• The top 10 best selling drugs in 2018 generated $90 billion in revenues for large pharma companies
• This comes at a time when many of the top drug makers are facing pressures about drug pricing

AbbVie’s (NYSE:ABBV) arthritis drug Humira remains the best selling drug in the world with over $20B in sales, more than double the second place Eliquis.

Combined, the top 10 best selling drugs in 2018 generated over $90B in revenues. Many of the drug developers, including Bristol-Myers Squibb (NYSE:BMY) and Merck (NYSE:MRK) are facing scrutiny for pricing drugs north of $100,000/year in the USA when in other countries the same drugs sell for a fraction of the costs.

Article by: Mick Ross
Mick is currently a full-time investor and formerly a buy-side analyst (2yrs) covering healthcare companies. Before that, he was a salesperson at a bulge-bracket firm, based in Dallas, Texas. Mick blogs to clarify and synthesize his investment thought process and to elicit feedback; additionally he likes to connect with other investors and swap ideas.

• With upcoming elections, countries like India, China and Nigeria are proposing censorship controls in place to limit connectivity and access for their citizens.
• This is a business risk that may impact operations of global tech giants like Google and Facebook

The internet has been a driving force for global connectivity allowing the rise of today’s tech giants like Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG). Due to the interconnected nature of the internet, these companies have been able to conduct business internationally across all countries.

However, several countries are putting censorship controls in place to limit connectivity and access. With upcoming elections for many countries, worries of foreign tampering have caused some to consider extreme measures.  

• India announced a proposal that would install a Chinese-style censorship ahead of its elections. These proposed rules would allow Indian officials to demand that big web platforms remove content they deem bad for society.
• Russia has considered creating an autonomous internet only for its citizens in the event that the country is cut off from other networks. Citing cyberdefense concerns, Russia has plans to temporarily disconnect from internet as a way to test their defense.
• Congo & Nigeria have used censorship to manipulate elections
• China has long blocked access to certain sites from being accessed within its borders. The use of VPNs to go around these barriers has been deemed illegal.

The isolating tactics by some of these countries goes against the fundamental belief of the open worldwide web. Such moves stall development and prove to be a business risk that the giant tech companies may soon deal with on a global scale.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• The ING International Survey Savings 2019 surveyed 14,695 people in Europe, the US, and Australia, and discovered the majority worry about not having enough money in retirement.

Residents of economically stressed European nations are worrying as they near retirement. More than half of all people, in primarily developed nations, are worrying about their retirement savings. 69% of surveyed Spanish and 67% of French worry about their retirement fund. In the US, that number is 62%.

Approximately half of retirees are taking a hit in their standard of living once they reach their golden age. Again, French are at the top of the list with 69% of surveyed participants saying they do not enjoy the same standard of living in retirement as they had when they were working. In the US, this number is only 30%.

With governments all burdened in debt, it’s widely expected that budget cuts are in the near future. Low saving rates are becoming a norm amongst the middle class who are living paycheck to paycheck. Inequality is becoming a bigger issue. Retirement is not the forward looking event it once used to be.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• Healthcare spending will rise by 5.5% annually over next decade as more people get on Medicare
• In order to cover these added costs, governments will be pressured to raise taxes and private insurers to raise premiums
• Investors of insurance and healthcare companies will benefit from increase in spending

Government health agency, Centers for Medicare & Medicaid Services (CMS), estimates that US health spending will reach $6T over the next decade. From 2018 – 2027, health spending is expected to increase annually by an average of 5.5% every year. This adds up to health spending that will be 70% higher in 2027 than it is today.

Rising income levels, better employment rate and more people enrolling for the federal health insurance program Medicare will cause healthcare spending to rise to 19.4 percent of the U.S. economy by 2027. In 2017, this figure accounted for 17.9% of the US GDP.

What does this all mean?

Well, approximately 47% of the health spending will be funded by government, compared to 45% in 2017. This additional money will have to be sourced from somewhere. The government will be left with two options to cover the higher spending: higher taxes or go into further debt. The likeliest scenario will be a combination of both.

The remaining 43% of health spending will be funded by private insurance companies. That is approximately an extra $1T in spending for insurers, who will likely raise premiums to cover the costs.

Who stands to benefit most?

Increases in healthcare spending will benefit insurers and healthcare companies. With the industry expected to increase by an average of 5.5% annually, the market remains healthy for investors in the following names:

Insurance Companies

1. UnitedHealth Group (NYSE: UNH)
2. Humana (NYSE: HUM)
3. Berkshire Hathaway (NYSE: BRK.B)

Healthcare Companies

• Amgen (NASDAQ: AMGN)
• Merck (NYSE: MRK)
• Bristol Myers Squibb (NYSE: BMY)

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• US breaches sourced from Chinese hackers have resurged since Obama left office
• Hackers are targeting companies with large data on the general public
• Increase in attacks could end up being a tailwind for cybersecurity names

American businesses have seen an increase in attacks from Chinese-based hacker groups. The spike in attacks, which is primarily targeting telecom, pharmaceuticals and hospitality companies, can be traced back to Trump’s presidency, around the same time the two countries started clashing.

The Obama administration reached a truce in 2015 not to conduct cybertheft of trade secrets and intellectual property against one another for commercial gain. With the recent tension between the two nations, this truce appears to have been called off.

Hackers target telecommunications and hospitality firms due to the amount of information they have on the general public and other organizations like governments and businesses. The US government last year attributed to China the hack of Marriott’s Starwood hotel chain, which potentially exposed the personal information of approximately 500 million guests.

The increase in the amount of breaches will bring greater exposure, and potential business, to cybersecurity companies like FireEye (NASDAQ:FEYE) and ProofPoint (NASDAQ:PFPT).

Article by: Mick Ross
Mick is currently a full-time investor and formerly a buy-side analyst (2yrs) covering healthcare companies. Before that, he was a salesperson at a bulge-bracket firm, based in Dallas, Texas. Mick blogs to clarify and synthesize his investment thought process and to elicit feedback; additionally he likes to connect with other investors and swap ideas.

• Nations that vowed to cut oil production have not lived up to their word
• The oversupply of oil has caused the commodity to fall 27% from a peak of $76 in September 2018 to a current price of $56/barrel

There’s a global surplus of oil, and in recent months some of the biggest producers have been promising to cut their output. An alliance of 21 nations known as OPEC+ is trying to remove about 1.2 million barrels/day to provide greater balance to the market.

Among them are OPEC members including Nigeria, Saudi Arabia and the United Arab Emirates, as well as non-members such as Malaysia, Mexico and Russia.

However, only 10 of the nations have achieved at least 100% of their target, while the others have fallen short. Below is a percentage of cutback target reached.

Notably, UAE (94%), Saudi Arabia (130%) and Kuwait (116%) have hit their target while Iraq (-11%), Nigeria (-102%) and Russia (18%) are not even close.

The price of crude oil will continue to struggle with an overflowing supply from countries that refuse to cut production.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• California, the world’s biggest cannabis market, legalized the drug in 2016
• Tax from cannabis is growing each quarter and expected to hit $1B within 3 years

California, the world’s biggest cannabis market, generated $300 million in taxes in its first year of commercial legalization. Legalized in 2016, sales of cannabis began in January 2018. The government collects a sales tax (8.75%), a state excise tax (15%) and a cultivation tax ($9.75/oz). Even with these heavy tax burdens, consumers are buying the plant and in growing numbers.

Quarterly sales in the first year of commercial activity are growing from $80M in Q2 2018 to $103M in Q4.

At this current pace, Califronia is expected to generate $1B from cannabis tax revenue by 2021.

Other states which also legalized cannabis from the prior prohibition have also started gathering tax revenues. Commercial sales got started first in July 2017 in Nevada and fall 2018 for Massachusetts.

Massachusetts may collect $60 million in its first year, which is ongoing. Nevada collected $69.8 million in its first year. Those are tiny fractions of California’s tax total, because California’s sheer size.

With leniency seeming to catch on nationwide, cannabis producers like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) are well positioned to supply the increase in demand.

Article By: Fatimah Aminu
Fatimah is an experienced editor at various financial and consumer publishing houses. She obtained a master’s degree in Publishing from NYU, where she earned a bachelor of fine arts degree. She is currently earning a second masters degree at CUNY online in Psychology. Fatimah covers healthcare, cannabis and technology.

• Rolling out in 2019 & 2020, 5G, the fifth generation wireless system will succeed 4G, which was first introduced in 2009
• At 10GB/second, 5G could end up being 100x faster than 4G
• Citing security concerns, countries have banned largest 5G equipment maker which could slow the advancement of the technology

A full decade after the commercialization of 4G, the next generation of mobile networks will start rolling out globally. With 5G, a full HD movie could be downloaded in seconds or up to 100x faster than the prior 4G version.

5G will also promote the growth of internet of things (IoT). It increases transmission speed and total bandwidth which will be needed to accommodate the added demand from “smart” objects like vehicles, appliances and clothing, all of which are getting online by communicating with one another.

While 5G will bring more devices online, it will also significantly increasing security worries. By 2024, mobile networks will carry 5x the amount of data that they carry today. During this time, more than 22 billion gadgets will be connected to the internet. The potential for security breaches will increase, as a result.

Some nations are worried that Chinese 5G equipment, chips and software could be outfitted to spy on other nations. In recent months, counties like Australia, USA and several European nations have banned Huawei and ZTE Corp from supplying 5G wireless equipment to its telecommunication operators, citing national security.

These bans and restrictions may cause the US and EU nations to fall behind in the global 5G race. Currently, China, South Korea and Japan are expected to lead the 5G rollout. The US-led crackdown on Huawei could place US & EU nations behind.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• EV and renewable energy are progressing, but we are far away from having the necessary technology to make these the widespread standards.

The renewable energy push is real and progressing daily. The global fleet of electric vehicles is expected to reach 125M by 2030. Today there are roughly 3M EVs on the roads globally. Solar energy is expected to become a top source of energy production in developed nations like Germany.

Panels and EVs are reliant on batteries to store the energy once it has been drawn from the sun or recharged from an EV charging stations. This brings up the importance of lithium and energy storage.

Lithium is an essential component of the renewable energy future because of its use in batteries that store electricity and energy. Thanks to its lightweight and highly reactive properties, lithium is a necessity for renewable energy to work on a grand scale. It’s currently used in the batteries of EVs and the battery storage components of solar panels.

When discussing the future of renewable energy, lithium’s scarcity is overlooked. If all the conventionally-fueled cars in the world were replaced with electric cars overnight, the global supply of lithium would be completely depleted in just approximately fifty years. 

While both electric vehicles and renewable energy resources are still very far away from being widespread enough to threaten the world’s lithium stores in the near future, lithium itself is not really the point. It’s just one small problem that exemplifies a larger issue with renewable resources–they are not completely renewable, and we still haven’t discovered the technology to get around that fact.

Renewable energy still relies on several non-renewable resources. Solar panels, for example, can’t be made without the use of finite rare earth elements. Batteries, too, are completely dependent on finite earth-sourced materials for their fabrication.

Bottom line: EV and renewable energy are progressing, but we are far away from having the necessary technology to make these the widespread standards.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

• A barrel of oil has fallen in price, since peaking in October 2018. Yet not all countries have seen prices fall.
• Venezuela has cheapest gallon at $0.01 and Hong Kong most expensive at $7.61

Crude oil has fallen from a 52 week high of $75/barrel in October to just under $55 in February 2019. Each country has experienced a different story, however. Below is a chart showing which countries had the most affordable fuel and which were still feeling pain at the pumps.

Note: The lighter the shade of blue, the lower the cost.

The average price of a gallon is $0.01 in Venezuela but $7.61 in Hong Kong. Keep in mind that the USD is currency used to measure the price, so fluctuations in exchange rates will impact the USD price. In Venezuela’s case, the inflation of their currency, the bolivar, has made the price seem relatively cheaper than it actually is for locals.

Much of the Euro zone is seeing some of the highest prices, due to the fact that the commodity is imported from the likes of OPEC producers.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.