Long/Short Equity, Long-Term Horizon
Contributor Since 2014
Experienced portfolio manager across US equities. I have been investing for over 20 years. I have an MBA from the NYU Stern School of Business and am a CFA charter holder.
My family had a great time at SeaWorld when we were in Orlando, Florida. It was fun to watch the killer whales do their tricks. We looked forward to going back. Then we watched the documentary "Blackfish", which changed our way of thinking and behavior. The documentary educated us on the mistreatment of the killer whales and said education changed our view of SeaWorld. We no longer wanted to return to SeaWorld and never went back. Many other people that watched said documentary film (which you can stream on Netflix, Amazon Prime and blackfishmove.com) had the same reaction. The result: attendance crashed and SeaWorld's market value was cut in half since the 2014 peak.
A documentary film, which is well made, interesting, factual and helpful to individuals is a powerful way to educate the public. It is global. When the global public is educated, behaviors can and will change. This change in behavior can have massive effects on companies' valuations.
I just watched the documentary "Food Matters" on Netflix. It is a documentary on the power of nutrition and how nutritional therapy is the best cure and that there is no need for prescription drugs for long-term illnesses. The film was actually made in 2008, but nobody was screaming Netflix documentaries in 2008. The internet documentary has only hit the global stage in the past two years. As more and more people watch the documentary, become educated, search for more information and read books on nutritional therapy, the public's behavior will change. The change in behavior will result in fewer drug prescriptions and profits for the big pharmaceutical companies like Merck (MRK), Pfizer (PFE), GlaxoSmith (GSK), AbbVie (ABB), Eli Lilly (LLY), Johnson & Johnson (JNJ), Bristol-Myers (BMY) as well as many biotech firms trying to cure illnesses with prescription drugs.
I also watched the documentary film on Amazon prime "American Addict" which outlines how corrupt the prescription drug system has become with drug companies paying academics, bribing the politicians, paying doctors to recommend their drugs and so forth. Again, educated people will change their behaviors and start demanding a different approach to the current system which focuses on profits, not health.
There are several other documentaries including "Prescription Thugs" with the same message: prescription drugs are killing people (over 100K a year in the US or one every 19 minutes) and the system is corrupt. Prescriptions target profits, not health. These documentaries are educating the global public and the public will change their behaviors.
So what are the implications for investors in pharmaceutical companies? Shareholders seems completely unaware of the risk that public behavior will likely change. They should look at SeaWorld investors from 2014. Investors in pharmaceutical companies would be wise to sell their holdings to preserve capital. I sold my shares. The pharmaceutical world will likely change and change quickly. Education via the new powerful internet documentary is a risk that investors can't ignore.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.