Outlook for health stocks clouded by uncertainty about Obama’s health strategy


Although I wrote months ago that health executives weren’t very concerned about the elections, I think they have to be now.

Many health stocks are depressed and they will be until the
uncertainty about Obama’s proposed nationalizing of the health
insurance markets is resolved. We don’t know exactly what he’ll try to
get through Congress. And we don’t know whether the GOP will be able to
kill or modify Obama’s plans. Clinton had basically the same majorities
in the House and Senate that Obama will have, and he couldn’t get
Hillary care enacted.

The public mood, of course, is much different today. Insurers shoot
themselves in the foot every day, and consumers and politicians are
sick of them. They are much harder to defend today than they were in
‘93 and ‘94. So I think enough GOP senators will support Obama to get
something done.

But the markets aren’t sure, yet. Uncertainty is a market killer.

In addition, with higher co-pays and deductibles, the health
insurance and health care markets are acting much more like normal
markets despite all of the governmental distortions.

This is hurting demand for insurance, medical devices and medical
services. This is shown in the depressed prices of hospital company

So, if you’re going to play the health ETFs, play the technicals as
much as the fundamentals, which are very cloudy at this point, imo.

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