August 26, 2009
– Comments (4)
A quickie on why we, at Hidden Gems, are doubling down on our Healthcare sector research.
Cashing In on Obamacare
Confusing and pointless article. Catchy title, but zero substance. -10 Recs
Seth, I think you are right on this one. It looks just like the downturn in health stocks when everyone was worried about HillaryCare at the start of the Clinton administration. That turned out to be a great time to buy.
Chris - long JNJ, GSK, TEVA
there are other examples of great times to buy the hated sector. Homebuilders a year or so ago, anyone? I totally got that call wrong. Also the pessimism over carmakers and parts makers a few months back. We at least got that one part right at HG, recommending ALV. In my personal portfolio, however, I ditched my F at the height of the fear, and locked in a big, unecessary loss.
We did well with some techs in HG as well when people were hating on them more than we thought was prudent.
I think healthcare is currently a great spot to check for stuff that people hate. We'll be mining it heavily in the coming months -- in fact we start tomorrow. And, of course, we made our first real money buy in the sector a few weeks ago.
Hospitals are putting off buying equipment until the health care situation is resolved, but sooner or later they have to replace their old equipment. I think healthcare reform will be stalled for some time and eventually hospitals will start buying again. The same goes for people postponing elective surgery.
Even with the murkiness of growth projections in this sector, the market has got to be overly pessimistic, just as you pointed out for the auto and homebuilder companies.
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