Who is Right on Health Care?
Monday, August 17, 2009
WSJ reported Gates Foundation, the world's largest private philanthropy fund, has sold off most health care, biotechnology and pharmaceutical holdings. On the other hand, it was published in CNN Money that investor guru Warren Buffett has bought up million of health care and drug maker stocks in a filing with Security and Exchange Commission.
Two entirely opposite investment strategies by two large institutional investors, what are the messages? Let's have a close look on the stocks acquired and offloaded.
(drug & consumer product maker)
1. Johnson & Johnson Berkshire Hathaway (BRK.A) ADD Gates Foundation SOLD 2.5 million shares
(laboratory equipment)
2. Becton Dickinson & Co. BRK.A ADD
(health insurers)
3. United Health Group BRK.A SOLD
4. WellPoint BRK.A SOLD
... and Gates Foundation also sold off all the drug makers, including Schering-Plough, Eli Lilly & Co., Merch & Co. and Wyeth. Among the other health and life sciences-related investments the foundation liquidated are Allos Therapeutics Inc., InterMune Inc., Auxilium Pharmaceuticals Inc. and Vertex Pharmaceuticals Inc. It only retains Seattle Genetics Inc.
From both Buffett and the foundation's investment decision, they possibly had considered the potential impact of the Obama administration's proposed overhaul of the U.S. healthcare system, which could put pressure on prescription drug prices, and health insurers. However, Buffett's addition of Johnson & Johnson is another classic example of acquiring defensive stocks that would clearly benefit if the healthcare reform actually passes. Why Gates sold J&J? Well, I am short of ideas to rationalise the move...
Two entirely opposite investment strategies by two large institutional investors, what are the messages? Let's have a close look on the stocks acquired and offloaded.
(drug & consumer product maker)
1. Johnson & Johnson Berkshire Hathaway (BRK.A) ADD Gates Foundation SOLD 2.5 million shares
(laboratory equipment)
2. Becton Dickinson & Co. BRK.A ADD
(health insurers)
3. United Health Group BRK.A SOLD
4. WellPoint BRK.A SOLD
... and Gates Foundation also sold off all the drug makers, including Schering-Plough, Eli Lilly & Co., Merch & Co. and Wyeth. Among the other health and life sciences-related investments the foundation liquidated are Allos Therapeutics Inc., InterMune Inc., Auxilium Pharmaceuticals Inc. and Vertex Pharmaceuticals Inc. It only retains Seattle Genetics Inc.
From both Buffett and the foundation's investment decision, they possibly had considered the potential impact of the Obama administration's proposed overhaul of the U.S. healthcare system, which could put pressure on prescription drug prices, and health insurers. However, Buffett's addition of Johnson & Johnson is another classic example of acquiring defensive stocks that would clearly benefit if the healthcare reform actually passes. Why Gates sold J&J? Well, I am short of ideas to rationalise the move...
Labels:
investments,
US
