Know A Good Doctor? We Do.

Scott Neal

Scott Neal, CPA, CFP, is the president of D. Scott Neal, Inc., a fee-only financial planning and investment advisory firm with offices in Lexington and Louisville. Reach him at or by calling 1.800.344.9098.

Standing on the Shoulders of Giants

Were you ever a member of the Book-of-the-Month-Club? I joined BOMC back in the 80s, but I quickly decided that I wanted to choose my books more intentionally and more strategically. I still read a lot; non-fiction mostly, and books have been known to wreck my budget. There are a few authors that have truly been instrumental in shaping my ideas about financial planning and investments. I believe that I am where I am today “by standing on the shoulders of giants.” My favorites are those who have set out a theoretical framework in a book or books and then update their ideas through periodic newsletters or memos.

By the way, I often find some of my giants have ideas that differ from the others. An enjoyable part of my job is to think critically about these things and to continue to dig to resolve the questions. In short, these giants have earned my respect, but not blind discipleship. I share here a sample of those I consider more significant.

H. Woody Brock, PhD, president of Strategic Economic Decisions is, in my opinion, a world-class economist. I first became acquainted with Woody in May 2007 at a conference in Chicago. I came home and started reading what he had written over his long career. We subscribed to his service, i.e. we pay him money for his thoughts, but you can sample it on his website
. His 2012 book, American Gridlock, Why the Right and the Left are Both Wrong probably needs to be updated but is still worth reading, given the loftiness of the stock market. Of importance to the readers of MD-Update, he addresses the supply / demand of the Affordable Care Act and the dynamics of total health care expenditures in the appendices to his book.

Ed Easterling, founder of Crestmont Research. Ed has written two books, Unexpected Returns: Understanding Secular Stock Market Cycles and Probable Outcomes: Secular Stock Market Insights. His conception of “financial physics” is most compelling. As importantly, his free website
provides an update to market valuation, interest rates, and the economy in a way that is accessible for the non-financial professional. His graphical representations are unique and informative. In his words, Crestmont is “keenly focused on the outlook for most investors’ horizons—periods of five to twenty years.” If you read his work, I suggest that you start with a piece that he added to his website this year, “Outlook: How Crestmont Research Forecasts.”

Howard Marks, CFA, co-chairman of Oaktree Capital Management, publishes a free memo (although you might have to subscribe to get it) a few times a year and is always an insightful read on the markets. Find nearly 20 years of Marks’ memos at
He is, admittedly, not an economist. One of his most compelling memos was “This Time is Different” written in June 2019. In it, he recalls Black Monday (October 19, 1987), and he introduces several ideas that any investor should consider. (HINT: He warns against thinking this time is different and offers solid reasons why.) His books, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor and Mastering the Market Cycle: Getting the Odds on Your Side, are both widely acclaimed by investment professionals.

Laurence Kotlikoff, PhD, professor of economics at Boston University, has greatly influenced the way we do financial planning at D. Scott Neal, Inc. He introduced us to consumption-smoothing to model the impact of current financial decisions on a family’s standard of living. His book, Spend ‘til the End: Raising Your Living Standard in Today’s Economy and When You Retire, is both entertaining and informative. It fits nicely with my theory that there are only 5 things to do with all the money that comes to you: pay your taxes, service your debt, give some, save some, and spend the rest. Thanks to modern computing technology and Kotlikoff’s tools, we can calculate the maximum level of spending, adjusted for inflation, that will allow a smooth standard of living for the rest of your life. His book, Get What’s Yours: The Secret to Maxing Out Your Social Security is a must-read for anyone before they claim their social security benefit. And if you have interest in the what our current policies are doing to future generations, I suggest his book, The Coming Generational Storm.

For other resources check out the tab What We Think on our website

Scott Neal is resident of D. Scott Neal, Inc., a fee-only financial planning and investment advisory firm with offices in Lexington and Louisville. Write to him at or call 1-800-344-9098.