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The Independent Investor: Snap, Crackle and Pop
By Bill Schmick On: 02:44PM / Thursday February 28, 2013
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Chiropractors are seeing more patients than ever and that trend is expected to continue as Baby Boomers grow older. The popularity of alternative medicines and Americans newly-found caution towards pain killers only increase the demand. But the real question is can the industry get paid for it?

By 2016, the chiropractic industry is forecast to reach $14.8 billion in revenues. Those sales are divided among 142,000 to 143,000 chiropractors practicing in America today. That number is growing slowly even though the healthcare industry overall continues to grow far faster. The slower growth can be explained by a number of trends that have turned out to be a two-edged sword for the industry.

As I mentioned, the graying of America has been one trend that has filled the offices of many chiropractors around the nation. To be fair, my headline is misleading since the days of forcing someone's body into contorted positions and inducing a snap, crackle or pop are long gone. I, for one, have been going to chiropractors for years ever since injuring my back during a rocket attack in Vietnam. Sharing the waiting rooms with me and my disc issues, have been an increasing array of patients suffering a diverse list of common ailments. Neck pain from whiplash injuries, scoliosis, hip and knee problems and carpal tunnel syndrome are only some of the aches and pains that afflicts all of us oldsters (and many youngsters as well).

Unfortunately, most of these conditions cannot be resolved by surgery nor will they disappear forever once treated. I have herniated discs and for me this is a chronic condition. Although that's bad for me, it's good for the chiropractic business, or could be if it weren’t for the limitations placed on chiropractic visits by most medical insurance companies.

Most plans limit chiropractic visits to 12 sessions a year. I can go through that many visits in one month if I throw out my back severely, which can happen once or twice a year. After that, I pay out of pocket. Most people can't afford that.

Although chiropractic care is gaining acceptance among more and more health-care providers, it wasn't always that way. There was a time in the not too recent past when most medical professionals wrote chiropractors off as quacks or charlatans. The insurance companies, following that lead, made it extremely difficult for chiropractors to be reimbursed for their services.

The passage of the Patient Protection and Affordability Act in 2010 (Obamacare) is expected to improve the position of chiropractors among health insurance providers. The act makes it illegal for insurance companies to discriminate against chiropractors and other providers, relative to their participation and coverage in health plans.

That may be good news, but like other medical practitioners, chiropractors are faced with shrinking reimbursements, while at the same time their regulation and insurance costs are skyrocketing. Another hindrance to the growth of the profession is its position as an alternative medicine and not a primary form of healthcare.

Yet the well-documented shrinking in the numbers of general practitioners in America has also bolstered the demand for chiropractors as an alternative primary care physician.

"People often say they would rather come to us first before going to their doctor," says Ron Piazza, owner of Berkshire Family Chiropractor in Pittsfield and a practicing chiropractor since 1985.

He has a point. In my experience, it usually requires one to two months before I can get a visit with my GP. If there is an emergency, my alternative is the hospital emergency room. But I can get in to see my chiropractor on the day I call, if it is an emergency or a day or two if it is not. I know that whatever ails me, he will have a lot more expertise in guiding me in the right direction.

"More and more, we are being considered the first line of defense by our patients," Piazza explains. "Simply because there is nowhere else to go except the emergency room."

That makes a lot more sense when one realizes that the education required to become a chiropractor is not that much different than that required of a medical doctor. It is a four-year curriculum after college including residency whereas, in general, an MD requires six years, although two of those years are in residency.

From a personal point of view, I can expect to hurt myself at the gym or snow shoeing or cross country skiing or something else at least once or twice a year. The older I get, the less likely that my body can rebound on its own. I have a strong aversion to taking drugs and have found that a chiropractor performs for me the same function an auto mechanic provides for my car. In fact, I'm going for a tune-up tonight.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

 



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The Independent Investor: Vocational Schools — A Youthful Answer to Unemployment
By Bill Schmick On: 04:24PM / Thursday February 21, 2013
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If you think a 7.8 percent unemployment rate in this country is terrible, ask an unemployed 18-year-old how their job search is going.

I'll tell you, not well. Today, unemployed workers between the ages of 16 and 19 years old have an unemployment rate of more than 23 percent, according to the Bureau of Labor Statistics. That number falls to 20.9 percent among white kids and explodes to 39.3 percent for African-American youths. The dismal fact is that for America's young adults unemployment is 30 percent higher than the national average.

Youth unemployment is worse than at any time since the Great Depression and will remain stubbornly high largely because the young lack the experience and skills of older workers. So if you believe, like I do, that young people represent the future of this country, something better be done to turn these numbers around and pronto.

In my last column, I wrote that trade/vocational schools were making a comeback. And as this century picks up speed the demand for skilled workers in a variety of high-paying, blue-collar areas is going to accelerate. For many of today's unemployed youth, vocational training should be a no-brainer. Here's why.

Vocational training requires less time to complete than a college degree since most postsecondary vocational degrees can be had in two years. Unlike your college-educated brethren, you will have readily employable skills, therefore you can be working and earning money in as little as 24 months while many college grads will still be searching for a job. And you will do so without an enormous educational debt burden that most college grads will be required to pay down over the next 15-20 years.

But the future of vocational training, in my opinion, must do more. It must reach backward into our high school system. That's where the student's technical training should start. Let's face it, not everyone should go to college, nor do they want to. Yet, for the most part, our educational system is geared for that single objective. That is a big mistake.

Some students, maybe a lot of students, won't be attending college. What about them? Given the high cost of a college education today, many lower and middle income students already know they can't afford college. So why, they ask, should they even remain in a high school dedicated to preparing them for a college they will never attend?

I say bring back shop classes. Why not allow those students to spend at least half their time in a trade area, alternating a full week of career education and a week of academics?

What about trying a Swiss or Netherlands-style vocational education approach? In their systems, students in their last two-years of high school have the option of participating in a structured workplace apprenticeship, making money some of the week while spending the rest of the time in the classroom. That might explain why the Swiss unemployment rate among youths is only 5 percent.

Consider that in the Massachusetts' vocational technical high schools the dropout rate is half the rate of those at comprehensive high schools, according to a recent study by Pioneer Institute, a Boston-based research firm.

Why? Students, who are given a choice between preparing for college (the comprehensive approach) or preparing to learn a skill or trade, feel they have more control of the future. In addition, the academic and applied learning environment in mastering a vocation of their choice tends to keep the student's attention and reinforce their commitment.

Finally, the more a student can apprentice while in the classroom the better. Apprenticeships, in combination with academic education, will improve the transition from schools to careers and higher paying jobs. It can upgrade skills and fine tune them to the needs of our nation's companies. I say urge our nation's businesses to return to the apprenticeship and training model. It worked well in this country for decades and works splendidly today in Germany, Austria and other European countries.

President Obama, in his State of the Union address, appears to recognize the need for a change of direction in how we are educating and training our youth for the challenges ahead. I say he is on the right track. What do you say?

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


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@theMarket: Inch by inch
By Bill Schmick On: 09:07AM / Saturday February 16, 2013
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Markets continue to grind higher with several averages, like the small and mid-cap indexes, hitting record highs. What little profit-taking occurs is met by buyers anxious to get into the market. I suspect this stage will continue for a bit longer.
 
We are only 3 percent away from the historic highs of the S&P 500 Index at 1,565. That magic number is acting like a magnet to bullish investors who argue there is no reason we shouldn't at least reach that number before giving some back. Seasonally, the first quarter is also kind to the stock market. All in all, enjoy the run and stay invested.
 
This weekend, the G20 group of finance ministers and central bankers will meet in Moscow. There was a time not long ago when investors would be holding their breath in anticipation of some new pronouncement involving the EU and Greece in particular. It appears those days are behind us.
 
The press has been playing up the risk of a currency war erupting between some nations, specifically those who make up the G7 countries. Where have they been? The devaluation of currencies has been going on ever since 2009. The U.S. dollar has been dropping against most currencies now for well over a year. The yen has plummeted 20 percent since November while the Euro has also lost value on various occasions.
 
This week the G7 countries — the U.S., Japan, Germany, Great Britain, France, Canada and Italy — issued a joint communique stating that domestic economic policies must not be used to target currencies. But every central banker will argue that most, if not all, of their nation's currency moves have simply been a side effect of their domestic policy. They argue that their stimulus policies have been targeting domestic growth, not a weaker currency.
 
Take our own Federal Reserve; it is on its third such stimulus program. It is true that the Fed's main objective is reducing unemployment by growing the economy. And both the Fed and the U.S. Treasury have been careful to publically insist on a strong dollar policy. But the facts are that the dollar has weakened and continues to do so in the face of our latest quantitative easing strategy.
 
A weak dollar helps our exports by making our goods cheaper to buy for overseas consumers.  Strong exports equate to higher domestic growth. And over the last two years our economy needed those export gains badly.
 
In Japan, the same thing is happening. Its newly elected government has taken a page out of our book. After years of stagnation, Japan is attempting to stimulate their economy by easing monetary policy. That has driven the yen much lower, which will help grow Japanese exports. The Germans are miffed by that strategy and have been complaining. Yet, Germany has benefited for years by exporting their products in Euros. The worth of the Euro is a heck of a lot cheaper than Germany's original export currency, the Deutsch mark. As a result, Germany became an export powerhouse in Europe.
 
The simple truth is that we have been dealing with these currency issues for several years now. The declines have been gradual for the most part. That way no one rocks the boat too much and competitors can adjust to currency changes over time. The sharp devaluation of the yen, however, has inconvenienced some G7 players and they are making their views known. I suspect that Japan has gotten the message and the pace of the yens’ decline will likely moderate from here.
 
Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


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The Independent Investor: Trade Schools versus College
By Bill Schmick On: 05:56PM / Thursday February 14, 2013
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When was the last time anyone seriously considered a choice like that? Over the last 50 years, most Americans considered a college education as the only ticket to their slice of the American dream. The high cost of that education, coupled with declining incomes and fewer openings for today's college grads make me wonder if there isn't a better way forward for a large portion of our work force.
 
When was the last time you could get an electrician, plumber, or other skilled laborer to show up on the same day you called? Have their fees gone up or down? Why are there 200,000 or more high-paying manufacturing jobs left unfilled in this country in the face of 7.8 percent unemployment? My point is that there is an enormous opportunity for millions of Americans to earn more money and live a more prosperous life than ever before, but they lack the skills to apply.
 
During the Cold War, John F. Kennedy urged this nation's youth to enroll in college. It was their patriotic duty in order to counter Soviet aggression and technological gains. We listened and enrolled in college by the millions. The Vietnam War and the draft spurred even greater growth in university attendance. By the 1980s, college was the only answer to getting ahead. If you wanted an even better life, graduate school was the next step, so I applied. We called it the age of the MBA. 
 
Trade and technical schools fell by the wayside. It was a place where only those who couldn't pass their SATs would go, quietly and in shame. Attendance declined, schools were shuttered and those that did survive were as popular as the plague.
 
The globalization of the world's economies, however, threw the world's labor force on its head. What followed was a 30-year wrenching readjustment of worldwide employment practices. The developed world's work force experienced a substantial decline in real wages, especially among its unskilled workers, while the labor force among emerging economies has enjoyed a high income and standard of living.
 
Here in America those trends have resulted in a stubbornly high unemployment rate (especially among the nation's youth) and an imbalance in our skill sets. We have an overabundance of college-trained workers, an increasing (and unfulfilled) demand for skilled "blue collar" workers and a large number of undereducated high school graduates making the minimum wage.
 
The Center on Education and the Workforce at Georgetown University projects that between now and 2018, the U.S. economy will create 47 million job openings. However, less than a third of those jobs will require a college degree. Many of these new jobs will require some occupational training and skills. This new national demand will come from healthcare, construction, manufacturing and natural resources among other areas.
 
As a result, vocational or trade schools are making a comeback. Over the last five years these schools have experienced relatively strong growth, about 4.1 percent annually and are expected to continue to grow by about 2.6 percent a year over the next five years. At the same time, much of academia as well as the present government have changed their attitude toward vocational training.
 
Traditionally, we have considered vocational training as an institution that trains students for entry-level positions in jobs that don't require a college degree. That may have been the case in my "Daddy's Day" but vocational training is in a state of transition. Trade schools increasingly offer a much broader approach to education and are providing students with a variety of applicable skills. Today, technical school graduates are working in business, health, computer technology and various areas of administration as well as in the more traditionally recognized blue collar jobs.
 
I have often said that opportunities for U.S. workers with only a high school degree are dismal at best and shrinking daily. These are today's minimum wage employees. The present debate over whether or not to increase that minimum wage addresses a symptom rather than a cause in this country. 
 
In my next column, we will look at how technical schools and vocational training could help turn around the high unemployment rate of America's youth, while lifting an entire segment of workers out of the minimum-wage trap.
 
Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


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The Independent Investor: America, the Battered
By Bill Schmick On: 04:40PM / Thursday February 07, 2013
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On the eve of what is supposed to be one whopping big snow storm here in the Northeast, one can only wonder if Mother Nature is preparing us for yet another horrendous weather year. Last year was one of the costliest on record.

In 2012, at least 11 weather events, each causing more than $1 billion in losses, were delivered upon this nation. Tornados, hurricanes, wildfires, and drought were just some of the fire and brimstone that left 349 people dead while leaving millions of inhabitants seeking shelter.

Out West, those "purple mountain majesties" were hidden by months of thick smoke as almost 10 million acres of national forest was reduced to blackened stumps. At the same time, those "fruited plains" and "amber waves of grain" shriveled away, replaced by acres of cracked, parched earth. After months of waterless weather, the 2012 drought spread over half the United States, from California, north to Idaho and the Dakotas and then east to Indiana and Illinois. Think "Dust Bowl."

That drought persisted all year and continues today in much of the nation's mid-section. Over 123 of those deaths and billions in damages can be attributed to that drought alone. Of course, the drought played a major role in spreading the wild fires, which gave us our second worst fire season in over a decade in the western U.S.

One can only wonder how the high temperatures interacted with other weather conditions to trigger an unrelenting series of tornados and severe thunderstorms in places like Texas, Oklahoma, Colorado and much of the Southern Plains. Forty-eight deaths, countless casualties and $14.5 billion in damages had many residents in a dozen states as shell-shocked as war victims.  

There was even an unusual combination of high winds and severe storms (called the Derecho Event) that cut a swath of death and damage through the mid-Atlantic from New Jersey to South Carolina this summer. It caused 28 deaths and $3.75 billion in losses.

There was also little left shining from "sea to shining sea" except search lights during the nation's two largest hurricanes: "Isaac," which blew in from the Gulf of Mexico and Hurricane Sandy that made a shambles of much of the East Coast.

It was Sandy that skewed the numbers last year. The Superstorm killed 131 people and estimated damages have peaked at $50 billion. Only 2005, the year of Hurricane Katrina, Wilma, Rita and Dennis, generated more deaths (2,000) and worse damage ($187 billion). And the damage caused by Mother Nature is on the increase.

Back in the '80s and '90s, according to the National Climatic Data Center, which is part of the National Oceanic and Atmospheric Administration, it was rare to see more than two or three $1 billion, weather-related damage events annually. We had many years where the losses totaled less than $20 million a year. But today, the standout years during those decades have now become fairly common. Billion-dollar events have become twice as frequent as they were back in 1996 and in the proceeding 15 years.

So as you read this today, "Nemo the Nor'easter," will have descended upon us. It is forecasted to pile up the white stuff at the rate of an inch an hour around here. Over in Boston, it could be much worse. Let's hope everyone survives it. Unfortunately, this may only be the first big weather event of many that we will endure this year. In which case, 2013 will simply be adhering to what is now the new normal in weather-related costs.

C'mon, Mother Nature, go pick on someone else.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


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News Headlines
Adams Narrowing Down Town Administrator Applicants
North Adams Happenings: Oct. 21-28
Cultural Pittsfield This Week: Oct. 24-30
Atlas Private Wealth Management Moving to North Adams
Lanesborough Officials Debate School Spending
Adams Seeks Fix to Visitors Center's Ineffective Geothermal System
Mount Greylock Committee Taking Up Delayed Superintendent Search
North Adams to Williamstown Bike Path Public Meeting Set
Pittsfield Schools Review Teacher Evaluation Process
'North Adams' Added to Harriman-West Airport Name

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



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