In September, 2008 I sat alone sipping a juice in the open town hall area of a Goldman Sachs office. My eyes were fixed on a freshly printed 4-page report from CEO Dick Fuld on the status and future of Lehman Brothers, capital positions, $600B+ in assets, tangible book value per share, value-at-risk, etc. The…
Category: Investing
Healthcare Alpha
Discerning luck from skill can be hard. Baseball has 162 games per season. Boring for some but more than enough games for randomness to average out. How telling is one game? How telling is one case study? It could be random or just cherry picked. It’s the consistent rate attributable to skill that we’re after,…
Will Software Eat Healthcare?
In 2011, the legendary venture capitalist Mark Andreessen wrote why software is eating the world. Efficiency and scale could cut the costs of servers and development by 100x+. Entertainment (Netflix, Disney), cars (all), retail (Amazon), job hunting (LinkedIn), and more, all have software as integral parts of the product and value. This view has held….
China’s Healthcare 3.0
The lines start early. At 4,500 beds, the Sichuan Provincial Hospital in Chengdu is 10-20x the size of a typical US hospital. It’s not only huge but busy. Imagine a busy train station with queues and the bustle of a city. Hospitals in China have bed utilization over 100%, where beds spill into hallways. In…
Why Margins Matter
If you subscribe to Fortune, you’re likely surprised and excited by the heft of the issue on the biggest 500 firms. It’s a formidable group: $23T in market value, 29 million global employees, and over $1T in profit. With covers to sell, a cursory look focuses on revenue. But man cannot live by revenue alone….
How Americans Save: The Growth of Target-Date Funds
The premise is simple. Set it and forget it. Vanguard and others offer this approach for target-date retirement funds. Of two investing extremes there is an active self-directed retirement account, where you pick individual stocks and strive to have an edge (fewer than 1 in 200 with Vanguard accounts do this*), and there’s auto-pilot. Target-date…
Part 2: Can Healthcare Cost Move Stocks?
They say a great way to lose money is to open a restaurant. Costs, pricing pressures, and low barriers to entry tend to eat into your capital. Dad pun intended. Food, rent and labor inflation are stubborn and every extra dollar counts. All costs matter. Some restaurants make it work and build lasting brands with…
Can Healthcare Savings Move Stocks?
The proverbial healthcare industry graveyards and nursing homes are full of companies with good intentions and lots of data. Promises to track our steps and make us healthy have done little. Predictive models tell us that we’re 10% more likely to have an adverse healthcare outcome in 5 years. Yawn. Healthcare exchanges and defined contributions…
Hedging Healthcare
The history of the English landscape garden is one of luxury. Rain is abundant but there’s the opportunity cost of the land, walls of needy hedges, lawns to cut, and sweat. All throughout England, hedges or hedgerows, mark the landscapes. They were also developed as mounds of dirt topped with bushes to act as a…
Who’s To Blame?
Hardbacks are supposed to sell for more. They cost more to make, are studier, and look cooler. Elisabeth Rosenthal’s An American Sickness is now on Amazon, with the hardcover edition priced at a 38% discount to the paper version. What gives? Dig a little deeper and not being part of prime ($5 more for slower…