On February 18 I wrote the following about Johnson & Johnson (JNJ) –
“Johnson & Johnson (JNJ) is the single scariest chart in the stock market. If I shorted individual stocks, I would have a BIG short position in JNJ. I would be looking to add on a rally into the $62 range and a retest of the highs near $70. But I don’t short individual companies, so this is an academic exercise.”
I wrote this because I was not only concerned about the company, but I am terrified of the fundamental prospects for the industry. For months, I have been wondering how anybody could invest in Healthcare, when you know that Obama is on the warpath to nationalize it…
JNJ was down -8.4% the last two days.
This week Obama released his Budget proposals and he crashed the Healthcare stocks. Healthcare is the second largest group in the S&P 500 (15.3%), so when it crashed, the market took another leg down too.
Here are a few charts to show you what the Institutions think about holding onto Healthcare stocks –
US Healthcare Index ($DJUSHC)
US Pharmaceuticals & Biotechnology Index ($DJUSPN)
Health Insurance
Humana (HUM)
Review some of these charts if you want to see how bad the damage is to the Healthcare this week –
Amgen (AMGN), Abbott Labs (ABT), Pfizer (PFE), Celgene (CELG), Covidien (COV)…
Continue to focus on Preserving Capital!
1 comment:
I, too, have been waiting for the Pharma-implosion. Somewhat because of Obama, but primarily because of the unemployment death spiral. The industry was so fat for so long, many pharma senior management teams have no idea what to do when expenses matter.
Post a Comment