As a follow-up to my previous article on the health care bill and how it relates to the market, I wanted to update my readers who are not participating in the live chat today. We can expect the debate to continue in regards to how beneficial or not the health care bill is. However, for the investor, I think it’s clearly bad news. This bill will be funded mainly by the extension of Medicaid tax, capital gains taxes, etc… Businesses already forecast their health care expenses to rise significantly which will keep pressure on them and obviously hurt investors.
This morning we are not seeing much concern for the bill being passed but it is not as if we didn’t know this for a while now. Talking to other large investors, it seems the consensus is that the bill won’t negatively hit the investor right away. Rather, it would take a little time after implementation to fully see and feel the pain. With that being said, we aren’t seeing the impulsive emotions bringing the market down with an overly bearish sentiment this morning. That is great news for now but I’m not going to relax as the discussions on the impact of the bill are far from over. I’ll still be keeping a close eye on the action over the weeks to come and be protective over my capital in case we see a breakdown in the market.
In portfolio news, I’ve been adding to Sirius XM (SIRI) and Cord Blood America (CBAI) this morning. CBAI has had strong support around $.009 and SIRI dipped briefly under $.80 to where I updated on my SeekingAlpha Stock Talk (which updates my twitter) that I was buying. SIRI has dipped because of the recent letter stating they are in jeopardy of being delisted. This news/letter is not a shocker and SIRI laid out their gameplan on the conference call last earnings. It does nothing to change my thesis at the moment so I took action on this dip to further add to my position. Now we have a nice bounce to $.85 while I’m writing this. I wouldn’t be surprised if CBAI dips below $.009 towards $.008 and would only be concerned if they break under $.008 as that was a major support level the other week. I’d be a buyer between those two prices. I expect both to appreciate over the 30 to 45 days per my recent articles on each. At current levels, I still consider both a favorable risk/reward play over the next month.
I have some new stocks on my radar and will update on them more over time. Good luck out there.
Mike
Random News: Cell Therapeutics (CTIC) failed miserably in their FDA panel review today, losing a unanimous 9-0 decision against Pix. I expect the FDA to align with the panels recommendation when they meet in April. I disagree with the decision for those who are already in the late stages and have little hope but it looks like the entire panel disagreed with me. When trading resumes for CTIC (frozen at moment), I expect the price to drop fast and furious.
At the time of publication, Kudrna was Long CBAI and SIRI but positions can change at any time
