April 2018 - Olavi Group

The Value of the Earnings Trail

April means baseball, tax day, and Earnings Season. Company earnings, while prone to short-termism and BS (see: The Number by Alex Berenson), often reveal truths. For example: the impact of a shifting yield curve for health savings companies, acquisition data (including prices paid), new growth challenges, and subtle things divulged then later omitted. While you don't just read an annual report, or 10k, you can read an earnings transcript. United Healthcare (UHC), the $200B revenue lion, is one ...

High Deductible Health Plans: Good or Bad?

They've been called blunt, unfair, cruel, likely to lead to bankruptcy or avoided care, consumer-directed health plans, account-based health plans. They've also been called necessary, cost-effective, ways to align interests. With all the debate, high deductible health plans (HDHPs), have become a way to save on premiums--the fixed costs that affect all, and for most people, all in, they are the "best" plan. What many economists like about them is the skin in the game. One big reason price transp ...

The Power of Inversion, or What to Avoid.

Charlie Munger reminds us that inversion helps us solve problems we may not be able to solve in other ways. As an example, he says if you want to help India it's helpful to first ask "what's doing the worst damage in India....and how do I avoid it?" What will lead to failure in life? His top three: sloth, unreliability, and intense ideologies. Being unreliable and lazy cancels out your virtues, and intense ideologies lock up your mind and make you less likely to change when confronted with new e ...

Journey and Experience Inflation

The best companies lean towards the subtle and simple. Nike says to "Just Do It", not that their shoes will help you on your "journeys" or that they'll lower your cholesterol. Apple had the "Think different" campaign. Now the iPhone X welcomes you to: "Say hello to the future." Google moved from the anti-evil slogan to another weird one: "Do the right thing." Amazon has no external slogan, but internally says: "Work hard, have fun, make history." Healthcare in the US rightly can't promise t ...