Displaying items by tag: healthcare

(New York)

Despite a generally weak year in equities, the market is still very expensive. That said, not every sector is and there are still some bargains to be had. Interestingly, more than half the S&P 500’s sectors currently trade at a discount to their historical relative value (relative to the S&P 500’s P/E ratio). These include: Tech, Materials, Real Estate, Industrials, Health Care and Telecom. Telecom is 60% below its average relative valuation, for instance.

FINSUM: Interesting to see how many sectors are at discounts. That said, the problem with this view is that there are no catalysts to prompt a return to the mean.

(New York)

One of the main mistakes that retirees make is that they underestimate the amount of money they will need for spending in retirement. Accordingly, one of the main jobs of financial advisors is to adjust their thinking on this and make sure that does not happen. Here are some of the reasons people underestimate what they will need. They discount the likelihood of needing to help family members who might get into a precarious financial situation, or even paying for things like weddings. Retirees also forget to budget for one-time big ticket items, even though they are mostly predictable, such as a new car or a new roof. People also underestimate how much more they spend on entertainment, as they will have a great deal more time. Healthcare is also chronically underestimated.

FINSUM: While advisors deal with this frequently, it is never a bad idea to revisit the key “problem” areas.

(Seattle)

There have been numerous articles covering it over the last few months, and it has caused some excitement and alarm in the market. The story? Amazon is going into healthcare. The hype started to build when Amazon received licenses to be a pharmaceuticals distributor. Now, Barron’s has published a piece explaining why Amazon sees an opportunity. The Internet of Things is supposed to transform the pharmaceutical and healthcare business and Amazon wants to be a part of that, especially now that it has the explicit goal of trying to lower healthcare costs in the US.

FINSUM: We think the high-minded goal of lowering healthcare costs needs to be thought of separately than Amazon’s interest in drug distribution. The fact is, the company sees a solid-margin business it can eat up with its logistics prowess.

(Seattle)

Amazon as a company has been nothing but an unmitigated success. But while the business on the whole has been stellar, there have been missteps, such as the venture into smartphones. But where will Amazon’s next big shot in the arm come from? Bloomberg says it is going to be in healthcare. The company is teaming up with JP Morgan and Berkshire Hathaway to make healthcare more affordable for their employees, and eventually all Americans. Bloomberg summarizes Amazon’s potential to transform healthcare best, saying “Amazon’s e-commerce operation could be used to send medication direct to patient’s homes, saving them trips to a pharmacy. Its cloud-computing division can store patient health-care records so they can be easily accessed by doctors anywhere. And its payments system could be used to automate payments with health-care providers.”

FINSUM: Say what you want from a returns perspective, but from a consumer perspective the US healthcare system is decidedly broken. Hopefully, this sort of initiative will eventually turn it around.