The Markets Go Mad for Obamacare
“A new online broker, Motif Investing, is offering Obamacare’s friends and foes alike a chance to put their money where their mouth is. … Motif allows customers to bet on narrowly tailored concepts. ‘A lot of people think conceptually about investing,’ he says. ‘We take ideas and translate them to what we call a ‘motif’—an intelligently weighted basket of up to 30 stocks, built around an idea that people can understand.’ Examples of these baskets include Chinese solar, 3D printing, and ‘caffeine fix’—an assortment of coffee, soda, and energy drink companies.
Two of the hottest motifs right now are Obamacare and repeal Obamacare …. They represent, respectively, the idea that the law will succeed and that it will fail. The Obamacare motif is made up of hospitals, generic-drug makers, pharmacy-benefit managers, and companies specializing in electronic medical records, all of which stand to gain from the Affordable Care Act’s emphasis on cost control and its guarantee of payment. …
Repeal Obamacare is composed of companies that would benefit from the law’s demise, mainly medical device manufacturers, which the ACA saddles with a 2.3 percent excise tax; assisted-living and home health-care providers, which will suffer from reduced Medicare and Medicaid reimbursement rates; and medical diagnostics equipment and services providers, which may encounter reduced demand as a result of the law’s efforts to curb unnecessary testing.”