Alan Young

What Healthcare Reform Could Mean for ETFs

If Lydon thinks the legislation would destroy some businesses, he should be clear about it. Does he mean, literally, "legislated out of existence" as in outlawed, forced to discorporate? I don't know of any such provisions in the bill. If he means, "no longer able to compete" he should say that.

This is another silly overreaction based on the ravings of right-wing talk show entertainers who know (or care) nothing about the legislation, or the health care business, and take talking points from insurance industry lobbyists: "pull the plug on grandma." It's just noise, and Lydon should know better than to turn it into an investment thesis.

The fact is, we collectively spend far more on healthcare than any other country, and we are not getting our money's worth. Bill or no bill, we cannot survive this trend—we just can't afford to keep feeding the greed of these companies (big insurance, big pharma, and big hospital networks). They will have to learn to get by on less. Unfortunately, the current legislation won't even accomplish that. The pigs are still at the trough. It's going to take an even bigger crisis to focus the political will to start making health care affordable *for our economy as a whole*. (Whether or not it will be affordable for individuals is another question.)


On Nov 10 04:36 PM Steve in Greensboro wrote:

> Thanks, Mr. Lydon, for the note. You wrote"...On the other hand,
> if healthcare reform goes through, some ETFs could see their holdings
> change as some constituents are legislated out of existence by the
> new laws..."
>
> Wow. "Holdings will change" is a pretty euphemistic formulation.
> Don't you really mean that "if healthcare reform goes through, shareholders
> or healthcare ETFs will see a substantial part of their net worth
> destroyed as the constituents are bankrupted"?
>
> Let's be clear
>
> If you think Obamacare is going to be enacted (or if you don't know),
> you should sell health care and every other U.S. equity and stay
> in cash.
>
> If you think it is going to be defeated and result in no bill, you
> should buy healthcare and every other U.S. equity.

The Good and Bad of Wal-Mart

Is Wal-Mart taking credit for keeping the price of real estate down? I hope so, because someone is doing a crackerjack job on that.

Since housing is about 30% (40%, used to be more in California) of a typical consumer budget, trying to correlate consumer price savings vs. wage reduction is fudging the numbers, very badly.

Publishers Wake Up: Online Readers Are Paying You - In Attention

Great! I hope to god (Hermes, that is) that Murdoch goes ahead and gets his Faux-News off of Google. Then I won't have to see his propaganda headlines when I'm looking for actual information.

Are ETFs Creating an Emerging Market Bubble?

Interesting idea. If iShares had to stop buying VALE and PBR to diversify the portfolio, it wouldn't really hurt those stocks; but the fund would have to buy more shares of smaller stocks, instead, which could get a nice boost. A possible arbitrage opportunity?

Holiday Shopping Tips for Gold Stocks

Great analysis, thank you!

I find it astonishing that all these stocks have a beta (vs. S&P) of <1. What's with the stereotype that commodity and mining stocks are volatile?

Common Usage Errors on the Seeking Alpha Site

BRAVO. I have noticed most of these errors; having worked as an editor and English teacher from time to time, I never cease to find them annoying. It's so refreshing to see people actually caring about standard usage.

Editors, please take note!

The one that surprised me was "comprised [of]," which I've very often heard used—and probably used myself—in the way you say is wrong. I'm shocked to find a rule of which I've been completely ignorant. I'll have to do more research!

Thanks again for posting this.

Obamacare: Affordable Private Insurance Is Already Available

There's nothing like an industry-sponsored "study" for getting an objective viewpoint, is there?

If the term "blood sucking vampire squid" weren't already taken, I'd suggest using it for the "healthcare" insurance industry.

In the US we pay about twice as much for healthcare as other developed countries do, with poorer results. We don't live as long or as healthily as Europeans and Japanese with their government-paid care, BUT WE PAY TWICE AS MUCH. That's collectively, not individually; that includes people who can't even get insurance Most of the difference can be accounted for by the 30+% sucked out of the system by insurance companies; most the rest is probably increased administrative costs to doctors and hospitals who have to deal with complicated and recalcitrant insurers.

Yes, these are the companies we should trust to inform us as to the best way to spend our money, and, especially, as to how to regulate them. Or so Mr. Perry believes.

Healthcare Reform: Two Extremes, Neither Focusing on Health

Good article! You've made some excellent bulls-eyes on aspects of the problem. If the term "blood sucking vampire squid" weren't already taken, I'd suggest using it for the "healthcare" industry.

Still, it's missing an important point.

In the US we pay about twice as much for healthcare as other developed countries do, with poorer results. We don't live as long or as healthily as Europeans and Japanese with their government-paid care, BUT WE PAY TWICE AS MUCH. That's collectively, not individually; that includes people who can't even get insurance Most of the difference can be accounted for by the 30+% sucked out of the system by insurance companies; most the rest is probably increased administrative costs to doctors and hospitals who have to deal with complicated and recalcitrant insurers.

IOW, eliminating private, for-profit insurance (or making it a much smaller part of the picture) is probably the best thing we could do for the good of the country. When the 15% of GDP that currently goes to disease-management is brought down to 8-9% and applied to actual health, we will have less burden on the payrolls (employers and/or employees and/or taxpayers will save $$, and from the macro point of view it doesn't really matter who gets it—it will help the rest of the economy recover). Plus, a (potentially) healthier population. Win-win.

U.S. Healthcare Legislation Investment Impact

Let's do it without the name-calling, shall we?

Mr Shaw, you are over-reacting. Health industry lobbyists had more influence on this bill than anyone else, especially Socialists. Insurance companies will prosper from increased enrollments. Michael D. makes an excellent point: more coverage=more business for everyone in the sector.

It would have made sense to craft a bill that would have reduced the costs of the system, which is wildly out of control. But they didn't. The pigs are still at the trough. And we can count on the Senate to throw them more slops.

Credit Default Swaps: Once Again, The Tool of the Devil

thanks for stating the case so succinctly.

Four Charts from BP's Statistical Review of World Energy

Very useful info. Two salient points:

1. Asia has doubled its use of coal in 10 years, while the rest of the world has remained flat.

2. The proportion of proven oil reserves is slipping away from the Middle East and Asia, while leaping upward in Africa.

There must be an investment thesis or two waiting to be formed from this, plus a few other data points.

Advocates to Repeal Sarbanes-Oxley Forget Its Origins

Mr. Antar, I salute you.

Sometimes we say we put people in prison because they need to learn a lesson. You have moved so far beyond that, that you are ready to teach us, instead.

I hope Congress pays attention to your message.

Agency-Backed Mortgage REITs at a Crossroads

Thank you for trying to clarify a very lucrative but mysterious sector. I've been puzzled by seeing different REITs, which I thought did roughly the same thing, going marked up and down in price on the same day. Now I begin to understand.

Agreeing with Croc, above, on everything... need more study of annual reports and quarterly conference calls, I guess, but even then, would I understand them without even more background study? I hope you will publish more analysis like this.

Key ETFs Furthest Above and Below 50-Day Moving Averages

Overbought/oversold stocks can remain overbought/oversold for a long time. Traders who want to buy low and sell high must be both cautious and patient, because market momentum punishes contrarian bets more often than not.

Goldman Only Lost Money Trading One Day Last Quarter

Rule 1: Get the government to help you stay in business.
Rule 2: Make sure your competitors don't.