Bond markets, while boring and somewhat aloof for most people, are a source of early signals and key news. When bond investors make big moves to discount a specific bond’s price, be careful (as they say in Mexico, aguas). Such is the fate of a few private equity owned healthcare companies. This week the FT…
Category: Macro Trends
Healthcare Costs In Retirement
Nothing shows aspirational retirement imagery like convertibles, park benches, golf, and beaches. To add a dose of reality, $280,000 is a number that’s referenced in many studies. It comes from a rigorous report from Fidelity as the amount an average couple retiring today at 65 would need in today’s after-tax dollars to cover future health…
Weighing Machines
Without Benjamin Graham we may not know the name Warren Buffett. Graham was an investor, professor, and practical philosopher. He wrote the masterpiece Security Analysis during the midst of the Great Depression, as well as The Intelligent Investor, and was a professor, mentor, and employer to Buffett. Graham wrote that the markets in the short…
Costco: Lessons from Member Obsession.
Some call them clients, others guests or customers. Costco (Ticker: COST, revenue $141B) calls them members, a term that makes you feel like you’re part of a special club. It’s a club that will not sell you junk*. They do not exaggerate. Theirs is not fake-Enron-style-ethics-bragging, and they actually list shareholders’ interests last. Focus on the…
Why I’m Betting Against Berkshire
In 2008 Warren Buffett made a bet against active investing, or more specifically the active-active, triple-fee side of investing, the hedge funds of funds. This group charges fees for placing money with hedge funds, who typically charge their own two types of fees. hedge fund’s ability to pick funds that would outperform the S&P 500…
Averages are Overrated
I’ve always liked understanding the world through numbers, and markets are the beautiful impartial scorekeeper. When I was a teenager I used to compare the price of things to Wendy’s cheeseburgers. “That’s like 35 Jr. Bacon Cheeseburgers!” I would say in disbelief. When I was hungry I was more price sensitive of the ratio of…
The $20,000 Price Tag: Insights into the 2018 Kaiser Family Foundation Employer Survey.
Today the cost of healthcare landed on the front page of The Wall Street Journal, just below a story on bond yields, and next to the dancing UK Prime Minister, Teresa May. The angle of the story is how the cost of family healthcare premiums in the United States now approaches $20,000. The genesis of…
Part 2: Is The Cheesecake Factory in The Healthcare Business?
Now known in some circles for something beyond its array of cheesecakes, 2,000 calorie dishes, and cruise ship-meets-Las Vegas décor, The Cheesecake Factory (CAKE) added a second consecutive quarter of negative healthcare news, a cost that’s hidden in most companies’ income statements. The impact of this quarter’s negative healthcare surprise was $4,600,000, or 44% of…
The Walmart Effect on Healthcare
The 2006 book The Wal-Mart Effect describes the retailer’s impact on communities and suppliers. Since it was written, a lot has changed. Amazon has outperformed Walmart in the stock market by 20x. Walmart has also dropped the hyphen from its name. Walmart still does $57,000,000 per hour in sales, or $500B per year, and has 2.3M…
Trends, Big Numbers, and Risks: Lessons from UHC’s Earnings
It’s July and that means earnings season. We get a view of the workings of UnitedHealth Group (“UHC”), the “diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone.” We’ve all carried a United Healthcare card at one point. UHC is the largest healthcare company…