HYBRID VIGOR: VOL 3 ISSUE 12 "Turn, Turn, Turn"

Last week began with another awful terrorist attack; the kind the markets have become sadly inured to. Apparently that is the age we live in—people I respect think the history books decades or centuries from now will refer to this era as the Age of Terror. “One generation passeth away, and another generation cometh: but the earth abideth forever.” (Ecclesiastes 1:4). By the way, that wonderful Old Testament quotation inspired the title of the forerunner to much of today’s apocalyptic and dystopian literature. Earth Abides, by my father’s Berkeley colleague George R. Stewart, is set in Berkeley after a plague wipes out virtually the whole earth. Read it if you can—or listen to the dramatization on the radio series Escape. You can Google it.

In the financial markets these days, we may not have an apocalypse yet, but we’ve had plenty of destruction in some places, notably health care. Much of the damage and fear is coming from Valeant Pharmaceuticals. Not only has the company savaged its most loyal believers, its knock-on effects have undermined much of the health-care sector just as that group seemed to be getting back on more stable footing.

This week guest contributor Will Frohnhoefer addresses the Valeant situation. We’re lucky to have Will participate in our efforts here. He’s a remarkable guy—the rare bird who can speak with depth, knowledge and clarity about topics from alternative energy and bond indentures to classical languages to the Mets and the Wu-Tang Clan. I’ve worked with Will and the only way I could make sense of this hyper polymath was by assuming he only sleeps about 45 minutes a day.

In addition, our stalwart analyst Jeff Alton pitches in some thoughts on AMAG Pharmaceuticals, which has seen its fortunes drop off rather sharply since last summer.

In a low-growth, low-rate world, you might think the health-care sector would be holding up relatively well. This year, you’d be wrong, at least so far. Hopefully this issue will give you some insights as to what’s going on and where some turnarounds might come. 

(This is the cover letter for the subscription-based weekly Hillside's Hybrid Vigor newsletter. For a complete copy, please contact John Anderson at + 1 (646) 712-9289 x 107).