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Why is healthcare hurting so badly?

Can anyone explain why healthcare has been hurting so badly (no pun intended) for the last 6 months? Is it just the market's perception that it was time for a correction after a long runup?

Comments

  • Biotech Related
    Biotech Selloff, EVENTIDE FUNDS Semi-Annual Report 31 December 2015
    The Gilead Fund and Healthcare & Life Sciences Fund are both exposed to the biotech sector,
    which normally is not correlated to the broader economy. The futures of companies in the
    biotech industry are dependent on company-specific pipelines of new drugs.
    Despite the worst selloff in biotech history, the fundamentals of the industry remain positive. The
    decline may be due in part to the 2015 drug-pricing scare in which rising drug prices became a
    political issue. In addition, biotech normally experiences one large selloff every year. But, most
    likely, the decline is due to a broad flight from risk among investors, and biotech is risky.
    As a result, we believe investors are pricing companies far below a rational consideration of value.
    While price-to-earnings (“PE”) ratios aren’t normally a useful metric in the biotech sector, given
    many companies are pre-earnings, the PE of the four largest companies show them trading
    below the PE of the S&P 500. Normally they trade much higher, as earnings growth rates in the
    sector typically outperform estimates. Small-cap biotech companies have plenty of cash —
    enough to last them for an average of 6.6 years before needing additional investment. That’s
    plenty of time to produce new drugs, and the industry has many exciting new drugs in the
    pipeline. Finally, the regulatory environment is positive, with officials approving more new drugs
    every year. In other words, the fundamentals in the sector are positive.
    EVENTIDE FUNDS Semi-Annual Report 31 December 2015
    https://materials.proxyvote.com/Approved/MC5611/20160129/SAR_275117.PDF
    1 Day Y T D
    FBIOX -4.08 -31.06
    IBB -3.30 ( nav) -22.26
    ETNHX -4.64 -27.50
    PRHSX -1.39 -13.40
    M* Health: Total Returns Y T D Ave -14.81
    http://news.morningstar.com/fund-category-returns/health/$FOCA$SH.aspx
    image
    IBB: Political Posturing Sell-Off Presents Buying Opportunity
    Mar. 8, 2016 4:49 PM ET
    http://seekingalpha.com/article/3956759-ibb-political-posturing-sell-presents-buying-opportunity
    image
    Vice President Joe Biden dropped in to Tutta Bella’s Westlake Avenue location during a visit to Seattle on Monday and ordered four Neapolitan pies to go.

    Biden was in Seattle to tour a research facility to promote a $1 billion proposal to cure cancer, announced in President Obama’s January State of the Union address.
    http://www.pmq.com/March-2016/Vice-President-Orders-4-Pies-to-Go-from-Seattle-Pizzeria/
  • Why is healthcare hurting so badly?

    Because I bought some GILD six months ago. I thought that I had warned all of you before I did that.
  • edited March 2016
    When the conservative Vanguard h/c fund reached the stratosphere with a P/E over 30 (by Vanguard's calculation), the handwriting seemed to be on the wall, in neon colors.
  • Because I bought some GILD six months ago. I thought that I had warned all of you before I did that
    I got out back around 104. Forgot to thank you for the heads-up.:)
  • @OJ - yeah, like we ever listen to you
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