We Bought The Best Performing Healthcare Stock Ever

[@Nanalyze]

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[@themusic6808]

Healthcare manufacturing whether it be medical devices or diagnostic instruments is a goldmine of a sector. High moats, high regulation, and the government never steps in to break them up when they get to be conglomerates or monopolies. Hospitals, research labs, and care facilities also run on industry standards, they don’t go looking for competitors often to switch their equipment lol The few unfortunate times I’ve been in a hospital I find myself scouring the premises to see who makes the equipment 😂 Danaher and Thermo Fisher Scientific are two similar examples of high compounding machines.

[@Nanalyze]

Thank you very much for the insightful comment! Thermo Fisher covered recently here: www.nanalyze.com/2024/06/tech-exposure-thermo-fisher-stock/

[@MrMentalpuppy]

Great video! If only the Romanian fortune teller could tell me about a similar stock that would run as well for many years 😢 Nana hiding the true alpha 🙃

[@Nanalyze]

Problems on that front. We took our Romanian fortune teller, Nana Vanga, to Burning Man (because it's always been on her bucket list) along with her sister, Olga, who is pivoting into fortune telling after a lucrative career in adult entertainment. Unfortunately, they exhausted all their psychic energy at an art installation in Deep Playa and are now largely useless. We're told it will take 69 days for their chakras to recharge. Stay tuned.

[@GM4ThePeople]

Interesting finding that the companies with the greatest returns over shorter intervals were generally not those with the greatest long-term returns. Wonder whether this useful observation could be developed into a "Nth Pump & Dump" vs. "The Next Nvidia, Maybe" algorithmic discriminator, so's ya don't have to wait 87 years to find out. Vital to have a complete DB w delistings, BKs, etc. A feature of most freely-available stock screeners or other web apps on top of a historical data DB is a very strong "doggie in the window" survivorship bias. o/

[@Nanalyze]

You are absolutely right. The finding that over half the companies had negative returns is remarkable and only evident with a comprehensive data source. We'll start to work on your suggested algorithm right away.

[@GM4ThePeople]

@@Nanalyze Go go Team Pivarunas-Bessembinder!! ;D Ed: P.S. Oh, one quick thought is that by using the S&P Total Return Index as the benchmark (or some global TR index if you insist), & de-trending each of the stocks in the study universe by this benchmark, we might get a bit cleaner of a picture of each instrument's (relative) performance, because there is a lot of jitter in the stock market, & because the decision to go long or short any given instrument is a choice out of the universe of possibilities at any given time. Anecdotally, the momentum trader Qullamaggie (on KZbin) asserts that recent outperformers (given certain screening criteria) which continue to relatively outperform over a >= 10% S&P freakout are a license to print money. Cannot confirm, but believe that a de-trended view will more clearly show the relative performance in different markets than otherwise. Playing in the relative performance view could open up a load of ideas in the search for explanatory power. Can we cluster stocks based on their behaviour during certain market moments? Are certain types of instruments leaders, or laggards, in certain types of markets? Etc. etc. Data analysis, helluva drug.

[@riffsoffov9291]

There's a thing called the Lindy effect - the longer a non-perishable item has been around, the longer it's likely to continue to exist. Perplexity AI thinks the effect applies to companies, but it referenced a Redditor's study - Lindy effect in investing?. I asked Perpy if the study had survivorship bias, and it had been criticized for that in the comments.

[@Nanalyze]

@riffsoffov9291 That's really interesting, thank you for sharing. It helps explain why IBM is still around ;)

[@OmaticFever]

"Bailey Gifford - Great outfit!" - hahaha I love these healthcare stocks!

[@Nanalyze]

That comment comes from research I've done around Scottish Mortgage. The report I read on their stated strategy was almost Buffett-letter caliber. I've generally found what's on paper to be quite compelling. That's what the remark was based on. :) Joe P.

[@riffsoffov9291]

I've heard people say the healthcare sector is good for investing in, because 1) it's recession resistant, 2) the needs of the aging population in the US and other developed countries, and 3) AI will reduce the cost of drug discovery and produce more new innovative drugs. They might be right, at least on the first two points, but I think there could be increased competition for a limited budget from insurers and governments. I don't know if that's a big risk, but I like Abbott's strategy of selling into countries where the buying isn't dominated by big payers. BTW I need to listen again or do some research into how big that is as a percent of Abbott's revenue. @Nanalze thanks for the video!

[@Nanalyze]

Great points and glad you enjoyed the video! Abbott had 13% of 2023 revenues coming from "Established Pharmaceutical Products." Of that, 75% comes from "Key Emerging Markets" and 25% from "Other."

[@riffsoffov9291]

@@Nanalyze Thanks for the info!

[@brianh9014]

Bought abbv yrs ago, its one of my top 5 stocks. 😊

[@Nanalyze]

Gotta love those dividend champions

[@jboogie5992]

I’m honestly stuck between JNJ,ABT, ABVV or just something like SCHG to try and hedge against market. Any insight or suggestions because I was going to DCA $15 a week

[@Nanalyze]

There is fractional share ownership so you could do both :) but at $15 a week it's probably easiest to just use one ETF to get started. If we had to hold one ETF: kzbin.info/www/bejne/emWYmqKhmp6Jebc Also consider the Bogle three-fund approach: kzbin.info/www/bejne/Z328g2aeeZ2JfKM

[@mustbeyalla]

When I look up Abbott laboratories it only shows 10 years of dividend increases… am I missing some information that led to this or what’s wrong here?

[@Nanalyze]

When you look it up where?

[@Nanalyze]

The company states 52 years increased in a row, S&P Global lists them as an aristocrat, and our data licensed from Nasdaq confirms the same.

[@mplt6151]

Thanks for the video. I am invested in IHI etf in which ABT is the main holding with 16.6%. I prefer the etf over a direct investment because diversification reasons. Performance is at least the same or even better.

[@Nanalyze]

We think ETFs are a great idea, but you need to qualify that "performance is at least the same or better" comment. The ETF has only been around since 2006 and you need to consider total return.

[@LegaliseFinland]

PowerPoint presentation viewers don't have short attention spans, Perun makes hour long presentations and consistently gets at least hundreds of thousands of views.

[@Nanalyze]

We like to take the piss sometimes ;)

[@riffsoffov9291]

Did Abbott have an entrepreneurial and fair-minded culture that also had some quality that explains the culture's endurance, or was it just luck that stopped the culture going bad? I'm guessing that's a lot easier to ask than to answer. The main shareholders are funds so there's probably not been any influence from the Abbott family for a long time, and the founder died before the IPO.

[@Nanalyze]

Great question. In bee school we studied this stuff to no end. Really tough to put into practice. You can't force feed people a corporate culture. Seems like it's tough to replicate, though you can piecemeal together best practices. Joe P.

[@Tideo123]

10 years from now, it's going to be hard to know which AI God(s) to listen to when we buy medicines or services. Is it going to be Microsoft AI or Meta AI or Google AI? They all give us good advice for our best benefit. Should we listen to the doctors who give out advice with vested interest or listen to an AI God that does not have bias (or maybe having financial benefit to the model owner).

[@Nanalyze]

We'll probably see industry verticals for things like healthcare in which case there ought to be published data on success and such. Economies of scale will work wonders for any algo so one specialist leader is likely to emerge per domain (medical imaging, general health, cardiology, etc.) and then some God algo links them all :)

[@longgone9738]

You SERIOUSLY don’t think AI will be riddled with biased code? Did you already forget Google’s Revolutionary War AI propaganda and Amazon’s Alexa making the news this week only giving information about Harris while “unable” to comment about Trump?

[@Nanalyze]

We already know it is. A recent report by Stanford talks about this. Speaking of which, our video coming this Friday on the future of AI is a must watch.

[@Tideo123]

@@Nanalyze Thanks.

[@longgone9738]

@Nanalyze, thank you so much for censoring my TRUE comment. Ever hear of the 1st Amendment of the US Constitution?