Health Care

5 for 5

I normally leave these types of topics for Mel to post about but this one hit close to home. Longer life expectancy and healthy habits is something that is not new, but now has a long-term study confirming what most already knew from using common sense. Ever since seeing my first Arnold Schwarzenegger book (senior year in college) I have religiously followed the 5 habits mentioned in a Harvard School of Public Health study. There is no one I know who has been a health zealot for a longer period than me. But, some 40 years later, being eventually proven right that living a healthy lifestyle is the right way (if you want to extend your life), with the prospect of a potential 30+ more years I am seriously doubting whether I want those additional years. Don’t get me wrong, I have no death wish but without knowing the quality of those future years I am now questioning whether I should have just had that slice of cheesecake rather than the carrot sticks and rice cakes 😊.  As I get older it has become clear that the focus has shifted to quality from quantity.

Here is a summary of the Harvard study findings …

Maintaining five healthy habits — eating a healthy diet, exercising regularly, keeping a healthy body weight, not drinking too much alcohol, and not smoking — during adulthood may add more than a decade to life expectancy.  It was also found that American women and men who maintained the healthiest lifestyles were 82 percent less likely to die from cardiovascular disease and 65 percent less likely to die from cancer when compared with those with the least healthy lifestyles over the course of the roughly 30-year study period.

The study is the first comprehensive analysis of the impact that adopting low-risk lifestyle factors has on life expectancy in the U.S. Americans have a shorter average life expectancy — 79.3 years — than almost all other high-income countries. The U.S. ranked 31st in the world for life expectancy in 2015. The new study aimed to quantify how much healthy lifestyle factors might be able to boost longevity in the U.S.

Harvard Chan researchers and colleagues looked at 34 years of data from 78,865 women and 27 years of data from 44,354 men participating in, respectively, the Nurses’ Health Study and the Health Professionals Follow-up Study. The researchers looked at how five low-risk lifestyle factors — not smoking, low body mass index (18.5-24.9 kg/m2), at least 30 minutes or more per day of moderate to vigorous physical activity, moderate alcohol intake (for example, up to about one 5-ounce glass of wine per day for women, or up to two glasses for men), and a healthy diet — might impact mortality.

For study participants who didn’t adopt any of the low-risk habits, the researchers estimated that life expectancy at age 50 was 29 years for women and 25.5 years for men. But for those who adopted all five, life expectancy at age 50 was projected to be 43.1 years for women and 37.6 years for men. In other words, women who maintained all five healthy habits gained, on average, 14 years of life, and men who did so gained 12 years, compared with those who didn’t maintain healthy habits.

Compared with those who didn’t follow any of the healthy lifestyle habits, those who followed all five were 74 percent less likely to die during the study period. The researchers also found that there was a dose-response relationship between each individual healthy lifestyle behavior and a reduced risk of early death, and that the combination of all five healthy behaviors was linked to the most additional years of life.

July 2018 Charts on the Move Video

US stock markets are leading the rest of the world higher.  The intermediate term rally in the dollar has either reversed or put the case for over-weighting foreign investments on hold. I think we muddle through the summer/autumn months and then rally into year-end.  Anyone thinking the same? 

July's Charts on the Move video can be viewed at the link below

https://youtu.be/lmdfJ5p16es

 

 

Nesting

When looking for investment opportunities, some of the most interesting setups can only be found when looking across multiple time frames and is why I find it a critical step. If something looks interesting short term but is in a long term downtrend, it is likely that opportunity will only be a winner if managed as a short term trade.  But when something develops in a short term view and is in alignment with the longer term, it not only increases the probability of success but also the expectation of large gains. These are borne out when a short term pattern is nested inside a much larger pattern.  A good example is what is occurring right now with Jazz Pharma, JAZZ.

The daily chart below shows price is ready to breakout above the neckline of this almost 10 month inverse head and shoulders pattern. Notice how price has held above the 200 day moving average, when its support was tested twice in April and May. When combined with the fact that RSI momentum is rising and is within the bullish zone, the weight of the evidence says a break above the blue horizontal neckline provides a compelling upside target in the 191 area above, some 19% higher.  This looks like a great set up.

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When looking at the same investment on a weekly time frame something very interesting stands out as you can see below. Nesting. The inverse head and shoulders pattern that I showed above (blue) is actually the right shoulder of the same but much bigger inverse head and shoulders (green) pattern. Notice how the blue (daily time frame) target just so happens to be at the prior 2015 high. This is not unusual. That is where resistance exists. Those that purchased at or near that level in the past and are still holding will provide a huge amount of share supply which will likely either slow or stop a quick move above that level. They are currently underwater and as such, the normal desire to “break even” will induce many to sell, even though now seems like a time to accumulate.

san ramon bay area retirement planning fee only certified financial planner CFP weath manager - JAZZ - 5-14-18 weekly.png

The upside target for the larger (green) pattern has an even more attractive target near 225, doubling the smaller pattern’s return. When nesting occurs like it has here, it sets up the possibility not only for greater returns for the opportunity but also extending its holding period, a benefit for those wanting to be less active. 

Regeneron – The End of the Bull?

Regeneron, REGN, makes a compelling example of allure of biotech stocks for investors. After breaking out higher in 2009 from a multi-year base, it’s stock went on to post gains of more than 5000% in 5+ years, peaking in August of 2015. Since that time, it has declined almost 50%, something difficult for buy-and-hold investors to experience, unless they got in real early and are still positive on their positions (which only makes it slightly less difficult).

Notice how in 2015 the stock eventually fell below its rising 200 day moving average, bounced off of (green) support and made one more attempt to move higher. That next move higher failed and made a lower high and has now broken below the black uptrend support and once again fallen below (a now falling) 200 day moving average.  Price sits at the bottom of support and a continued probe lower and hold below will likely be the trigger that REGN’s uptrend is done (as in put a fork in it) and to expect much lower future prices. Take note and memorize what has occurred as this is a classic long term topping pattern that most all investments mirror when their bull run eventually ends.     

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What You Want vs. What You Need

The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” - John Maynard Keynes

 “Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” ― Sam Ewing

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We all understand the destructive effects of inflation has over time but what happens when inflation is as low as it has been over the past 20 years? What you say, inflation has not been low? Your personal experiences says otherwise? Our Government’s Bureau of Labor Statistics (BLS) begs to differ. Prices on average over the past 20 years has been 55.6% which works out to be an annualized rate of ~2.02%. One of the lowest 20 year periods …. Ever. So who’s right?

 The problem as we uncover when peeling back the onion, is how the BLS calculates its numbers. To avoid going down that rat hole into a hornets nest, it’s safe to say that inflation is the sum of the prices of things that are rising and the rest that are rising more. Unfortunately, as it works out, the things that you want are rising while the things you need are the things that are rising more. This has never been so apparent than in the most recent 20-year data presented in the chart below.

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 One scrutinizing the chart may point out that food and beverage prices (a need) have been rising at an “average” rate. The devil is in the details here too. Looking under the hood you will see the things that are healthier (unprocessed and natural foods) are rising at a much faster rate than things like fast food. Oh and while I do have some millennial readers, no, cellphone service is NOT a thing you need.