Jim Chanos is skeptical about health care stocks in 2016
From Akin Oyedele at Business Insider:
Billionaire hedge fund manager Jim Chanos is skeptical about healthcare stocks once again.
Without explicitly saying that he’s short the sector, and so betting that healthcare stocks will fall in 2016, he’s called it out as one sector investors should avoid next year.
Chanos was part of Fortune’s latest Investor Roundtable moderated by Ritholtz Wealth Management’s Josh Brown and published Wednesday.
Here’s what he said when Brown asked what investors should do with their money in 2016:
“Well, since I’m a glass-half-empty kind of guy, I’m going to tell the viewers and the readers maybe some places they should avoid. Nobody’s talked about health care, and although health care costs have begun to slow as a percentage of total economic growth and as a percentage of GDP, one of the things that’s happened in 2014 and 2015 is that the actual consumer is paying a higher part of it.
Either because companies continue to cut benefits or because of the ACA [Affordable Care Act], Obamacare, co-pays are higher. And people actually pay more out of pocket. That is having an impact, and it’s going to have a political impact, of course, on 2016 as well. I think the days of real easy unit and pricing growth in health care may be behind us, and those are very elevated prices right now.
I think that, increasingly now, people are going to look at the downside of the ACA.”