How much do healthcare costs matter to companies’ earnings? Relative to earnings they’re larger than many think. 24%. That’s the median estimated healthcare costs as a percentage of earnings for the S&P 1000 (the lesser-known index sibling of the S&P 500). I ran an analysis of data from S&P 1000 firms and filtered for those…
Category: Investing
Metrics Matter
In the misty land of adjusted and “community adjusted EBITDA” (thanks to The We Company for backing out the “building- and community-level operating expenses,”) we are reminded that to embellish is natural. We sometimes hide our worst selves and fill our dating profiles with dogs, filters, and a professed love of poetry. Corporate structures can be…
My Lehman Brothers Experience
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…
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….