Posted on 08/24/2009 7:01:34 PM PDT by FromLori
Short seller Jim Chanos is bearish on major pharmecutical companies. Warren Buffett is long pharmaceuticals. This creates the interesting situation of the top long investor, Buffett, versus the top short investor, Chanos, being on opposites side of a major trade.
Buffett owns more than 3.9 million shares of Sanofi Aventis and he holds 1.51 million shares of GlaxoSmithkline.
Chanos recently told an Australian radio station: The US healthcare system is probably the most interesting large group of companies that are heading for major problems that we've seen in a long, long time. Healthcare is growing now at about 10 per cent per annum in the US top line,versus 3 per cent for the economy. As someone with a sharp pencil and an eye forthis kind of thing, this can't last. It may not happen right away, but Obamacare will destroy the pharmaceutical industry. It appears that Chanos gets this. Does Buffett's occasional left-wing thinking blind him to what a nationalized healthcare system will do to the development of new drugs and pharmaceutical revenues? Big pharma may think their lobbyists will have things under control if Obamacare is implemented. They have no clue. Nationalization will mean bureaucracy, politicization and slow payments, for starters.
buffet should give all his money to the government
Big Pharma has a good chance to benefit bigtime from obamacare.
A quick prescription pad will be how doctors will be able to get through the long queues a socialized system will bring.
In addition, research and development costs will be kept down- the new socialized medical system won’t be quick to approve new treatments making little sense in developing them.
Big Pharma will have a bigger market, and less costs- if they can keep prices stable they can reap a big windfall.
Except that Obama can’t get anything passed, and the fallback position will abandon the deal he already made with the pharmas, and leave them better off than they were before. I say this round is going to go to Buffett, not to Doc.
Buffett’s predictions over the past six months about where our economy was heading have made him a laughingstock. Nobody pays attention to this guy anymore nor whould they. He lost big time as opposed to Soros on the other hand. Buffett is like Cassandra the mythologival prophet that nobody believed her predictions. Buffett should be in a nursing home now and never given any sharp instruments; he’s gone senile.
Good point
I once liked Buffett but he is scum. He is almost as bad as Soros.
James Chanos is a good guy and he had nailed Enron’s clowns Lay, Skilling and the creepy CFO. Enron was a far far bigger Clinton deal than a Bush deal. Bush was smart in avoiding any bailout of totally corrupt Enron.
I think Buffett’s eating cheeseburgers and drinking Cheery coke fried his brain years ago.
I think he gives out disinformation on what he is a really doing. I saw Chanos interviewed and saw his testimony to Congress about Enron. He is a bright guy and I admire him.
Hooray for whistleblowers!
By the way, speaking of whistleblowers, Michelle Malkin’s new book is dedicated to the ACORN whistleblowers!
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