Josabi, many investors put a strict stop-loss on their investments at around 10%. Do you have any insight as to why HealthNet has dropped 15% in the last 30 days? Is it cause for concern, should we be worried, or is it just normal volatility with this stock?
3 comments:
The volitily of the health sector is clearly influenced by the President's discussions to subsidize insurance costs. We bought into this particular insurance company because of their participation in government programs. Of the fifteen major health care companies traded on the NYSE, HNT has remained consistent throughout the talks, down only 9% since we bought it (including commission). Ironically, four of our five other holdings (CX, GE, EMC, ESLR) have lost over 20% of their worth since we pulled the trigger and there wasn't a mention of cutting our losses on any of them.
Nothing "ironic" about it. The point of this group is to learn from past mistakes and not make them over and over. we have learned from cx not to go 100% into any security and haven't done that since. We should now learn from the others to question big dips especially when the market is showing signs of recovery.
Rizzi is right. The difference between the 4 stocks your mentioned and HNT is that HNT is dipping at the same time the market is recovering, which throws up a red flag. The market was in a free fall when we pulled the trigger on the other stocks so its no surprise that we lost 20% on our investments. Had we invested in all those stocks at the same time we did HNT, we would likely be in the black, not the red. One thing I've learned through all of this is timing is everything.
The key here is whether or not we think Obama's heathcare reform is going to help or hurt our investment in HNT. Its tough to say now, but it seems like Obama is really pushing healthcare closer toward a model that is more affordable to average american, which in turn would likely result in reduced profits for private healthcare companies such as HNT.
If i remember correctly, the original goal of investing in HNT was to get a stock in our portfolio that was somewhat stable. If that turns out not to be the case, then i think its fair to revisit our investment and possibly weigh other options.
Post a Comment