Doubt and fear periodically hit the stock market or segments of it. For the past 10 years of this bull market, periodically, there have been these bouts. Recently, health care companies have been heavily sold off. The catalyst has been political commentary advocating Medicare for all. This would amount to a virtual government takeover of our healthcare system. Not only would this be a monumental task, it is unrealistic and improbable.
The chances of such a total revamp of a sector that is almost 20% of our economy is so low as to be laughable. The U.S. healthcare system certainly has many problems and provides very uneven results, but improvements cannot be government mandated. Whether logic carries the argument or not, the costs are unsupportable and needed revenues unobtainable. Markets can and do act irrationally periodically, but eventually fundamentals win out.
Compelling investments in the healthcare sector are to be had. Some companies are discovering or inventing important therapies. They are creating value for patients, society and for themselves. Those companies that are merely sucking money out of the system will eventually be found out and fail. That is capitalism working in its finest form. Yet, good policies and programs can create much needed improvements. A federal takeover will not be the answer. Stay steady, my friends.
The Lonely Bull