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@linter: Your combination provides the following exposure: 50% HC, 22% Tech, and 13% Industrials. You may want to consider an equal mix of PRHSX and POAGX, which would be my preference. But if you want a higher octane, then you may consider a mix of PRHSX 5%, FBIOX 5% and POAGX 10%. In our portfolio, we own 10% positions in both PRHSX and POAGX.
Kevin
Makes sense to me. But also the more I look at it, the more I think that instead of 10/10 maybe the wisest thing is to go PRHSX (or similar: pjp?) 10% and POAGX 5%, especially if we are soon coming to a top or even if we aren't. Has there ever been a meaningful time period when POAGX outdid PRHSX either on the upside or lost less on the down? Heck, maybe the whole thing should go into PRHSX. Even if health corrects in a major way, I still don't see it correcting more than POAGX, right?
@catch22, yes, venture capital, although somehow "venture capital" makes me think of professional investors who invest in these kinds of companies, whereas here I think most of the investors are family and friends of the founders, or people who have connections to insiders such as the Board, which is how I got involved. As we can see from bee's nice graph, healthcare is pretty good at tracking the market on the upside and then does much better on the downside. I'm sure that won't go on forever, but I wouldn't want to fight the trend as long as it continues.
Too many people are over confident. We may have a black swan event coming. As far as I can see we have a confidence game ran by the government. Complete with price fixing. When this bubble breaks and I hope it does sooner than later, no one can get out of the way fast enough. You have healthcare investments in almost every fund you now have. Take a long hard look at your funds.
Too many people are over confident. We may have a black swan event coming. As far as I can see we have a confidence game ran by the government. Complete with price fixing. When this bubble breaks and I hope it does sooner than later, no one can get out of the way fast enough. You have healthcare investments in almost every fund you now have. Take a long hard look at your funds.
Just my 2 cents
If that's the case, I'll guess that it will be the ultimate bubble, given the fact that - what? Lower interest rates to combat it? More QE, perhaps? Devalue the currency? Negative interest rates/NIRP? This is inflate or bust - QE in Japan (which isn't working because it doesn't fix the underlying problems but hey who gives a (bleep), send the yen lower because importing energy to a country with no natural resources wasn't already expensive enough), some guessing that QE is going to start in Europe and you'd best believe that if the market here drops enough, it'll be on the table again. If not QE, some other financial engineering.
You have healthcare in every fund, but every fund isn't going to trade with the defensive nature that healthcare often has. I'll stick with healthcare and if given the opportunity, maybe I'll add even a little more here-and-there.
Looking at Standard Deviations/Sharpe Ratios over the past 1-, 3- and 5-year periods, PRHSX (14.28/2.21, 13.78/2.39, 15.31/1.78) clearly beats POAGX (15.15/1.15, 14.51/1.71, 17.42/1.31). So I think that either a 10%/5% mix of PRHSX/POAGX, or even a 15%/Foothold mix makes sense to me. In the long run, I am confident that Americans are more willing to shell out money for HC/Biotech (PRHSX) than a mix of HC and tech (POAGX).
Healthcare is a pretty diverse sector. It may be worth treating healthcare and biotech differently. There are young companies and old ones. Medical devices, drug companies, big companies, and small ones...
the better you know your investments the more comfortable you will be (whether healthcare is five percent or twenty five percent.)
I don't have a dedicated healthcare fund, but I have always wanted one. Good discussion, thanks for everyone's thoughts. FWIW
It has been a good discussion indeed. There are many facets of healthcare including pharma and medical supplies which are the old school but still performing well, and the future stocks of biotech, bionics and some other fascinating areas. Nano and molecular therapies are just starting and maybe in ten or twenty years will be mainstream. For a long term holding these are sure bets.
In some cases it is hard to separate biotech and healthcare as big pharma has and will continue to buy out companies that hold promising therapies. They have the big pockets so to speak.
Comments
Just my 2 cents
Regards,
Ted
You have healthcare in every fund, but every fund isn't going to trade with the defensive nature that healthcare often has. I'll stick with healthcare and if given the opportunity, maybe I'll add even a little more here-and-there.
Looking at Standard Deviations/Sharpe Ratios over the past 1-, 3- and 5-year periods, PRHSX (14.28/2.21, 13.78/2.39, 15.31/1.78) clearly beats POAGX (15.15/1.15, 14.51/1.71, 17.42/1.31). So I think that either a 10%/5% mix of PRHSX/POAGX, or even a 15%/Foothold mix makes sense to me. In the long run, I am confident that Americans are more willing to shell out money for HC/Biotech (PRHSX) than a mix of HC and tech (POAGX).
Kevin
the better you know your investments the more comfortable you will be (whether healthcare is five percent or twenty five percent.)
I don't have a dedicated healthcare fund, but I have always wanted one. Good discussion, thanks for everyone's thoughts. FWIW
In some cases it is hard to separate biotech and healthcare as big pharma has and will continue to buy out companies that hold promising therapies. They have the big pockets so to speak.