How to Bet Big Against Obamacare

You can put money on your political beliefs and invest in (or against) the health care law’s success.

NEW YORK, NY - JANUARY 27: Traders work on the floor of the New York Stock Exchange on January 27, 2014 in New York City. Following a drop of over 300 points on Friday, U.S. markets stabilized in early trading January 27, with the Dow Jones industrial average and the S&P 500 up slightly.
National Journal
Clara Ritger
Add to Briefcase
See more stories about...
Clara Ritger
Jan. 28, 2014, 8 a.m.

Think Obama­care is go­ing to fail? Now you can you put your money where your mouth is.

A Sil­ic­on Val­ley start-up called Mo­tif In­vest­ing has cre­ated a way for in­vestors to es­sen­tially bet on the law’s fail­ure: It’s selling an in­vest­ment port­fo­lio full of firms that stand to reap big be­ne­fits if the law is re­pealed or col­lapses in im­ple­ment­a­tion.

It is also of­fer­ing an op­tion for in­vestors of the op­pos­ite per­sua­sion: a re­cip­roc­al port­fo­lio of com­pan­ies that stand to prosper un­der the new health care re­gime.

Mo­tif In­vest­ing used al­gorithms to pick a sub­set of stocks in the in­dex, giv­ing con­sumers who in­vest in Obama­care a cross-sec­tion of the in­dus­tries that will profit from more in­sured Amer­ic­ans and the cost-con­tain­ment pro­vi­sions of the health care law. Con­sumers who in­vest in “Re­peal Obama­care” get a se­lec­tion of com­pan­ies in in­dus­tries that faced big cuts from the law.

The “bet­ting-on-fail­ure” bas­ket of stocks is heavy in­to com­pan­ies that do dia­gnostics, cre­ate med­ic­al devices, and provide as­sisted liv­ing for seni­ors. The pro-Obama­care port­fo­lio is made up largely of phar­ma­cies, hos­pit­als, gen­er­ic drug com­pan­ies, and elec­tron­ic med­ic­al re­cord com­pan­ies.

“There is bi­par­tis­an sup­port around re­peal­ing the ex­cise tax on med­ic­al devices,” said Hardeep Walia, CEO and former Mi­crosoft ex­ec­ut­ive. “So there doesn’t have to be a full re­peal to see a be­ne­fit to some of these in­dus­tries.”

In the­ory, both stock groups could do well at the same time. But the most in­ter­est­ing trend Walia has ob­served is how the ex­pir­a­tion of the drug pat­ent cliffs and the Af­ford­able Care Act’s pro­vi­sions pro­mot­ing lower drug costs have caused gen­er­ic-drug stocks to soar.

Mo­tif In­vest­ing of­fers oth­er spe­cial­ized port­fo­li­os, such as Gay-Friendly Com­pan­ies, Kings of K Street (com­pan­ies that spend the highest per­cent­age of their money on lob­by­ing), and No-Glass Ceil­ing (wo­men-led cor­por­a­tions).

“Do wo­men make bet­ter CEOs?” Walia asks. “Are gay-friendly com­pan­ies more likely to suc­ceed than non-gay-friendly com­pan­ies?”

You can bet on it.

What We're Following See More »
SAYS TRUMP JUST ATTACKING REPUBLICANS
Former Top Aide to McConnell Says GOPers Should Abandon Trump
12 hours ago
THE LATEST
“YOU CAN’T CHANGE HISTORY, BUT YOU CAN LEARN FROM IT”
Trump Defends Confederate Statues in Tweetstorm
16 hours ago
WHY WE CARE
CEOS HAVE BEEN FLEEING FOR THE EXITS
Trump to End Business Councils
1 days ago
THE LATEST
FROM STATEMENT
McConnell: “No Good Neo-Nazis”
1 days ago
THE LATEST
NO FORMAL LEGISLATIVE EFFORT
CBC Members Call for Removal of Confederate Statues from Capitol
1 days ago
THE LATEST

"Members of the Congressional Black Caucus are reviving calls to remove Confederate statues from the Capitol following the violence at a white nationalist rally in Virginia." Rep. Cedric Richmond, the group's chair, told ABC News that "we will never solve America's race problem if we continue to honor traitors who fought against the United States." And Mississippi Rep. Bennie Thompson said, “Confederate memorabilia have no place in this country and especially not in the United States Capitol." But a CBC spokesperson said no formal legislative effort is afoot.

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login