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David White
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David White is a software/firmware/marketing professional and a long time investor. He has worked in the networking field, the semiconductor equipment field, the mainframe computer field, and the pharmaceutical/scientific instrumentation field. He has bachelor's degrees in bioresource sciences... More
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  • The Aged Will Bankrupt Any Entitlement Health Care System Unless Care Is Limited

    I keep hearing that the issues of the AARP have to be accounted for in any health care bill. My only answer to that is that yes they should be considered as thoroughly as possible. However, the overriding fact is that medicine can prolong life for a long time. The problem is that that prolongation is increasingly expensive in those last few years. Adding 1-5 years to each persons life at an average cost of the previous 15 years of medical care for that person is simply not something the US (or perhaps any country) can afford to do via an entitlement system. Beyond the age of 80, medical costs are as a rule a stop gap measure at best. Virtually everyone dies by 100. The average lifespan in the US is 78.2 years. Older people often suffer from dementia. They require more care. They contribute little to the US economy or even to US societal health. Often they are a huge drag on their families. Does it make sense to prolong this burden on the younger generations (both monetarily and emotionally)? Or does it make more sense just to let the oldest die of natural causes without making terrifically expensive attempts to prolong their lives for a few more years?

    I am getting older myself, so these questions are no longer purely rhetorical. I am like everyone else. I feel the old should be cared for. Unfortunately, the entitlement health care system cannot afford to do that without bankrupting the system. If families can afford to do this, that is great. Few probably can. That still does not mean the government should assume this burden. It quite simply can’t afford to anymore than most families. For every Warren Buffet, who has remained productive into his late years, there are hundreds or thousands of others who are severe burdens on the system and even on their families. Medical statistics show that long term serious illness of parents can shorten children’s lifetimes by several years. The reality is that the government is not doing those children any favors by extending the torture of their parents deaths. The system has to acknowledge this. The system has to severely limit how much it is willing to spend on those who pass 80 (or even those who pass 70). The AARP has to complain. It has to guilt everyone who opposes them. That does not mean that the AARP’s lobby should win on all of its issues (as it seems to do).

    Instead of acquiescence to the AARP lobby, hard decisions have to be made about this care. Many parents in the past have chosen to die quickly in order to have money left to give their children. They have chosen to forgo expensive medical care. They have realized they were dying soon no matter what happened. They have chosen not to be an excessive burden to their children. If the government alleviates them of this choice by bankrupting its own system, is that a good thing? Can the government afford to do this? Can the kids afford the taxes dictated by this government mandated choice by the parents? Will this force fed choice make the older generation apathetic about spending huge amounts on health care instead of miserly about it? I am in the baby boom generation. My generation is the one that will present a huge burden to those younger. If the course of government entitlements continues, will those younger spend all of their money supporting my generation’s health care? Does that sound fair? I want free health care, but I don’t want to rob those younger of their enjoyment of life. I find myself willing to die if extremely ill at an old age. I believe in preventative health care. I am hoping this will help. Can more be done in this area? Can a rational approach be passed with the strength of the AARP? Few politicians want to alienate this powerful group. Yet it would seem they have to be willing to anger this group in order to pass a rational health care bill.

    Disclosure: no positions in these stocks at this time
    Tags: ANTM, HUM, AET
    Feb 25 11:49 AM | Link | Comment!
  • RIG Falls Hard on Tepid Results

    RIG was down 5.51% today after it reported a 4% decline in Q4 profit year over year. It has pulled many of its shallow water jackup rigs off the depressed market. 28 of 65 are now inactive. Earnings were $2.21 -- well short of the analysts’ estimates of $2.56. Revenue declined 16%. 2010 results are now expected to be about 5% below current analysts’ estimates. The Q4 results were further driven down by a tax dispute with Brazil. This was settled for $142M. The outlook for ultra-deep water rigs is very strong. The outlook for deep water rigs is good. However, the outlook for the shallow water, jackup rigs is still tough. Much of the shallow water work in the Gulf of Mexico has already been done. Some other areas can say the same. Much more work now is in the deep water and ultra-deep water areas. This may pressure RIG’s jackup rig results for quite some time.

    This is a great company, but even its deep water rig performance in 2010 may be in question as 5 of its deep water rigs are becoming available in 2010. RIG expects to find work for these rigs, but doubt persists. It is probably best to stay away from this stock in the short term. Technically it has broken through its 200-day SMA, which is negative. Plus there may be an equalization period of 2-3 weeks in which analysts may come to a lower consensus agreement on performance in 2010. This could result in further downward movement. That being said, 2011 performance should be better than 2010. Oil prices are going up worldwide. China is now the world’s largest new auto market. It will use more and more oil for gasoline. It will use still more oil for manufacturing, heating, etc. India will use more oil. It’s economy is growing quickly even in 2010. As a long term play RIG is still a great buy, even with the above problems. As a shorter term play, you may want to wait for the analysts to gain a consensus agreement. A chart of the stock is below:

    1 year RIG chart:


    NOTE: The Williams %R data in the chart that shows that RIG is over sold in the very near term.

    Disclosure: I have no position in this stock
    Tags: RIG
    Feb 25 12:05 AM | Link | Comment!
  • Obama Typical Pol? Champions Medical Care For All. Ignores Free Clinics.

    In these days of high unemployment more and more people are going without medical care. President Obama has taken this opportunity to push his socialized medicine agenda. He is right that costs have to be contained. I am not sure how right he is in exactly how he intends to go about it. Meanwhile the bills he proposes wallow in Congressional debates ad nauseum. They may never emerge. Alternatively they may emerge as an even more costly health care system that stifles American businesses and individuals with another huge tax burden. The taxpayers cannot afford this burden.

    In this time of hardship there is action that can be taken immediately. The Congress could enact a big jump in funding for free clinics for the next 3 years or more. Most of these clinics survive largely on charitable donations. Plus they get help from the federal, state, county, and sometimes city governments. Virtually all of the labor is free. They spend their money on medicine and clinic supplies. Often their facilities are donated by churches, etc. They help millions nationwide. They are as strapped for cash now as everyone else. Their county and state governments cannot afford to give them money (or as much). Instead of serving more people as they should be during these times of strife, they are forced to serve fewer. Failing to allocate money for these terrifically efficient and “cheap” medical providers is a perfect case of being penny wise and pound foolish!

    We do not know if Obama’s socialized medicine plan will succeed. We do not know when or if it will be enacted. We do know a lot of people need medical care. Most free clinics actually provide good quality medical care. They make up for any lack of knowledge by their thoroughness. Volunteers really care about the people they are serving. They donate their time. The free clinics don’t have to pay for complex medical billing. They don’t bill. This is another cost saved. Congress should acknowledge their benefit in these times of strife by providing for them. They should not be shrinking in these hard times. They should be expanding their services. They need money to do this.

    Funding free clinics more would likely cut down on state and federally supplied medical care costs. Many people would prefer not to have to fill out all of the forms. Administrative costs for screening many questionably qualified individuals would go down. Many individuals would go to more advertised and more well supplied, much cheaper for the government, free clinics. Tremendous amounts could be saved in visits and clerical costs alone. It often costs more money in clerical costs for state programs to reject someone's request for aid than it costs for a free clinic to provide the treatment the person needs. Many more who do not feel qualified for state programs would seek the medical assistance they need. This might save yet larger costs for the governments down the line, as those people would be prevented from becoming more seriously ill through non-treatment.

    Why is this not being done? If it is, I certainly haven’t heard about it. I think a lot of free clinics haven’t either. My thought is that this type of thing would be viewed as a temporary and perhaps minimal fix. It would likely help. However, the backers of the socialized medicine initiative don’t want it because it would lessen the need for the change they are proposing. Plus it would use up some of their political capital to get this sort of bill passed. The more capitalistic (republican) Congress persons don’t want it, because they are opposed to any type of socialism. The average Joe or Jane suffers! The taxpayer suffers!

    The lack of a major initiative by the Obama administration to increase the funding to free clinics substantially during these hard times is hypocritical. Obama has to pay attention to politics if he is going to get anything done. However, he should be paying attention to the needs of his country at the same time. If he can spend billions to bailout the automakers or AIG to benefit Americans, he can spend say $10B to provide stop gap medical care for many needy Americans. He doesn’t need to start new free clinics, although that could happen. He simply needs to give the existing ones a chance to provide good care to the many needy. If a free clinic spent say 80% of the monies on supplying medical services to the community, it should qualify. Even free clinics need a few salaried people to order the supplies and organize the show, etc. My own belief is that any money spend on these free clinics would be more than made up for by the consequent decrease in use of more expensive “main stream” county, state, and federal medical care programs. Certainly many more people in desperate need of medical care could get it more easily.

    Will Obama step up on this issue? Or has he become what he claims he detests -- a typical Washington Pol? Changing the banking system in one fell swoop would likely be disastrous. Many realize this. Changing the medical system in one fell swoop would likely be just as disastrous. These things both need to be well thought out. They both need to be phased in. A free clinic initiative might give many people help while Congress makes up its mind how to change the current medical system. I would agree with Obama that it does need to be changed. It’s expenses are simply growing too quickly. However, that is not excuse for ignoring the present.

    Disclosure: no postions directly related to this
    Tags: SPY, DIA, QQQ
    Feb 07 6:26 AM | Link | Comment!
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