4D·

Position further expanded

Now more than ever ...

Even after today's news, the risk/reward ratio remains good for me. UnitedHealth is working very openly with the Department of Justice, apparently they have nothing to hide.

24.07

UnitedHealth

Bought at €248.50

17 Comments

Der Spekulant@Derspekulant1

Wirecard also did back then

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Pawfolio@Pawfolio

@Derspekulant1 the comparison is rather far-fetched. 😁 29.07 will be exciting.

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Der Spekulant@Derspekulant1

@Pawfolio why ?

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Investfamily@Investfamily

@Derspekulant1 frag Google!

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HumanWithCap@realarb

@Pawfolio As an insurer in the USA, UnitedHealth is not as easy to imagine without as Wirecard. For example, Berkshire has invested in UnitedHealth, but not in Wirecard.

The fundamental figures for UnitedHealth are right and are even very attractive at this price. I'm holding for the next 10 years.

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Pawfolio@Pawfolio

@realarb Yes, it's like comparing apples and oranges...
Wirecard was a bouncy castle, United Health is an amusement park. 😁

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Der Spekulant@Derspekulant1

@Pawfolio @realarb
Interesting points, but I think you underestimate the scale of the problem.

* The Wirecard comparison was deliberately provocative to point out a parallel in behavior: Investors believing a corporation's PR statements more than judicial investigations. It was never about a comparison of business models.

* We're not talking about a small investigation here. The US Department of Justice (DOJ) is conducting a massive antitrust investigation. There are allegations that UNH is systematically undermining competition through its subsidiary Optum. This is not a sideshow, this is an attack on the heart of the growth strategy.

* The reference to Berkshire is an excellent example - but for my thesis. Berkshire Hathaway completely liquidated its UNH position in Q1 2024. Buffett and Munger cashed out. Why would we as private investors want to be smarter?

To pick up on your metaphor: No one disputes that UnitedHealth is an "amusement park." But the DOJ's question is whether the park is using its monopoly position to charge $50 for cotton candy and push all the other booths out of the park. A break-up or a billion-dollar fine would be the end of profitable amusement.

The fundamental numbers are only good until they're not. And a DOJ investigation of this magnitude is the most likely catalyst to change that.

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Pawfolio@Pawfolio

@Derspekulant1 You said it, why should we as private investors be smarter than Berkshire? We are not.

However, we are private investors and can take a different risk. We also don't have to justify ourselves to shareholders, board members and banks.
As long as the burden of proof lies with the DOJ, I see the risk/reward ratio on my side.
I am convinced that the current speculation about possible future penalties etc. will remain in the subjunctive, but that the free cash flows will remain indicative. 400,000 employees and 50,000 customers will then be worth more than past mistakes.

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Der Spekulant@Derspekulant1

@Pawfolio
An interesting attempt to turn the tide. But the argument that we as private investors can take a "different risk" is precisely the psychological trap that many fall into.

The question is not whether we can take a different risk, but why Berkshire is selling. They are not selling out of pressure to justify themselves. They are selling because their analysis - with resources we can only dream of - has shown that the risk/reward ratio is no longer right. They see a fundamental, long-term threat to the business model.

The market is not waiting for the DOJ's "burden of proof". It is now pricing in the uncertainty and tail risk. That is the reason for the depressed share price. Waiting for the verdict means taking on all the risk of uncertainty.
A small but crucial correction: UnitedHealth does not have 50,000 customers, but serves over 152 million people. It is precisely because they are so gigantic and systemically relevant that the anti-trust investigation is so explosive.

It is potentially about breaking up the most profitable part of the group (Optum).
It's not about whether UNH will go bankrupt tomorrow. It's about whether the highly profitable business model can still exist in 5 years' time. That is the risk that Berkshire no longer wanted to take. And that does make me wonder why I should do it.

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Pawfolio@Pawfolio

@Derspekulant1 I don't need to turn a page because I don't need AI to write comments 😉
The 50 million customers are the American customers who are more likely to put pressure on the DOJ. You'll probably have to wait another year before Chat GPT can do the same.

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Der Spekulant@Derspekulant1

@Pawfolio
Let's leave the personal comments aside and stick to the facts.
The exact number of customers is not the decisive point. The logic of your thesis is.

You argue that millions of customers would put pressure on the Justice Department to protect UnitedHealth. The question I have is: why would American citizens defend a company accused of driving up their health care costs and insurance premiums through anti-competitive practices? Experience has shown that political and public opinion tends in the exact opposite direction.
In the end, the original analysis remains:

On one side is a massive antitrust investigation by the DOJ and the strategic, complete exit of one of the world's most thorough investors, Berkshire Hathaway.
On the other side is the hope that the investigation will not have any serious consequences.
I have decided for myself which side of the risk analysis has the more solid basis.

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