Rotation Continues...

Since my last post energy has sold off and healthcare has taken off. I am taking my victory lap and reducing my biotechnology exposure and have started nibbling on energy again. Biotechnology seems overdone on the upside and energy seems overdone on the downside.

Why I Like Healthcare

I really like health care investments (pharmaceuticals, biotechnology, devices) in this volatile trading environment. Inevitably, people need to re balance their sector exposure when one sector performs well and becomes overweight in their portfolio (read: energy companies). I think the petro dollars made by re balancing away from energy will eventually find their way into health care companies. I think people will shun away from the long bond (a traditional safe play) because of inflation concerns. Who wants the coupon when it won't even fill up your SUV's gas tank?!?! Health care is traditionally a defensive play so it should do well in this tape. Furthermore, demographics should support health care companies going forward with the aging of the baby boomers. Demand for artificial knees should be high starting now!