What Did You Buy Today?

[Otter]

(04-17-2019, 10:02 AM)saimash Wrote: Any ideas on UNH this morning... I bought 50 shares of UNH yesterday @ 216... Put another limit order for 25 shares @ 205 today, but the market didn't bite... I think it is a great company for Long Term investment... But wanted your thoughts as well

It looks fairly valued, trading at roughly its 10yr average P/E. Could definitely go lower on concerns about single payer or other cost-limiting measures that are front and center in the 2020 political debate. 

Health care spending in the U.S. at the end of 2018 accounted for roughly 18% of GDP, or about $10,750/person. That's more than 20% more than the next-highest per-capita spender, Switzerland, and roughly double the average in OECD countries. We don't get a net benefit for all that extra spend, as our healthcare outcomes are typically worse than countries spending less per capita:

https://www.reuters.com/article/us-healt...SKCN1GP2YN

This makes health insurers an easy political target, as a middleman entity driving up the cost of healthcare between patients and providers. Medicare typically delivers services to beneficiaries at a lower cost than private insurance, due to its massive patient base, political clout, and attendant bargaining power to set reimbursement rates. A large part of the current political debate for 2020 is taken up with one side advocating for expanding Medicare or making it universal. That's a threat to private insurance, as such an outcome would shrink or eliminate their share of the pie. I'm not sure the market's perception of risk in this space is misplaced.