This column was originally published on RealMoney on Nov. 8. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
Right now, right here, at these levels in the health care cost containers and the drug stocks, you are factoring in either a Bush capitulation on Medicare Part D as part of the desire to placate the Democrats, or you are believing that the Dems have enough to override a Bush veto.You are also presuming that all of Congress is anti-drug.
Not one of those scenarios, I believe, will come true. Not one.
Think back to just a couple of years ago, when importation of drugs from Canada was supposed to be the drug killer. It was not the president who stopped that. It was the agencies in conjunction with both the Democrats and the Republicans.
Every once in a while, we have heard that we will have price controls for drug stocks. Every once in a while, we have heard that there will be rollbacks on the HMOs' price increases. We have never been willing to put controls on those drug stocks, as the drug lobby is way too powerful for that. And the HMOs? Who the heck is going to replace them? If they couldn't be replaced before, under Hillary and Bill, how will it happen now?
The people who are selling these now must be expecting a whole host of downgrades. I would be nibbling now, but I bet you won't get a big downdraft from here.
Johnson & Johnson
are down almost $2 with tons of stuff that's unregulated?
is down $2.25 despite all that it has done to grow and grow fast?
with several stable businesses and a nice yield (like GSK)?
Sorry, it is beginning to be too much.
Yes, an overreaction.
At the time of publication, Cramer was long Johnson & Johnson.
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