My Eight-Year Experience With Micro-Caps

On December 8, 2017, Jason Zweig wrote a fascinating column in The Wall Street Journal titled "Index Funds Rule the World, But Should They Rule You?" The article questioned the dominance of index funds and suggested there might be opportunities in the market’s smallest companies.

My son, who shares little of my investing interest, told me about this article. I was intrigued. Here’s my story.

Mr. Zweig pointed out that there are "orphan stocks"—mostly very small micro-cap stocks under $100 million in market capitalization that generally aren't owned by index funds. Therefore, these mostly abandoned stocks can sell below their fundamental value.

But if for any number of reasons they grow, index funds may be forced to buy them. In theory, this structural pressure should raise the price of these stocks, possibly more than their fundamentals might justify.

I decided to give it a try. I limited myself to two stocks and not a lot of money (about 1% of our life savings). I promised myself that no matter the pain, I would not sell them, arguing that regardless of the results, I would learn something.

I still own one of those stocks. It is up three and a half times from what I paid for it, and last year it was added to the Russell 2000 index.

The second stock I bought dropped dramatically, and then rebounded when a foreign company purchased the entire company. I was now two for two. Feeling a bit more confident, I slowly started buying other orphaned micro-cap stocks, fifteen in total, nine of which I still own.

There’s some additional background that may help with my exercise. Modern Portfolio Theory (MPT), one of the foundational theories of modern investing, was developed decades ago. The details are extremely complicated, but essentially it says two things:

First, over time, higher risk investments can provide a higher return. That is, investors are generally paid for the risks they take. For example, U.S. Treasury bonds pay little because they are so safe. Other sectors such as micro-cap stocks and emerging markets tend to provide higher returns to compensate for their risk.

Second—and this is critical—if you own multiple low-correlation assets, your overall risk is reduced, but your expected returns are not. That is, you get at least some of the value that comes from owning higher risk assets but without all of their downside. This is the argument for asset allocation, the strategy of dividing your investments among different asset classes to balance risk and return.

This is what I've commonly done with my investments. No matter how bad things can get, I normally have another investment, such as I-Bonds or REITs, shoring up at least some of my portfolio.

Micro-cap stocks are inherently high-risk investments. But MPT suggests that over time, having some micro-cap stocks in a broad portfolio can reward their investors with a higher return. Diversification with other mostly uncorrelated investments reduces (but does not eliminate) their risk. That is, an investment like this can raise your total portfolio return without adding comparable risk.

I quickly learned some issues with orphaned stocks. They may not regularly trade. It may be difficult to get timely financials. And they can lose a lot of money very quickly.

I soon limited myself to stocks with steady or growing revenue, somewhat stable prices and that trade on either the New York Stock Exchange or the Nasdaq. Let’s say I’m trying to buy very small companies that seem to be doing well but are not overpriced. They have real people working for them providing real goods and services to paying customers.

As usual, I avoid assets that I don't understand, such as utilities or alternative health products, and I avoid hot markets such as AI and gold. I'm drawn to sectors that have some obvious purpose, such as healthcare, industrials and energy.

But probably most importantly, I score all my stocks based on some standard valuation and financial metrics, and I trust this simple scoring more than my instincts.

I've learned a lot with this exercise, but most importantly, I found that MPT does seem to work. When mixed with other, more traditional investments, they can increase your returns without much increase in volatility.

This is another lesson from stocks. While they can’t go lower than zero, they can rise any amount short of infinity. Yes, that may be simple thinking, but in my sample case, about a quarter of my stocks have lost some money. But six of them have at least tripled, far exceeding my losses.

Please note that, statistically, the median micro-cap stock often underperforms the market and that it is not unusual for them to never grow, and to quietly disappear.

There are endless claims that index funds will almost always outperform individual stock portfolios, on the argument that most gains come from very few stocks. In this theory, winning is a matter of luck.

But this has not been my experience. For years, I’ve repeatedly checked this claim on all my stocks, and the story is the same: Over larger time periods, although a majority of the gains are from a minority of the stocks, this minority isn’t small but instead is rather significant. Gains aren’t contained to a couple of lucky buys, but across a broader segment.

I also have frustrations with the fundamental mechanism of indexes, where they own more of overpriced stocks and less of undervalued stocks. I understand that this is due to their structure, but I don’t have to like it.

For example, today the S&P 500 index has about 30% of its value in less than a dozen huge companies, which many valuation models currently consider to be expensive. Indexes love ‘buying high,’ but not me.

I have slowly purchased these orphan stocks over many years, have occasionally made sales and some repurchases, and have sold several outright. I have limited them to a small percentage of our life savings, always prepared to eat a heavy loss.

But according to Quicken, the average annual return of my orphan micro-caps over these eight years, including unrealized gains, has been 39%, beating the average annual return of the U.S. broad market (Russell 3000) over the same period by 26 percentage points. Although there were some better years, my orphan stocks only trailed the U.S. market in one year (2022) and I’ve only realized nominal losses on a couple of stocks.

There are many easy challenges to this record—luck, small sample size, odd concentrations, small company premium, unacceptable volatility, a micro-cap boom. It is entirely possible that this has been a favorable eight-year window for micro-caps, and that another time would produce vastly different results.

I accept all of these as reasonable or even probable. But I obsessively track all my individual stocks and have casually noticed a pattern that individual orphans are highly volatile on a daily basis but collectively are not as scary as advertised.

All but one of my orphan stocks has been U.S.-based, and all were in just five sectors. Most of my investments were in industrials, healthcare and IT (electronics), and almost all the gains were in these areas.

A look under the hood, however, can be scary. It's not uncommon for a stock to drop in value by 50%. Rising or falling by double digits is also common, sometimes in a very short time. This is stomach-churning turmoil that has to be ignored.

But over time and across multiple investments, my returns suggest that they are tolerable in small amounts as part of a diversified portfolio—which is what MPT claims. Yes, arcane language and formulas would dispute much of this—remember that everything today is about indexes—but this is what I’ve thought forever: Indexes aren’t the only game and they have flaws.

My experience in no way suggests that picking stocks is easy or successful. And you can look no further than professionals to show how poorly stock picking normally goes. I recommend it to no one, if only for the angst.

I have learned some investing lessons. First, never own anything you don't understand, whether Apple or bonds or bitcoin. Second, challenge the basics of any company. Are the goods or services sound? Would I work for such a company? Most of the orphan stocks I have purchased have had very little or no long-term debt, solid revenue, and real customers—that is, in a way, my purchases are somewhat conservative, albeit small.

Decide on three or four metrics that you trust as fundamentals that represent a typical company, and then monitor your stocks by them. If a stock seems to be priced far too high or its finances are questionable, consider selling at least some of it regardless of its recent record. 

If a stock drops a lot, before considering a sale, first consider whether you would otherwise buy it. If you would, then don't sell it, but do consider another purchase.

Journal your buys and sells. Write out why you are making your transaction, and then look back for patterns. If nothing else, it might slow you down from a bad move.

Finally, there's another life lesson I've lived by, and that is to not overcomplicate things. In investing, don't agonize over daily price swings. Never time the market—it's a losing game. Activity is not your friend—when in doubt, do nothing.

If I know nothing else about an individual investor, my investing advice is to buy and hold low-cost index funds across a couple of areas, such as U.S. stocks, international equities and bonds. Then rebalance them every year or two. Over time, you won't just do well—you'll outperform most of your friends and nearly all of the overpriced managed equity funds.

But, as Mr. Zweig notes in his article, even ardent proponents of index funds will purchase some individual stocks just “because it’s fun.” To anyone who wants to do this, it isn’t rocket science—it does not require some special genius. And with some work, you too can learn something—and maybe make some money.

My Back Pages

I have a long history with Bob Dylan. When I got my first guitar—mail-ordered from Sears Roebuck for $18—his songs were some of my favorites to play, most notably “Masters of War.”

    Like Judas of old, you lie and deceive…
    You sit back and watch as the death count gets higher…
    You ain't worth the blood that runs in your veins…

And there were so many more: Blowin' in the Wind, The Times They Are A-Changin', Mr. Tambourine Man.

I never forgot Bob Dylan. Then recently, one of my Pandora radio stations played “My Back Pages” from his 30th Anniversary Concert Celebration—probably the best recording of this song. 

I was nearly in tears listening to it, written in the early 60s, played by a grand mix of musicians from this era who came together to celebrate Bob Dylan's first 30 years as a recording artist.

A friend of mine once told me that you have to have lived the 60s to understand it. It's the period I grew up in. I remember the Vietnam War, including the hundreds of Americans who died every week, sometimes for months at a time.

I remember when Detroit was on fire in 1967. The murders of Robert Kennedy and Martin Luther King.

I remember Nixon and his lying. In the end, he was a crook.

He resigned the same week I boarded a Greyhound bus with my guitar and bag, heading off to New York City to save the world. My elderly friend I made while away asked me to always stay a romantic. I returned on the same bus a year later, older than I was then but still a romantic.

I remember my fateful day in seminary, on my way to a life as a pastor, still trying to save the world. I walked back to my apartment, and within days I quit, returned to college to finish up a degree in mathematics and got myself a job in IT. 

What I had always planned had become more than I could do. 

I never looked back but I also never forgot this side of me. I married the girl of my dreams, had three boys and moved, ironically, to the small northern city Bob Dylan was born in. We bought a house with everything but a white-picket fence. And I got a cabin and a four-wheel drive truck, too.

Oh, I’ve liked my life—the hopes and dreams, for myself and the world. But each step I grew younger. The obvious became less so.

Now retired, I'm still playing my guitar. I spend a lot of time volunteering in the same human services I started as a teenager, still believing I can change something for the better. That maybe showing up, one person at a time, I can pass along something I’ve learned to anyone who cares.

I look at my kids and their generation, and recognize the same urgency I once felt, even if it shows up differently. They see problems we missed and push where we dropped off. And sometimes they simplify things the way we once did — because that’s often how change begins.

Maybe every generation needs its own version of certainty before it can learn humility.

I parted ways with Bob Dylan somewhere in my twenties. His most popular songs became a tiring reminder of bygone days. But a few years ago, I bought Blood on the Tracks and tried Dylan again for the first time, and I saw another side of him.

My Back Pages is a great example of the Bob Dylan I’ve come to know. He wrote it just a few years after he gained his reputation as a leader of the 60s protest movement. But apparently he came to see the black-and-white, good-vs-evil confidence this movement lived by as a rather simplistic view of big problems.

In this controversial song, he was saying that there may be other takes on complex issues like war and equality. That he was so much older then, and younger than that now.

My back pages don’t make me cynical; they make me patient. The work still matters. It just takes longer than a song, longer than a decade—sometimes more than a lifetime.

Christmas 2025

Merry Christmas! We missed you—and a lot more—last Christmas (2024), which I spent in what may be the most expensive building project ever done in Duluth: a towering, 18-story, all-glass medical facility perched on the hillside overlooking Lake Superior.

After fifty years of fighting my bad genes, I had open-heart surgery to repair a failing heart valve. My first hospital stay since birth was quite the experience. Apparently, I’d had the problem for a couple of years—all while Ann and I were walking and hiking at least five miles a day. 

It's hardly an overstatement to say that it took two medical doctors and four cardiologists over a month to figure out what was wrong. Along the way, I was put under anesthesia four different times. 

Although it wasn’t an emergency, I elected to spend Christmas in the hospital just to get it done. It turned into a family affair. Ann, the boys, and I spent the two days prior hanging out at the house where we raised them. I told Ben—who lives in Seattle, already had one kid and whose wife was eight months pregnant—that he didn't have to come.

"I'm not missing this one," he said.

They all got up at 4:30 a.m. to see us off, and they were in the room when I came out of surgery. My first recollections were the boys laughing at something I said. All went well. It's amazing what you can get for $200,000.

Since then, Jason and Ben have each had second children, Henrik and Elle (Jason has the boys; Ben, the girls). Ann restarted her mobile daycare business, with extended stays in both Seattle and St. Paul. We already knew the older grandchildren were above average and—no surprise—the new ones are, too. And good-looking as well.

We’ve continued gatherings in St. Paul, Seattle, Duluth and at our place in Lutsen, Minnesota. Ben and his family were here again for two weeks this summer. One weekend, his brothers and company all joined us at the house—a reminder that this is a one-and-a-half-bath house. It does not handle eleven people well!

We regularly get to all of their homes, and Ann and I have picked up our own travel schedule. Last year we took a two-week road trip through the Deep South. Ann has taken a strong interest in our nation’s history of slavery and racial justice, and it was a stunning trip—starting in Memphis (a surprisingly interesting place), traveling into central Mississippi through very rural areas, then east through Alabama, Georgia and South Carolina.

We stayed focused on the Civil Rights Trail, visiting both large and small museums, monuments and heritage markers along the way—including an entire Greyhound bus station in Jackson preserved as part of the story. 

Twice, we spent long stretches talking with men working at small museums, who described their memories as children watching physical confrontations unfold between their communities and the government.

One of my highlights of the year was a long weekend David and I spent in the Upper Peninsula at an Airbnb on a lake not far from the cabin my parents once owned in Michigamme. Michigamme was barely surviving when I was young, and it hasn’t changed much since.

We spent our days riding around the very rural area, stopping by the lake property I once owned, and following parts of the old railroad line engineers once blasted through the Huron Mountains that never saw a train. 

We ate at local spots and checked out the town’s new museum. It brought me back to so many wonderful memories of the area, the people and the places I’ve camped and fished since I was a kid. I can hardly wait to do it again.

Ann first visited the Lutsen Lodge on Lake Superior when she was very young. I was introduced to it through more than forty annual ski trips I started after moving to the Twin Cities. In March, five of us who have been friends since then—plus a few stragglers—will meet up again this winter.

Ann and I both owned lake property before we were married. After selling our last cabin just north of Duluth, we eventually bought a condo managed by the Lutsen Resort. One of my ski friends had already done the same.

Vacationing in Lutsen has become a regular part of our lives, often including the kids and grandkids, who usually spend several days there with us over the Fourth of July. Minnesota’s North Shore of Lake Superior is just one of the grandest places. We never tire of it.

The Nelson family founded Lutsen Lodge in the 19th century and sold it decades ago. The second owner since then is currently sitting in a jumpsuit in a county jail in Michigan, arrested for burning the iconic building down. He'll soon be back in Minnesota facing multiple felony charges. Actions, as it turns out, still have consequences.

Ann has recently reconnected with a couple of college friends who live in Milwaukee and Illinois. This summer, we’re planning to again meet up with them and their spouses for several days at our place in Lutsen to celebrate Ann’s birthday. I met them all at our wedding, and now we’re all friends.

In an odd “what comes around” coincidence, I and a Minneapolis friend I met through Big Brothers over forty years ago and who’s in our ski club now volunteer with SCORE, a national professional mentoring organization. 

It's been one of the most interesting things I've done since leaving work—helping younger people get into and succeed at their own jobs and businesses.

David started playing piano in first grade and still plays. Over a year ago, he contracted with a local restoration shop specializing in rebuilding Steinway grand pianos—fabricating soundboards, installing new actions, restringing and refinishing. Months later, they delivered it into his home. It’s just beautiful—and he’s still the best piano player I’ve ever known personally.

We’re doing well. Winter came fast. It’s been very cold and the ground is covered in beautiful white snow. Let’s call it a U.P. winter!

This week, we’ve been distributing Christmas gifts to kids whose parents are in prison—a program Ann started working with several years ago. It’s good to get gifts to kids who might otherwise have very little at Christmas.

Ann has the house decorated with a real Christmas tree. She’s making cardamom bread as I write, with plans for cookies and other fun foods. We’ll be in St. Paul for Christmas.

Wishing you all a wonderful and blessed holiday season, and a great 2026!

Ann and Jon

And as Linus reminds us every year:

“Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people… Glory to God in the highest, and on earth peace, good will toward men.”

Late Night Thoughts Listening to Mahler

Reality and Reflection

Gustav Mahler, the profound composer who died over a century ago, was known for his emotionally intense symphonies that have been associated with late-night listening and existential reflection.

Maybe I’m a little dramatic but investors would do well to now spend a little time in such reflection of their investments and strategies. Like his symphonies, today’s markets feel both grand and unsettling. 

What Could Go Wrong?

To be kind, markets are at least volatile and into uncharted territories. A lot of investment writings the past several months have been on whether or not we're in a bubble, and what we should do about it. 

Price to earnings ratios, a common measure of stock valuations, are very high. Other troubling signs include the huge capitalization levels of the largest handful of stocks making up the S&P 500 index, largely centered on technology.

These giants—known as the Magnificent Seven—dominate the S&P 500. Is this wrong? Not if their earnings skyrocket over the next several years. But that could be an expensive bet.

One of my favorite current indicators of trouble is the people now getting into stocks for the first time. Even more concerning, they’re often buying investments they may not understand.

We have amateurs who should be cautious buying into high priced stocks and sometimes into unknown investments. How about autocallable structured notes? My word checker can't even find the term.

Lessons From Three Crashes

What could go wrong?

Lots. I have lived through three market crashes: the 1987 Black Monday when the Dow dropped over 22% in one day, the largest one-day drop by percentage in the index's history. 

Then came the dot-com bubble, when the NASDAQ rose sevenfold before collapsing nearly 80%. It took over a dozen years for investors to gain back these losses.

And, finally, the housing bubble of 2008 where the S&P 500 dropped 56%. I lost about half of my life savings in this train wreck.

I'm writing today to tell you two things. First, we're probably in some kind of bubble and second, if you haven't experienced losing a lot of money in a short period of time, I have no words to tell you the pain. Mahler's 9th symphony would feel upbeat in comparison.

Tips For Today’s Investor

I lied. I have one more thing to tell you, and that is to share some tips for surviving whatever the markets are doing right now.

As painful as these three bubbles and crashes were, I had few regrets during or after. We always know what we wished we had done but that is of little help for the future. So what might you do in today's markets?

I always remembered something I heard when I was a kid: Buy low, sell high. People argue this maxim endlessly but it is mostly true.

So my first tip is to not move more money into what are almost surely overpriced markets. Buying into the Magnificent Seven could look like a bad strategy down the road.

Conversely, rather than buying into overpriced equities, you may want to consider selling some of your high priced equities. But I wouldn't suggest any big market timing.

That is, selling everything while waiting for the Big Crash could look like a bad move years from now while you’re still waiting for it to happen.

This is a good time, though, to consider your market allocations. You may want to rebalance back to what you once claimed as your ideal allocation.

Of course, that probably means selling winners and buying losers, which is always hard. And if you can't, consider what you might do if your winners dropped in half in the next month.

Regardless of the promises we make to buy low and sell high, when those times arrive, we find it hard to actually sell something that has done well and buy something that isn’t doing well. People's instincts are to assume the last 2-3 years of returns will continue forever.

This is poor thinking, our Neanderthal brains. A friend of mine told me in January that he had sold most of his international funds and moved them into US equities.

Internationals have done poorly for years but have far outpaced US markets so far this year. It was a bad move this year but would have been a great one several years ago. Market timing is a proven loser.

Stay the Course

My final recommendation is that you consider staying the course. It's what my hero Ronald Reagan did early in his presidency when the US was deep into one of its worst recessions. His advisors were strongly recommending big changes.

But he believed in what he was doing, regardless of what we thought of that plan then or now. Largely because of this strategy, he went on to become one of the most popular presidents ever. It worked.

Like Reagan, investors sometimes need conviction—not because they know the future, but because they believe in their long-term plan.

Staying the course—that is, doing nothing—is often your best plan with investing. A natural response to change, good and bad, is to do something. Activity with markets is not a good default.

If you have followed some basic investing principles such as keeping to an allocation, understanding what you own, not trying to time markets, keeping five years of income you may need in a money market or other short-term fixed income assets, you are probably just fine.

Then when the markets do crash—and they will someday—be very cautious about selling anything. Remember: Buy low, sell high.

Mahler knew how to end in silence. Investors should too—sometimes the wisest move is to do nothing and let the music resolve on its own.

Seven Days Inside America’s Healthcare System

I spent last Christmas in the hospital, my first stay since I was born. Although not an emergency, I needed my operation sooner than later. It was a humbling experience in one of the most complex, high tech sectors of modern life, much of which didn't exist when I was born.

I have a long relationship with heart disease. My father and his brother both died from it in their forties. Although older, their parents also both died from it.

Since I was young, I have been keenly aware of my bad genes. Wanting to live a long life, I never smoked, watched my diet, ran and developed other life habits to minimize my exposure to heart disease. 

It mostly worked. The kids are grown, we have grandkids, I'm safely retired and we’ve been walking five miles a day for years. 

Since my first physicals after college, I was encouraged to watch my diet, to run and to take medications to lower my cholesterol (even though my cholesterol numbers were good). 

In their zealous determination to keep me healthy, I once failed a treadmill test. They assumed that I had probably already had some heart attacks. But on further review, they cleared me to do anything I wanted. It was a false alarm.

But last year my luck ran out. I woke up a couple of times feeling short of breath. I wasn't sure what was a virus and what was more serious, but I reluctantly went into the clinic.

Once they heard my symptoms, they immediately sent me to the emergency room, offering me a ride in a wheelchair. (They let me walk.) For the first of several times, they told me to plan on spending the night—or a week.

But every time they sent me home. It's hardly an exaggeration to say that it took two general practitioners and four cardiologists a month to diagnose my problem. I had a bad heart valve and I would need it fixed.

And that means open heart bypass surgery, the "big one" as multiple people reminded me.

Open heart surgery for a valve problem is a non-trivial medical procedure. I had once read that if you ever saw open heart surgery performed, you'd wonder how anyone survives. 

Although it's safe and quite common, I knew enough to not want to hear what they were going to do to me. 

When writing up my health care directive years earlier, I repeatedly stated that in the end-of-life world, I was most afraid of pain. Dying isn't a fear of mine. 

So when they had me lying flat on a gurney and asked if I had any questions, I had one: What pain could I expect over the next several hours. 

I was told that I'd be unconscious before I left that room and I wouldn't feel anything. As for dying, I wouldn't know it if it happened. 

Open heart surgery for a valve replacement requires a team of at least seven people. It started with making a 7 to 8-inch incision down the center of my chest. They cut through my breastbone and spread my ribs apart to reach my heart. 

They connected me to a heart-lung bypass machine which takes over for my heart and lungs, both of which are stopped during the surgery. Finally they were able to repair my valve, which probably took about thirty minutes of the four hour surgery. 

Once my valve was repaired, they restored the flow of blood to my heart, got my lungs and heart working again and disconnected the bypass machine. Finally, they wired my ribs back together and closed me back up.

My first memory waking up was hearing my sons, a welcomed sound. I couldn't see yet but I could point and name which one was talking, which got them laughing. The nurse was right—I had felt nothing.

All went well sans a common complication that extended my stay a bit. Before they operated, I heard repeatedly that I will "do well." But after not eating for days, I didn't feel well. Early one morning, a nurse was making a routine visit.

Talking to her, I started to cry. I told her that I was confident that I would be well, but it sure didn't feel well then. I was on emotional overload. She was so kind. She gave me two hugs.

This was mostly my experience with the people that cared for me, whether the surgeon, the nurse who I talked with last before my surgery, or the one who gave me a hug when I needed one. They were very kind, very professional and most notably, very busy.

I was intrigued by the number of people who were involved in my recovery: nurses, doctors, pharmacist, maintenance and cafeteria people. They did their best to accommodate me for anything I asked for.

I was also high in a brand new glass medical facility overlooking Lake Superior. I had a private room with a gorgeous view. Sometimes I'd awake in the middle of the night and just look out over the quiet city and lake. It was stunning.

For years, I've been intrigued by the healthcare system. I realized long ago that healthcare is expensive, consuming about 20% of everything the U.S. spends today, nearly four times what it was when I was young.

My general observation from the outside has been that the system is exceptional in its output but is bloated and mismanaged.

I'm reminded of it when I receive two conflicting arrival times for the same appointment, when I provide the same information repeatedly or when I'm mailed indecipherable multi-page statements, often with "do not pay" stamped across them. 

Although I stand by many of my criticisms of our healthcare system, I admit that after my stay, I am quite amazed at it, and I have a new appreciation for why it is so expensive.

Having worked my life in IT operations, I quickly came to an understanding of where the money goes in healthcare. It's not in the $200 drugs, the overpaid specialist or our modern facilities.

Roughly, two-thirds of healthcare is labor, the people I saw all day long, plus many more.

And there's no AI or robotics that are going to straighten out my bed, which happened every several hours for days. No automated valve replacement. Ditto drugs, IVs or food.

After some days I realized I hadn't taken a shower. I put together a plan to get myself into the shower seat, turn on the water and wash myself up enough to feel better. This was the plan of a man who couldn't get out of bed without help. 

Good luck with that! I asked my nurse if I could take a shower. No problem, he said. "I'll be back in ten minutes." 

When he returned, his first words were that he would help me get undressed and onto the seat in the shower, but he would do all the work. My only job was to tell him what I wanted cleaned.

I'm still traumatized! I wondered what you have to pay a nice young person to give an old man a shower. But I soon realized that this is his career, and it was less work than washing his dog. 

Any pride I still had was gone! But I was clean and felt good. When he was done, he just asked if I needed anything else and then went on to his next task.

So what does open heart surgery, including seven days in the hospital, cost? This brings me to the most intriguing question of my stay, and that is what I call healthcare's imaginary money. 

The list price for my stay was $200,000, more than the median life savings of a retired person. Where did that price come from?

But my insurance said the price was $62,213. The surgeon billed me $17,110 but my insurance paid $2,112 as full payment. And for me? I paid the surgeon nothing and then $1,828 for everything else, a fraction of the total cost. 

The internet says that the average cost for my procedure in my area is between $80-200,000. How does a logical mind wrap themselves around figures like this? 

I now doubt that there is any silver-bullet for fixing healthcare and its costs. But here are a couple of thoughts. 

Start by getting the costs into real numbers that can be compared and challenged. What does something actually cost? Does anyone know?

Then build on the existing healthcare exchanges. They can seem burdensome but they live with real numbers and provide individual options. Nearly half of Medicare is already processed through their own exchange. Why not employers and Medicaid, too? 

And finally, let’s acknowledge that it’s the price for modern life, and that price is high: about 20% of everything you earn. We can argue all day about who pays for it, but in the end, collectively we all are.

While in the hospital, I listened carefully to every recommendation for a good recovery. They emphasized exercise and diet, and I intended to follow all that they said. 

I shared my plans with the staff, telling them that I loved them all but my goal was to never see them again.