Tag Archives: investment

Health Care Offers Huge Investment Opportunity

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Venture investor Fred Wilson sees the digitization of the health care sector as one of the great investment opportunities we’re likely to see:

Mary Meeker’s slide deck addressed this is bit. Here are a few of the big points from it:

  • Healthcare is now $2.8 trillion in the US, which represents 17% of GDP
  • Healthcare is being consumerized
  • Healthcare is being digitized
  • Digital Health Venture Investment was $1.9bn in 2013 (out of a total of $24bn)

We are looking for networks of users, patients, doctors, and other stakeholders in our health care who can transform the way health care is delivered. We only have one game plan at USV and look to play it in every market opportunity we see.

I am pretty certain the intersection of the Internet and mobile, the digitization of the health care system, and a desire for people to take more control over their health is going to be one of the biggest investment opportunities we will see in my lifetime. And its game on.

As we’ve seen here in Winston-Salem the process of digitization won’t always be pretty. We’ve seen a lot of news regarding the problems our large health care networks, particularly Wake Forest Baptist, are experiencing as they try to (finally) catch up with almost every other industry in the use of information technology. While these are very large problems, and people have lost their jobs as a result, they almost certainly have more to do with terrible implementation strategy from executives than with the technology itself. In the long run those providers should realize huge gains in efficiency, and the data they’re accumulating will provide untold numbers of opportunities for entrepreneurial companies to create products and services that benefit providers and consumers alike.

It’s about damn time and it’s great to see that some smart money people are ready to put their money behind some of these initiatives.

This Ain’t Your Dad’s Wall Street

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Mark Cuban does a great job explaining why Wall Street is no longer the economic engine it once was:

Over just the past 5 years, the market has changed. It is getting increasingly difficult to just invest in companies you believe in. Discussion in the market place is not about the performance of specific companies and their returns. Discussion is about macro issues that impact all stocks. And those macro issues impact automated trading decisions, which impact any and every stock that is part of any and every index or ETF.  Combine that with the leverage of derivatives tracking companies,  indexes and other packages or the leveraged ETFs, and individual stocks become pawns in a much bigger game than I feel increasingly less  comfortable playing. It is a game fraught with ever increasing risk.

So back to the original question. What business is Wall Street in ?

Its primary business is no longer creating capital for business. Creating capital for business has to be less than 1pct of the volume on Wall Street in any given period. (I would be curious if anyone out there knows what percentage of transactions actually return money to a company for any reason). It wouldn’t shock me that even in this environment that more money flows from companies to the market in the form of buybacks (which i think are always a mistake), than flows into companies in the form of equity.

He then offers up some ideas about how to return Wall Street to its original role:

My 2 cents is that it is important for this country to push Wall Street back to the business of creating capital for business.  Whether its through a use of taxes on trades(hit every trade on a stock held less than 1 hour with a 10c tax and all these problems go away), or changing the capital gains tax structure so that there is no capital gains tax on any shares of stock (private or public company) held for 1 year or more, and no tax on dividends paid to shareholders who have held stock in the company for more than 5 years.  However we need to do it, we need to get the smart money on Wall Street back to thinking about ways to use their capital to help start and grow companies. That is what will create jobs. That is where we will find the next big thing that will accelerate the world economy.  It won’t come from traders trying to hack the financial system for a few pennies per trade.