Three Reasons to Worry and One Theme That Can Outperform: Life Technologies Corp. (LIFE) and More

I would also argue that when a working class man loses the incentive or opportunity to form a family, he then loses a large part of the incentive to work. Similarly when he loses the opportunity to work (see above) hypergamy ensures that his options in the sexual marketplace are limited. These two issues are symbiotic and create significant economic problems, and it’s time the mainstream media started talking about these issues rather than discussing Kim Kardashian’s new hair cut.

Throw in an aging demographic and you have an economy that is gradually morphing itself into one that will have significant problems should it be hit with another recession.

How to Outperform

Of course it doesn’t have to be all doom and gloom. The global and US economy could go through another 10 years without a recession, gradually reduce debt burdens and offer a better quality of living for all. However, in both polar scenarios there are some things in common. One of them is that health care costs need to be reduced, and companies that help to do this will have plenty of upside potential.

In this regard the generic drug manufacturers like Actavis Inc (NYSE:ACT)Mylan Inc. (NASDAQ:MYL) or Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) are set yo benefit. Increasing generic penetration rates is a good way to reduce costs and I have no doubt governments will be pressured to do this in future. Another area of opportunity will be from medical device manufacturers that offer tangible cost reductions. I think Covidien plc (NYSE:COV)’s Minimally Invasive Surgery (MIS) solutions are a good example of this. MIS offers patients better outcomes and consequently reduces patient stays; it saves money.

Another area that could reduce health care costs is affordable human genome sequencing . The leading players here are Life Technologies Corp. (NASDAQ:LIFE) and Illumina, Inc. (NASDAQ:ILMN), and if they can make sequencing affordable then health care costs could come down as individuals will be able to identify and detect indications that can be treated earlier and therefore save costs.

In conclusion, there are plenty of dangers out there, and I will stay hedged for the foreseeable future, but there are still areas of the economy that will outperform irrespective of the long term outcome.

The article Three Reasons to Worry and One Theme That Can Outperform originally appeared on and is written by Lee Samaha.

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