Posted by Jay Livingston
The standard conservative line on Obamacare was that it would be a disaster. They still insist that it’s a disaster, despite much evidence to the contrary. I wonder if they put their money where their scowling mouths were.
As Alex Tabarrok says, a bet is a tax on bullshit. Did they bet against healthcare and insurance companies? Probably not. But if they had, their frowns would not be turning to smiles. Just the opposite.
A hedge fund, Glenview Capital Management, did bet, but they bet on Obamacare, not against it. In case you missed the Wall Street Journal’s story on this, here’s the opening:
| Glenview Capital Management LLC made a bold decision when President Barack Obama’s health-care overhaul was rolling out: Bet on it. The result has been one of the most successful hedge-fund wagers in recent years. New York-based Glenview has realized and paper gains of more than $3.2 billion since it started making investments in hospitals and insurers four years ago, according to a Wall Street Journal analysis of securities filings. |
The idea was pretty simple. Obamacare was going to bring millions of new clients to the healthcare markets. Insurers would have more customers. Hospitals would have more patients whose bills would be paid. Less easy to foresee were the mergers (Athem and Cigna, Aetna and Humana) that added even more to the value of the investments. The bottom line: “Glenview’s flagship fund has averaged a 26% annual return since the beginning of 2012 . . . much better than the industry’s 6% average.”
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