Choke On Your Healthcare Shorts

Shame on you, you know who you are, you infect your stock operation with personal political beliefs.  The market doesn’t give a crap about whether you are a Democrat or Republican, it doesn’t care if you’re rich or poor, old or young.  The market will eat you alive if you force your beliefs upon it.  I’ve heard so many “smart” people say that passing this healthcare bill would kill the market, that it will kill our economy, that it’s a catastrophe.  I hope you all sold short healthcare stocks in size this morning and are having your faces ripped off.  I’ve said this for months now and I’ll say it again.  It doesn’t matter whether the healthcare bill is good or bad for each individual company, the market loves when questions are answered, unknowns are done away with, when indecision is resolved.  That is what you are seeing today, the market is breathing a sigh of relief, that it has new rules to work by, whatever those rules may be.  In my experience as a trader I have learned that the market hates one thing above all else, not knowing the rules, traders shoot first and ask questions later when that happens.

Which companies does the healthcare bill benefit.  Well it looks like pharmaceutical firms are going to see increased demand because of the fact that everyone will have health insurance now, and therefore be able to get prescription drugs.  How long this will last is anyone’s guess, I believe we are eventually going to see the government ration drugs because of the fact that it will get too expensive for them to pay.  But this is way down the road.  So for now, biotech, pharma, medical devices, they will all benefit from an increase in the number of consumers.

Medical information technology is going to benefit, think $CERN.  The chart looks great as well.

Who gets squeezed, the health insurance providers.  This really wasn’t healthcare reform, this was health insurance reform, and the government is going to do everything they can to make these companies into non profits.

Now, allow me to opine on the philosophical argument of healthcare for a second.  I wrote a post last weekend that included an article which dealt with the question of free market healthcare.  Look, I’m not happy about the fact that I will be in effect paying for poor sick people to have free healthcare through higher taxes, especially on capital gains and investment income.  I am fundamentally against medicare, medicaid, social security, and many other social systems that depend on the next generation paying for the current one.  This whole idea started with Roosevelt in the New Deal, it isn’t new, this is just the next step.  You’ve got to understand that being on the other side of this trend is just fighting a losing battle, our government will continue to put more and more social safety nets in place as corporations make more and more and individuals make less and less.  This is redistribution of wealth.  On top of that, the government made the decision a long time ago that healthcare was a fundamental right, this isn’t new either.  Pelosi said as much in her speech on the floor last night, she used the words, healthcare is a right.  On the other side, Ron Paul, who is a crazy fucking son of a bitch, said the exact opposite, that healthcare should be paid for by the individual and is not a right.  I tend to agree with him, but once again, if I were to bitch and moan I would be fighting a losing battle, this trend is not changing.

If you don’t like our country moving further and further towards a socialist structure, move.  Don’t tell me that you will vote for politicians who will reverse this course, because you won’t.  PEOPLE DON’T VOTE FOR POLITICIANS WHO TAKE THINGS AWAY!  I did not hear one Republican (save Ron Paul) say that healthcare was not a right, and that the government should not be paying for it in any way.  I reiterate, you don’t get elected telling people they can’t have things.  I would respect the politician who says, look we can’t afford this, and I don’t believe the government should be providing it philosophically.  But no, they can’t say that because who in their right mind would vote for someone who said that, even if it was the right decision.  People are idiots, your politicians are just playing into that.  So instead of having a real philosophical conversation on healthcare, we have this bickering over process and politics.

As for the Democrats, they think the government should give everything to everyone, yet have no clue how to pay for it.  Screw them.

I apologize for this diatribe, I’m done talking about healthcare for a long time, I’m sick of it.  If one thing sticks with you from this rant, please remember, do not trade the market/economy/political outcome you want, trade the one you have.

As for the broader market, we need a rest here.  I believe we are going to see some chop through the rest of the week followed by a move towards 1200.  My final target for this market has been and will continue to be 1250 where I will reevaluate the macro situation.  My energy and materials positions are weighing on my book while I wish I had more biotech exposure.

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