The Ideas Report For Serious Investors

Eli Lilly CEO John Lechleiter discusses the company's earnings and outlook with CNBC's Mike Huckman.

Posted by manualofideas at 11:12 PM | Permalink | Comments (0)

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Posted by manualofideas at 11:06 PM | Permalink | Comments (0)

The HMOs have little to fear if health care reform has to win the backing of "constituents" such as this woman:

Posted by manualofideas at 03:29 PM | Permalink | Comments (0)

By Ravi Nagarajan

When Bruce Berkowitz of The Fairholme Fund has something to say, investors are well served to listen carefully.  I was particularly interested in his comments regarding health care given the reform proposals that are currently under discussion.  Berkowitz makes a strong case regarding the prospects for continued prosperity among many existing players in the industry.

Berkowitz is also bullish on defense related investments.  I found his views particularly interesting as a contrast to a recent article in Barrons regarding the sector.

The video is provided by Morningstar.

Ravi Nagarajan is a private investor and writer focused on applying value investing techniques to find securities trading well below intrinsic business value. He is a Manual of Ideas contributor and editor of The Rational Walk.

Posted by manualofideas at 12:44 PM | Permalink | Comments (0)

Robert Huebscher of Advisor Perspectives has just published an interview with Bruce Berkowitz of Fairholme Fund (FAIRX). The interview was conducted on December 24th.  Here are a few highlights:

On AmeriCredit (ACF):

"In the worst case, we will make some pretty good money."

On Leucadia National (LUK):

"They have a better track record than Berkshire Hathaway and they take their fiduciary roles very seriously."

On UnitedHealth (UNH), WellPoint (WLP) and WellCare (WCG):

"If HMOs like UnitedHealth, WellPoint, WellCare, and others cannot provide these services, then who will? The only thing government can do is to cut a check. Those that are providing these services now will be the ones providing it in the future."

On Sears Holdings (SHLD):

"We are not looking at today’s values in the real estate market. We have come to the conclusion that we cannot snap our fingers and sell. If the value from Sears comes from its real estate holdings, then it may take a while to sell those properties."

You may also want to check out Advisor Perspectives' past interviews and subscribe for their free newsletter.  We find their questioning of interviewees to be knowledgable and engaging.

Posted by manualofideas at 12:04 AM | Permalink | Comments (0)

The Congressional Budget Office has released two large reports on health care and budgetary issues. Health care investors will find them worth a look.

Conclusions by the CBO include the following:

The rising costs of health care and health insurance pose a serious threat to the future fiscal condition of the U.S.
– Medicare and the federal share of Medicaid are projected to be about 4% of GDP in 2009 and nearly 6% in 2019 and 12% by 2050

A substantial and growing number of non-elderly people are without health insurance:
–At least 45 million in 2009
–About 54 million in 2019

Those problems cannot be solved without making major changes in the financing or provision of health insurance and health care. Policymakers will face difficult trade-offs between two objectives:
–Expanding insurance coverage while
–Controlling both total and federal costs for health care

By themselves, premium subsidies or mandates are insufficient to achieve universal coverage. Near-universal coverage is possible using a combination of approaches, such as:
–Enacting enforceable individual mandates along with subsidies for low-income people
–Creating a voluntary system that combines subsidies that cover a very large share of the costs of insurance with a process that facilitates enrollment (as in Medicare)

There are no simple solutions to address the serious concerns about the efficiency of the health care system:
–Encouraging the purchase of less extensive coverage could reduce treatments of minimal benefit
–Enrollees would face higher cost sharing or tighter management of their care

Other approaches (health IT, preventive care) could improve people’s health, but:
Would bring either modest reductions in health care costs or increases in overall spending in the 10-year budget window (2010-2019)

Significantly reducing the level or growth of health care spending would require substantial changes in the incentives faced by doctors and hospitals to control costs

Access the reports as follows:
Slideshow: Overview of reports released on December 18, 2008
Report 1: Key Issues in Analyzing Major Health Insurance Proposals
Report 2: Budget Options

For an excellent overview of key health care spending issues, view a talk by CBO director Peter Orszag in April 2008. We also recommend checking out materials from a health care conference at Stanford in September 2008.

Posted by manualofideas at 10:05 PM | Permalink | Comments (0)