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UnitedHealth Group Incorporated Message Board

  • yrufat300 yrufat300 Nov 13, 2004 12:47 PM Flag

    Spitzer, others now poised to go deep

    into insurance industry beyond broker issue. Claims reserving, smoothing just the beginning.

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    • "profit growth of UNH seems designed by an engineer. Suspiciously even, no?"

      Suspicious? Not necessarily. The street analysts demand predictability. UNH gives them that. What does that really mean? Is it veniality or competence?

      I think the attitude one takes toward investing in a company depends less on numbers and patterns (is it a rhombic thromboid or a teacup?) than on an assessment of management in the first place. I'm not saying numbers and patterns aren't important. I am saying it's more important to decide if you think management is competent, and if they are honest enough to resist selling out their employees and investors while they make theirs.

      Repeating myself here but, IMO, a cynical view that managements always manipulate the reserves to manage earnings is as wrongheaded as the opposite view that managements will never manipulate the reserves for that purpose. Wrongheaded attitudes stand to lose you more opportunities than they gain you, for the simple reason that they are really just superstitions. They subsititute erroneous beliefs for hard thinking and analysis. This is precisely why analysts ask so many questions about reserves during earnings calls.

      But that's just what I think.

      Good luck tabla -

    • The same way they might manipulate brokers idiot.

    • I appreciate your long explanations.

      I see there is no such thing as a free lunch.

      Anyway, profit growth of UNH seems designed by an engineer. Suspiciously even, no?

    • fembup gives an informed, detailed explanation of how difficult it is for insurance companies to manipulate earnings with reserves and you deny it and call him an idiot.

      Since you must be a genius, would you be willing to explain how insurers screw with reserves? I'm sorry I'll miss any reply from you because I'm marking you ignore.

    • Insurers have been screwing with reserves for years you idiot.

    • What the hell are you talking about!

      A bunch of nonsense.

    • "What makes UNH so more appealing that other HMOS?"

      For starters, I don't think UNH is more appealing. They're middle-of-the bell-curve average (however, the standard deviation is very narrow).

      Besides, United is not simply an "HMO" - it's that and a lot of other things besides.

      You asked, and here's my little screed on the subject. It may or may not strike you as reasonable. Sorry if you don't like it, it's just what I think.

      The core businesses of managed care companies consist of basically same stuff. The differences between them in terms of the effectiveness and appeal of their products are surprisingly small - and usually temporary. What the average managed care company can do today would have rocked the market 5 years ago. They all achieve about the same care-management results today. They all use more or less the same technologies and knowledge bases. They are all about average. True, the bar has been raised -which is a positive development. But all the managed care companies still cluster more or less around the same bar, their long-term results have all been roughly the same.

      But in the short-term, what can differentiate them? If you don't count good luck or bad luck, I suggest you look at the behavior of the management team. How do they treat their customers? Their suppliers? Their employees? How have they responded to change & adversity? How has the company business model evolved? Does the company have a discernable focus? Has management recently done something really really smart? Or, really, really stupid? And on and on--all questions intended to assess management competencies. OK, what about profit? Well, profit is keeping score, it's not a management competency. But did the company sell out to make this quarter, or is the profit sustainable? These are all very hard questions to answer. You cannot answer them without knowing (or guessing) something meaningful about management.

      I think it's a hoot that boards like this so often consist of posts saying "XYZ is going down" or "shorts about to puke" or "the reverse teapot parallelogram means PE ratio is inverted" and other superstitious nonsense. That ignores the way that businesses function. Worse, it ignores the managements that are driving the businesses.

      So I say pay close attention to management behavior. That strategy works for Warren Buffet, it'll work for you. 'Course, that means you'll have to do real homework (and I don't mean read up on charting).

      Good luck

    • Sounds like a HMO company suck up post.

    • No attempt to scare, but I see a real shift in this business model.

      I believe the runup in profits, margins is ending and people should be aware that buying in at this level is extremely risky IMO.

      My sources are very good, information credible.

      Excess reserves, profit margins, and many other areas are about to come under more intense scrutiny than before.

      Large insurers present a very ripe area of interest.

      That is all I have to add on this...............

    • Thank you very much for your posting.
      My question is now,
      What makes UNH so more appealing that other HMOS?
      How can possibly manage health for people a company that sells nearly 1M annual sales per employee?
      Their health products are so more competitive?
      Are their customers more healthy?

      I will appreciate your opinion.

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