Initial thoughts on the latest spate of health care articles:
+ Medical bills are the primary cause of personal bankruptcy in the U.S.
+ I need to ask what procedures will cost before I get them.
+ I need to check what my insurance covers and doesn’t cover.
+ I need to shop around for elective stuff — especially looking overseas to Europe or Asia.
+ I need to check if my doctor is ripping off Medicare.
+ I need to check if BN (benign neglect) wouldn’t work much better. It worked on my shoulder rotator cuff problem, saving thousands.
Here’s material to read this morning:
+ Small Slice of Doctors Account for Big Chunk of Medicare Costs. Top 1% of Medical Providers Accounted for 14% of Billing, Federal Data Show. From the Wall Street Journal, click here.
+ Sliver of Medicare Doctors Get Big Share of Payouts. From the New York Times, click here.
+ See how much your doctor received from Medicare. From the New York Times, an on-line database. Click here.
+ See how the Times got much of its information. Click here. Here’s the introduction to that piece:
Deepika Singh got three stitches for a gash on her knee, generating a bill of $2,229 in San Francisco. Deirdre Yapalater’s colonoscopy, performed in under an hour at an outpatient surgery center on Long Island, resulted in charges of $6,385. Michael Shopenn acquired an artificial hip manufactured in Indiana and flew to Belgium to have it installed, costing him $13,660, a small fraction of the $100,000 his local hospital in Seattle would have charged.
When Kim Little had a small lesion removed from her cheek, the total bill came to over $25,000. Renee Martin called her local hospital to get an estimate for her pregnancy, which was not covered by her insurance, and was told that it would be between $4,000 and $45,000. She asked: “How can you not know this, you’re a hospital?”
Whatever is happening to BX, APO and KKR? They actually did what I said they would — rise strongly and pay a big dividends in the first quarter. What I didn’t figure was their recent crashing. Here are their charts compared to a simple 50 and 200 day moving average. On that comparison APO has fared worse and I’ve completely dumped it. It exceeded by Stop Loss Rule.
Blackstone has done marginally better (i.e. less worse). But I can’t find any significant reason for its drop. According to a piece on the WKRB site:
The Blackstone Group L.P. (NYSE:BX) last posted its quarterly earnings results on Friday, January 31st. The company reported $0.68 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.64 by $0.04. The company had revenue
of $2.69 billion for the quarter, compared to the consensus estimate of $1.39 billion. Analysts expect that The Blackstone Group L.P. will post $3.08 EPS for the current fiscal year.
Several other analysts have also recently commented on the stock. Analysts at Morgan Stanley reiterated a “positive” rating on shares of The Blackstone Group L.P. in a research note on Wednesday, March 19th. Separately, analysts at Zacks reiterated a “neutral” rating on shares of The Blackstone Group L.P. in a research note on Tuesday, March 18th. They now have a $34.50 price target on the stock. Finally, analysts at JMP Securities raised their price target on shares of The Blackstone Group L.P. from $20.00 to $42.00 in a research note on Tuesday, March 18th. Three investment analysts have rated the stock with a hold rating and thirteen have assigned a buy rating to the company. The company currently has a consensus rating of “Buy” and an average target price of $51.22.
The Blackstone Group L.P. (NYSE:BX) is a manager of private capital and provider of financial advisory services.
I have dumped some of my BX. And depending on today’s movements, may dump all of it. I’ve made a profit on it. Maybe I’ll come back in at a lower price, like $28.
Index fund returns.
IVV earned 1.80% in the first quarter of 2014, versus 1.81% for the S&P Index, which it’s meant to be matching. In 2013, IVV earned 32.31% versus 32.39% for the S&P 500. I don’t know the reason for the discrepancy. I do know that IVV — a boring index fund — earned more than most mutual funds last year. For more, click here.
Vanguarad also has an S&P 500 ETF which is called VOO. It rose 29.7% in 2013. But that number may be wrong. And 1.80% in the first quarter. Vanguard’s reporting is weird. They either assume you’re an idiot or they’re fiddling with their numbers. You can check out more here.
Still running on Windows XP? The Economist makes a persuasive case for upgrading to Windows 7. I’ve done that on my two main working machines. And they work fine. There are features of 7 that are better than XP, like the Snipping Tool, but you may find you have programs that don’t work on 7. I have one old machine still running XP, which I use for old software that I don’t want to upgrade.
If you’re mulling the switch from XP, you must read the Economist piece, “End of the road for Windows XP.”
For the Economist piece, click here.
NDAs? I don’t sign Non-Disclosure Agreements. They either trust me, or they don’t. But, if I sign one, I’m at legal risk. For what benefit? The opportunity in their Shiny New Thing. Their sure-fire investment? Am I cynical? Yes. Am I too cynical? Absolutely not.
Books I’m reading:
The markets are rigged by the high frequency traders. His numbers are mindblowing — investors are being ripped off — and his stories are persuasive.
Shortly, if you trade with Interactive Brokers and/or TradeStation you’ll be able to direct your trades to IEX — where you should get you better execution — cheaper price to buy and higher price when you sell. I wrote about all the front running and other unsavory practices pursued by high frequency traders this last week: Click here, here and here.
All this bad PR, that high speed frequency trading and dark pools have been getting is causing huge changes in the “industry.” From the Wall Street Journal yesterday:
Goldman Sachs is considering shutting down one of the world’s largest private stock-trading venues. In conversations with market participants over the past several months, Goldman executives have broached the subject of closing its so-called dark pool trading operation, known as Sigma X, people familiar with the matter said.
Goldman executives are weighing whether the revenue the firm generates from operating Sigma X is worth the risks that have been highlighted by a series of trading glitches and growing criticism of dark pools, the people said. No decision is imminent, and Goldman could keep the business, according to people familiar with the discussions.
We may be fighting the wrong enemy in the wrong country. — the late Richard Holbrooke
He was right. The enemy is Pakistan. They actively encourage the Taliban with money, intelligence and safe haven — think where we found Bin Laden. Yet, for some reason, we (the U.S.) give them big military aid. Go figure.
Delightful video. Now you know where all those feel-good commercials come from.
Click here.
Favorite drunk story.
Two drunks were walking down the railroad tracks.
One drunk said, “Man, these steps are close together.”
The other drunk said, “I can handle the steps, but why did they make the damn handrails so low?”
Harry Newton who opines that, to every complex problem, there is always a simple solution. The key is to set yourself a rule: “When it looks hard, frightening (and expensive) and I haven’t done it before, I will allow myself 24-hours to research my alternatives and mull on them.” At that point, the solution will be bleedingly obvious and my brain will be in a better place. This works for everything — from your bank to the IRS.
Couple brilliant thoughts before leaving for 2 1/2 weeks traveling, some out of the country. 1). Health care – some of the countries in Latin America offer super deals with world class doctors and facilities. 2). The recent Dodd Franks law forcing “full disclosure” has instead resulted in far less disclosure giving the flash investors a previously not existing advantage. More to this story, but have a plane to catch.
Pakistan? Yes, but not to forget our “ally” Saudi Arabia.
Harry, how is your BX, APO, KKR, CG looking today? try to invest for more than a week at a time
Quick thoughts:
1. Why don’t we check with our insurance if things are covered instead of relying on other people and be surprised later is beyond me.
2. 20% of Medicare payouts are to providers. That mean 80% are to drug companies, equipments, hospitals etc. Logic says it’s easier to find fat in the 80% than 20% (I am not saying that the 20% doesn’t need work).
3. Top 1%…..how about auditing top 5%.
4. Most doctors are really good people but only takes a few rotten apples to spoil the entire barrel. In Manhattan people with the Park Ave apartments and fancy cars are usually not doctors but in the financial industry.
5. Make NO MISTAKE about it. Medicine is a business whether we like it or not. Just walk into a doctor’s office. Someone needs to pay for ever rising cost of owning your own business ( you know that ).
There’s no quick fix here. There are too many hands benefiting in the name of “Medicine” with army of lobbists in D.C. Just check how many big pharma and medical supply company has in DC and how much they contribute to the congress…..
Colonoscopy in China is very inexpensive, maybe $50.00 dollars. Unfortunately hospitals are not allowed to use any pain medication, as you can imagine getting around that first turn might be a bit uncomfortable. Tough people.
Yes Harry, think and learn about real and true tax reform and the simple elegant solution called the FairTax. Learn more at fairtax.org or call me at 904-735-7565.