerning health.

Disability insurance is again highly advised for early career physicians and can be eliminated once you reach financial independence.

 

Financial Take:

Just like protecting against unexpected catastrophic events in one’s occupational world, it is important to insure against similar type events in the personal world.

 

 

Life insurance, home insurance, umbrella insurance, auto insurance, and health insurance are worthwhile protections against potentially financially devastating events.

Skimping on insurance coverage to save a few dollars can end up costing several magnitudes more if you are one of the unfortunate ones where it would have been beneficial to have.

 

 

Radiology Concept #19

Recency Bias

 

 

It happens without fail.

A study ordered from the walk-in clinic, etc turns out to have a significant/life threatening positive finding such as a pulmonary embolism or deep venous thrombosis (DVT).

Over the next several weeks there will be a larger influx of these same type studies ordered from that service (typically all negative).

I believe it is the phenomena of recency bias at play.

After one patient is proven to have a life threatening diagnosis, it becomes almost reflexive to make sure other patients seen later do not have a similar condition.

 

Financial Take:

Recency bias in investing is one of the basic underlying causes of the various bubbles in the market we have throughout history.

As more and more people rush to invest in the “hot sector or stock,” the prices begin to artificially inflate beyond the inherent or book value of that asset.

After awhile there will be a tipping point and a selloff ensues resulting in a dramatic collapse in value.

 

 

This signifies the bursting of the bubble with those who have fallen prey to recency bias which typically causes buying at the very top of the bubble, are left holding the bag.

 

 

Radiology Concept #20

Primum non nocere:  “First, To Do No Harm”

 

 

As part of tradition, the first words uttered out of a newly minted physician at medical school graduation is reciting the Hippocratic Oath.

There is a phrase in the Hippocratic Oath that has a similar intent which when translated from its Greek origin states, “To Abstain From Doing Harm.”

The underlying principal is for a physician to analyze each and every situation in the treatment of a patient and then decide if the methods of treatment end up harming the patient more than the benefit obtained.

Sometimes doing nothing is the right course of action over an intervention likely to cause more harm than good.

 

Financial Take:

It is a very typical mindset, especially dealing the type A personalities found in the physician population, that “we need to be doing something.”

I have had several friends/colleagues that have told me that they do not like investing in index funds because, “it is so boring!”

I try to tell them the benefits of passive index fund investing but it seems to fall on deaf ears.

 

 

One very intelligent friend of mine went on to say that he seeks the thrill of day trading trying to game the system even in his retirement vehicles.

Despite evidence to the contrary, because of this need to be an active participant requiring constant interventions to his portfolio, the most likely scenario is that he is going to do harm to his overall financial outlook.

Apart from the associated costs of this frequent trading (transaction fees, short term capital gains (versus the more favorable long term capital gains tax rate), and the time commitment (opportunity cost) to become “knowledgeable” enough to make informed trading decisions) is the risk that all this effort will be for naught if it does not keep pace with the gains from passive investing.

Call me a lazy boring investor but I feel my inaction sets me up for a better chance at financial gains as I will likely do no harm to my portfolio in the long run.

One wrong bet by my friend can derail all the times he was lucky to have chosen right.

That is a risk I am not willing to take no matter how boring I will appear to be.

 

 

 

Please stay tuned for subsequent installments in this multi-part series.

 

 

Note:

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-Xrayvsn