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The Japanese Market and Why the Money Supply Pushes up US Stock Prices
Dear Mr. Berko: You have said often that the $85 billion a month the Federal Reserve injects into the banking system has forced stock prices to rise. Could you please explain why or how in simple layman's English? Also, could you recommend some …Read more.
TIPS and Lost Pension
Dear Mr. Berko: How can you recommend Treasury inflation-protected securities? The government claims that inflation is 1.8 percent. That is ridiculous. It's much higher than that. Our homeowners insurance just increased to $7,800 on a home worth $…Read more.
Japanese Stocks
Some readers have asked for my opinion on the Japanese stock market, the Japanese economy and the stocks of Toyota, Mitsubishi, Honda, Canon, Sumitomo and other large Japanese companies. Well, except for a few electronic gadgets, a 310-year-old …Read more.
Health Insurance Company Investment
Dear Mr. Berko: I've worked for the government for 23 years. The government does all my retirement stocks and bonds, and it also gives me a good pension and pays for all my health insurance, which is lucky for me. Last week, my brother told me that …Read more.
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Health Care InvestmentsDear Mr. Berko: What is your opinion of Tenet Healthcare Corp. today? I emailed you about this stock last November, and you said it was a "smart speculation." So I bought 300 shares at $23 and have more than doubled my money. Do you think I should sell and take a good profit? I know I got lucky with this in a short period of time. Are there any other good health care stocks that you would recommend? Where would you put money for the greatest return in the next year? My Merrill Lynch broker thinks I should sell Tenet. — JD, Wilmington, N.C. Dear JD: Methinks that profit has spoiled you too quickly. My November email to you about Tenet Healthcare (THC-$39.74) was a no-brainer. After the passage of the Affordable Care Act, medical services issues glowed as traders, arbitrageurs, venture capitalists, investment bangsters, underwriters, hedge funds and brokers went bananas fantasizing about cotton candy earnings and sugarplum profits. The euphoria wore off, and a few months later, health care investors dialed back their excitement for a while. But in 2014, when Americans begin to demand their entitlements, our health care system will inexorably morph into a visceral nightmare of fraud and deceit, encouraged by wondrous mountains of government dollars for all who play the game. The surge in costs and demand will be epochal. Hospitals, dialysis centers, urgent care facilities, day surgery centers, behavioral health centers, drug companies, health benefit insurers, physician practices, etc., will become molten-hot profit machines, and dollars will flow like lava. When services are provided at no cost to voters who believe health care is a government responsibility, the demand and the money to satisfy that demand will rise exponentially. And wow, watch those profits rocket! Wise observers believe that in a dozen years, medical costs will triple, forcing the national debt to reach $35 trillion by 2026. Though you won't enjoy humongous perks as a CEO or an officer of a health care company or get a monthly million-dollar paycheck or live in a $40 million manse, own a mega-yacht or have a platinum retirement plan, you still could make big bucks with a portfolio of health care stocks.
Don't sell your THC, which owns 50 acute care hospitals with 13,500 beds in 10 states. THC always has been a poorly run company. Its revenues are lower today, at $9.6 billion, than they were in 2003, when they were $13 billion. In 2003, THC lost $11 a share, and the stock traded at $210. In 2004, THC lost $22 a share and traded in the high $70s. Certainly, THC has very powerful friends in Congress. Now THC is beginning to turn the corner. The Street thinks earnings for 2013 can come in at $2.65, and earnings for 2014 could be $4. If THC earns $5.25 next year, the shares could trade above the $100 mark again. Meanwhile, UnitedHealth Group (UNH-$62), Healthways (HWAY-$11.61), DaVita HealthCare Partners (DVA-$126.40), Community Health Systems (CYH-$41.83), HCA Healthcare (HCA-$37.58), Quest Diagnostics (DGX-$57.89), Universal Health Services (UHS-$60.31) and Cerner (CERN-$94.42) are other issues that could outperform the market. I recommend each of those companies because they all have special friends in Congress to whom they've made significant campaign (and otherwise) contributions. However, you might be more comfortable owning a health care mutual fund, such as T. Rowe Price Health Sciences Fund (PRHSX-$47.65), which I've recommended in the past. During the past 10 years, PRHSX has given investors one-, three-, five- and 10-year returns of 31.9 percent, 10.4 percent, 10 percent and 14.25 percent, respectively. Your broker won't recommend PRHSX, because it's a no-load, but it may be the best health care mutual fund you can buy. Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. COPYRIGHT 2013 CREATORS.COM 
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