Monday, July 26, 2004

Equity Trading -- Mylan (MYL)

Talk about being really, really, really wrong about a company. Mylan announced today that it will be buying King Pharmaceuticals, and the stock dropped like a rock. I haven't fully researched the deal, but it appears that it will be diluting earnings substantially.

This just goes to show that you should always set your entry and exit points prior to a stock purchase and not deviate from those rules. If I had held on expecting the turn that should have come, I'd be something like 20% down right now. As it is, I only lost 5% trading Mylan.

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Thursday, July 15, 2004

Episode 3 - Private Health Insurance...Disputing the Riders

After further discussion with my agent, he recommended I call underwriting (customer service) at Fortis to discuss the riders placed on my policy. The subsequent phone call lasted over an hour while I spoke with two different representatives. The first representative knew very little and in fact had no real information but spoke as if I knew nothing. It felt like a textbook case of being talked down to.

The second representative actually had the information used during underwriting. As it turns out, even though underwriting knew of the EMG and MRI, they based all of their decisions on the Doctor's notes from the appointment where he ordered the EMG and MRI. So, not only did they know about the tests because I told them, but the Doctor's records should have also shown the EMG and MRI being ordered.

So, the riders have been explained, but my experience with the customer service representatives has helped me decide not to accept the insurance. Here are a few statements the representatives made during the call:

  • In response to me asking about a higher premium to get surgery or even just complications of surgery for Otitis Media (ear infections) covered..."We're not going to solve all of the insurance industry problems right here on the phone today."

  • In response to me asking what information the first representative was looking at in telling me they didn't have records that underwriting had clearly told me they would order..."I know nothing." This isn't a joke...that's what she said. I then asked to speak to somebody that did know something, and she transferred me. I figured she'd hang up.

  • In response to me asking why I would trust their claims department given their attitude on the phone..."That's a decision you'll have to make."

  • In response to me asking if he thought there was a problem with their research based on not retrieving the EMG and MRI results that they knew about..."No."

Needless to say, I wasn't too impressed. Admittedly, I was combative on the phone, but I do that intentionally to see how they react. Dealing with ISPs, I've often found that if sales can't be polite, technical support will be a nightmare. I'm guessing that if customer service for health insurance is poor when you're trying to GIVE THEM MONEY, it could only be worse when you're trying to take money.

The next step is to look into Blue Cross Blue Shield. Unfortunately, they do not offer an HSA and as such, our medical expenses would not be tax deductible. Don't believe the crackpot accountants they have on TV shows that tell you all of your health care costs are deductible. In truth, only the amount of expenses that exceed 7.5% of your adjusted gross income are deductible.

It's interesting to note that Miscellaneous itemized deductions have a floor of 2%. Given that a lot of Miscellaneous deductions are fraudulent, it really makes you wonder about the logic of our elected representatives. Removing all taxes from the healthcare system would go a long way toward reducing the burden on all Americans.

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Tuesday, July 13, 2004

OOP: Information Hiding

While Java has ushered in a number of beneficial programming constructs, it has also undermined good object-oriented design approaches. As an example, consider the basic Java Bean. I'm not talking about Enterprise Java Beans but just plain old Beans.

A Bean has a simple mission in life...allow other code to get and set properties without knowing anything about the object or its internal structure. Java accomplishes this through its reflection APIs by using a simple, predictable Bean method signature. Commonly, the Bean methods directly correspond to private data members in the Bean class, however the JavaBeans specification does not require this practice.

Unfortunately, most programmers do not know and/or do not care about the specification. As a direct result, programmers often implement most data objects as beans. When the object consists of nothing more than primitive types such as int and String, I have no problem. It is when the object consists of non-primitive data types where I cry foul.

Why? It's simple Java pass-by-value programming, something most programmers fail to understand even at a reasonably advanced level.

When you return a primitive data type or pass it as a parameter, Java makes a copy of the data and sends the copy. However, when you work with non-primitive types (i.e. List, Stack, etc.), Java makes a copy of the reference to the object. While it is a subtle distinction, it is an extremely important one.

Consider the following code:

public class Example {
private int a;
private Vector b;
public int getA() { return a; }
public Vector getList() { return list; }

If your code calls example.getA() and modifies the result, the private member within example does not change. However, if your code calls example.getList() and calls addElement on the returned Vector, the Vector b within example DOES change. Consequently, the calling code becomes dependent on the private member type.

Java offers a variety of means by which this situation can be prevented. Cloning often works out to be the easiest approach. It keeps the simple structure of the bean-style programming, but it prevents programmers from relying on the underlying private member type by presenting them with a copy, much like Java already does for primitive data types (remember that String is a primitive type...tough one for a C++ programmer).

Self-discipline might....err....nevermind...

Ultimately, the goal is more easily maintained code. If you expose private data, you run the risk of making a black box transparent. What happens when that Vector needs to change to a Hashtable to provide faster access. All of those callers relying on example.getList().addElement( "hello world" ) will break. What do you do now that those calls are littered throughout several thousand lines of code?


Tuesday, July 06, 2004

Equity Trading -- Updated Stop Loss Strategy

After this Mylan (MYL) trade debacle (ended at $20+ after triggering my $19.95 stop earlier in the day), I will be changing my stop loss order approach and will use 2-3% behind the support point when trading stocks listed on the NYSE. Trading the Nasdaq, I've rarely had this happen, but it has happened all too often at the NYSE. In 2003, I was trading E*Trade (ET) taking runs from $4 to $4.30 as often as I could get them, and a few times, my $3.90 stops were taken out followed shortly by a 10-15 cent positive run.

Given that I can't watch prices throughout the day consistently like I did a year ago, the stop loss orders are extremely important to my trading. A year ago, I would have checked the technicals on MYL before executing a sell order at $19.95 and likely would have stayed in the stock. I still like this stock's chances to reach mid-20's by next January, but I need to get my money to another broker with lower fees before considering another purchase.

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Episode 2 -- Private Health Insurance...The Offer

It finally came after another e-mail to my insurance agent this morning. This was the offer that would free my wife from her work-for-insurance situation...just $100/month. BUT...there's some fine print. For myself:

  • 2 year rider excluding any illness, disease or physical disorder of the wrists including, but not limited to, Carpal Tunnel Syndrome.

  • 3 year rider excluding any injury, illness, disease, or physical disorder of the spine, its muscles, ligaments, joints, discs, nerves and spinal cord.

And for my 1 year old son:

  • 1 year rider excluding esophagitis, reflux esophagitis, heartburn, indigestion, gastroesophageal reflux disease, duodenitis or hiatal hernia, including but not limited to any diagnostic procedures, treatment, surgery or complications thereof.

  • 2 year rider excluding Otitis Media, including any diagnostic procedures treatment, surgery or complications thereof.

So let's look at each of these exclusions individually related to our medical history. Both of my exclusions deal with a precautionary visit to the Doctor regarding numbness in my arms while sleeping. As it was, I had let the problem go on for about half a year without visiting a Doctor and finally went because the episodes were so severe that I couldn't move the arm from the shoulder down, and it was taking 5-10 minutes to get feeling back in the arm.

The orthapaedist ordered X-Rays, an EMG, and an MRI. As a side note, I have never met a more arrogant Doctor. The X-Rays showed basically nothing. The Doctor was a little concerned about the position of one vertebrae which prompted the MRI. My profession, computer programming, led him to order the EMG.

The MRI was a piece of cake and resulted in a statement from the reviewing physician of "Negative cervical spine MRI." Of course, the EMG, that was a different story. I can imagine a lot of people live with the pain of carpal tunnel syndrome instead of completing one of these tests. Basically, the test consists of electric shock to the nerves in your arms and hands and stabbing the muscles with needles.

My test took around 2 hours as the Doctor wanted to be very thorough given the unusual nature of my symptoms. He even went so far as to check my neck (not part of the normal routine). I don't know if you've ever had a needle inserted into the back of your neck, but it's not the most comfortable thing in the world. The fun part about the needles in the EMG, though, is that the Doctor moves it slightly inward 3 times after the initial stick. Big fun if you ask me...

Anyway, I ended up with the same result as the MRI...normal study. In fact, the Doctor told me during the test that he'd never done such a test where the nerves fired as well as mine did.

The Doctors explained my symptoms as a combination of injury and bad sleeping position.

So, I took a precautionary visit to the Doctor, ruled out any problems, and the insurance company penalized me for it.

With respect to my son, he had some minor reflux problems in his first 3 months of life, but since then, he's been fine. At the time of the insurance application, he had been through a rough period with ear infections, but the Doctors were not (and still are not) talking about tubes. Both of these are things that a lots of babies experience and the majority outgrow.

I don't mind the exclusion about carpal tunnel. I know from the EMG that it will be a long time before I have to deal with it, but excluding everything related to my spine. That's a bit scary. With respect to my son, again, I'm fine without having a safety net for reflux issues, but otitis media? I have no idea how much tubes would cost and what kind of complications could go along with them. Granted, there's a very low chance that he'll have tubes, but it's an issue that has to be addressed due to the exclusion.

The problem here is the mindset of the insurance company. For each patient, they want to make money (in the private market) regardless of what happens to your health along the way. As a result, they try to find the most likely near-term problems and exclude them from coverage.

How is insurance "insurance" when they only cover things that you don't have? It's great that I can have cancer coverage, but what good does insurance do me if, by some off chance, I have a problem with my spinal cord? I thought the whole idea behind insurance was sharing risk across a larger group. When did the insurance companies decide that each and every patient had to be profitable?

Something in the health insurance market has to change in this country...this system is hopelessly broken. Being far, far right in the political spectrum, I refuse to believe that means socialized medicine. Maybe I just need to start my own insurance company...

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Friday, July 02, 2004

Equity Trading: Mylan Laboratories, Inc. (MYL)

After my little rant about the FDA and patent extensions, I looked a little more closely at Mylan Laboratories, Inc. as an investment opportunity. In my small short-term trading experiment ($2000, one stock at a time, one trade a day), I accumulated 10% over 3 months of trading in a choppy / down market (December 2002 - April 2003). During that experiment, I often found myself trading support / resistance points and/or trading counter to the trend. Mylan's chart brought back some memories so I couldn't help but play.

Looking at the chart, you can see resistance in April 2003 of $20 and a break through that resistance shortly thereafter. The recent news brought the stock back to that $20 range. I ended up buying early at $21.02, but I'm hopeful that won't matter on a slightly longer-term hold than what I did in my short-term experiments.

News today, though, could kill this investment. I have approximately a 5% stop loss order in place, and it might be triggered Tuesday with negative news of the FDA rejecting Mylan and Teva's request to prevent authorized generics. I usually put stop losses a few cents behind the support point as I've frequently been stopped out by a penny on the NYSE so mine is at $19.95 right now.

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Episode 1 -- Private Health Insurance

Sticking to my daily routine, I arrived at work around 8 am after dropping my son off at daycare. The anticipation of finding an answer to my family's health insurance quandry left me breathless as I jogged up the stairs to the second floor. Plugging the laptop into the wall, I knew it would be a few minutes until Mozilla would be running, but I waited anyway. Watching the cryptic messages scroll by on my Linux laptop as it booted seemed to take forever. That stupid PCI hotplug ought to be faster.

Finally, a login prompt. I was just a username, password, and a few commands away from checking my e-mail.

With Mozilla finally on the screen, it was just a matter of minutes before I would see that my son and I were approved for private health insurance under a Health Savings Account (HSA) program with Fortis. On the ADSL line at work, it wouldn't take long to download the usual 500 or so messages, half of which are spam, to my local machine. Even though the Bayesian spam filter in Mozilla is slowly falling apart, it still picks up about 70% of my spam saving me tons of time sorting through garbage.

I double-clicked to open the first e-mail to start reading. After deleting a few spam and reading some server status reports from our FreeBSD machines at the colo facility, the Mozilla window closed.

Huh? Where was my insurance offer?

Knowing that it could have fallen into the Junk folder as a false positive, I started the arduous task of cleaning out my junk mail. After several thousand messages (it had been a while since the last housekeeping adventure), I still had nothing.

"Well...forget hi-tech, I'll just call," I thought to myself.

The independent agent, Mark, answered the phone quickly and politely. As he told me about the questions they had about a visit to the Doctor earlier this year and how they ordered medical records, all my hopes of finding a health insurance alternative had been crushed.

Apparently, you have to be HEALTHY to qualify for HEALTH INSURANCE. And not just healthy, you better not have been toa Doctor for anything beyond a routine physical EVER.

Does that make any sense?

I'm applying for an HSA policy with a $5,000 deductible. Never, in my life, have I had expenses in excess of $5,000...not even the year I had gall bladder surgery.


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