Jan

19

Obama's wedding picturesWhen Hillarycare finally died in the fall of 1994, the DRG (drug stock index) rallied about 70% over the subsequent twelve months with almost no corrections, with the first serious top occurring when Newt took back the House with Contract With America. By the time that happened, the DRG index had doubled from its pre-Hillarycare low.

Admittedly, it coincided with a bullish stock market, however, there are more than passing similarities between then and now, noting also that long-dated calls on XLV are very inexpensive. A double of the March 2008 low in XLV would take this healthcare ETF from $32 last to about $44 for another 33% upside from here.

I'm not making any predictions, but it's not difficult to imagine Pfizer's p/e going from 9x to 12x, so the upside is really there for the bullishly inclined with a longer term horizon.


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2 Comments so far

  1. Steve Leslie on January 21, 2010 9:23 am

    Politically speaking it is very important to observe what is happening on the state level. NJ Va Mass going Republican. these are seismic shifts in the voting in these states. These mid term elections are going to be very bloody. This will have implications that go far beyond health care. next look at defense and cap and trade issues. Treaties and other left wing agenda items may be scrapped this whole year to keep their party in power through the elections. This could be 94 all over again. Keep your ear to the ground and listen. and observe the evidence is out there for the keen eye and ear to get.

  2. Todd Clippard on January 24, 2010 5:37 pm

    Financially speaking, the upside of the failure to pass Obamacare is a lot of hard working people are gonna keep more of their money to invest for themselves, and countless others will keep their jobs.

    Obamacare is a financial disaster waiting to happen.

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