Jobs, jobs, jobs.
That’s what’s bothering me more than anything in this "recovery." I wrote about the job situation extensively on Friday and the WSJ has been kind enough to chip in and provide us with a kick-ass chart that sums things up very nicely:
Now keep in mind that this is before Friday’s FANTASTIC news that we added 162,000 jobs. Why, at this pace we’ll have caught up on our 8,364,000 job losses in just 51 months! Oops, I forgot to factor in the 125,000 jobs we need to add each month just to stay even. Rob Reich points out that we failed to create (or save) 2.7M jobs needed just to keep up with population growth in the past 2 years and, frankly, if you look at the whole decade, you get this very ugly image of jobs in America:
Over the past 10 years we’ve added 30M more people (10%) to the US population than we have jobs – that can’t be good… Obviously the solution is either to creat more jobs or start killing people – which solution do you think corporate America is closer to?
I’m not joking (I wish I were) but notice the only place we ARE creating jobs is in the Health Care sector and what Fox lovingly refers to a the "Recession-Proof Death Industry." Baby Boomers are aging and they need all sorts of end-of-life care for the 77M that were born between 1946 (64) and 1964 (46). Already we have 2,339 of them dying each day and that number is expected to double over the next decade. We’ll get some good data with the new census but we should take a look at long-term investment opportunities in the big funeral homes like Stewart Enterprises (STEI), Service Corporation International (SCI), Carriage Services (CSV) and Stonemor Partners (STON). I always encourage my kids to buy stocks they are going to use – as I just officially joined the Boomers myself, perhaps it’s a good time to follow my own advice!
Another way to take advantage of our aging population is in the robust field of spare parts. I was disturbed to read a NY Tmes article that points out that there are no guarantees in the $6.7Bn annual hip and knee replacement industry – and that’s just the parts – add in the operation and we’re talking $20Bn a year! In fact, its great for the manufacturer when an existing part fails because they tend to lead to "rush" jobs that are billed at premium prices to replace the defective joints they sold last time.
“Companies have dumped these costs into the health care system,” said Dr. Lawrence D. Dorr, an orthopedic surgeon in Los Angeles who two years ago took the unusual step of drawing attention to one problematic hip device. “They don’t have any skin in the game.” “Because of the multifactorial nature of the survival of an implant in a particular patient, revision surgeries are to be expected,” said Zimmer, using the medical term for a replacement operation. “Therefore, we do not provide free or discounted replacement revision products when one of Zimmer’s implants needs to be revised.” ZMH, SYK and JNJ are the big public players in this game.
IN PROGRESS
