Hope you noticed I was AWOL for a week but it was for a valid, even if mournful, reason. My mother passed away last week after a relatively long and painful battle against the ravages of late-stage osteoporosis. It’s not often that someone writes a eulogy in a stock investment blog but I thought I would because its what she might have appreciated (her final wish was “to be remembered”). And now, through technology and the power of the Internet, she will be.
My mother was a vital 96 when she passed away. But her age wasn’t the most amazing thing about her. Perhaps the second most amazing thing was that for 71 years she put up being married to my father and living in his shadow. He will soon have his 98th birthday.
Perhaps the best description of my mother, one written by my son on his website, a succinct description I dare not compete with, follows:
Lillie (1913-2010)
My grandmother was a really cool and special lady.
She grew up very poor in Hungary.
She outwitted the Nazis to survive WWII.
She found her way to America and loved it here.
She wrote about it all in her memoirs.
She was married for 71 years!
She cooked incredible stuffed cabbage and squeezed her own orange juice.
She played Uno and Rummikub with us.
She always hung my drawings on the refrigerator.
She was the best grandmother you could ever have and I’m gonna miss her.
Now back to the mundane business of stocks.
Spending last week in Sun City, Arizona brought home something I knew intellectually but hadn’t focused sufficiently on: the economic impact of an aging Boomer Generation. You could rightly say, “Duh!” But it’s not until I accompanied my dad to one of his unfortunately all too regular clinic visits for blood tests that it sank in.
With an excellent hospital and extensive health services of every imagined variety, the area is very “grey-centric” and, yet, we still waited 40 minutes for a simple blood test. The waiting room was filled to capacity, getting copies of test results was complicated and the various physicians, services and records were geographically dispersed.
What’s going to happen to all these facilities and services when the patient begins growing exponentially as Boomers move into their senior years? Inevitably the same thing that happened when they moved into elementary school, into high school, into college and then into the real world of marriage, babies of their own and the work force. The answer is that Boomers will put the same squeeze on health care capacity as they have every other system as they passed through various life phases.
O.K., that’s what the health care debate has been all about, I’ll grant you that. But you can look on this as a bricks-and-mortar and “labor” constraint challenge, as well. There just won’t be sufficient capacity in the system to handle the bulge in the same way that there weren’t enough school rooms, houses, cars, etc.
Which leads me to reaffirm my conviction that most stocks in the health care industry, whether in medical technology, hospital operation and ownership, health insurance, financial services, nursing homes, retirement communities, etc. should appreciate substantially over the next 15 years. Many have offered the analogy of a python swallowing a pig to the effect Boomers have had on stocks of companies that benefited as they moved through their various life phases. They are approaching retirement and all these industries and stocks will likewise change and benefit (see “More Health Care Stocks” of March 22).
As discussed in the previous post, the market is at a crucial juncture, something I have labelled “The Great Convergence”. The confluence of risk and opportunity is seldom as obvious as it is today. Many of the risks still hang over our heads (need I mention Europe sovereign debt, U.S. election season, renewed U.S. budget debates, housing market still on its back, another round of debate about healthcare, etc.) yet each, through the prospect of their ultimate resolution, presents impetus offers another reason to be bullish.
