Value Investing News - LLY - Comments

6 Investment Ideas for the ‘Obamanomics’ Era

MurrayRothbard — Thu, 06 Nov 2008 11:33:18 -0500

Martin Hutchinson analyses what a Democrat landslide means for stock market investing. He says nuclear and clean energy stocks, auto manufacturers, generic drug producers and muni bonds are a “buy”. But fossil fuel companies and financial institutions should be avoided.

Yeah I Like These Kinds of Stories

Geoff — Thu, 08 Mar 2007 15:14:05 -0500

Sometimes it's worth taking a longer view of industries. The economics of certain industries are just so different - it's something investors need to learn.

You can't outrun the mistakes of your dumbest competitor, just ask the airlines. The propsects of tremendous growth and hitting it big sometimes lead to capital being pushed into industries that (from a business perspective) already have more than enough.

Of course, everyone outside the industry gets to benefit from it. We've all benefited from profitless airlines. As I write this I'm benefiting from all the money that's been poured into the telecom area. It used to be you had to pay very high monthly fees for dial-up internet access. Now, I have high speed access for less than $0 when you consider my phone, cable, and internet together cost me much less than they did separately. For this, I have the fierce competition between Verizon, Cablevision, etc. to thank.

Of course, my hometown used to be filled with thousands of AT&T employees (it was the world HQ) - and they're all gone.

Competition is a funny thing. And growth is an even funnier thing. Investors chase the prospect even when (like in these situations) it hasn't been all that profitable in the aggregate.

I'm glad this one got refreshed.

Nick — Thu, 08 Mar 2007 14:31:53 -0500

"Consider the following observation; from the year 1975 through 2004 the biotech industry as a whole has seen an increasing trend in sales, but total operating income before depreciation is essentially zero."

-Wow! I wouldn't have guessed that...

"So not only is big pharma more efficient at producing and selling, but the gap is increasing, not narrowing. There is no evidence that the biotech industry is learning."

...or this. Then again, I live in the biotech capital of the world. Or so it seems.