7 ms·

I quickly went through the 10 largest European/American biomedical companies by revenue in Google Finance (Johnson & Johnson, Roche, Merck, Pfizer, AbbVie, Baye

by em500 2y ago

I quickly went through the 10 largest European/American biomedical companies by revenue in Google Finance (Johnson & Johnson, Roche, Merck, Pfizer, AbbVie, Bayer, Sanofi, AstraZeneca, Novartis, Bristol Meyers). AFAICT the only one that beat the SP500 in total returns in the past 5 years was AbbVie. Many even trailed short government bonds or savings account returns. So for all the eye-watering gains in tax havens the owners/shareholders didn't seem have much to show for them.

MagnumOpus 2y ago
Away from the discussion of the last 5 years being the years of LLM and AI boom and those mega caps exposed that hype driving the SP500, you didn’t list Europe’s largest company by market cap: Novo Nordisk increased 7 times in value in the last five years…
- mikysco 2y ago
  Novo's rise is due to the proliferation of its new blockbuster weight-loss drug, semaglutide (aka Ozempic)
- em500 2y ago
  Yeah, I didn't do a full blown analysis, just went trough wikipedia's top 10 biochemicals by revenue (Novo Nordisk was no.14) and picked 5 years since that's the longest 1-click option from Google Finance to get a consistent time span. If you didn't predict Novo Nordisk's hit weight loss drug ahead of time, but just held a big portfolio of large pharmas, the returns seem pretty disappointing to me. Or put differently, if you have a lot of extra money to invest today, would you significantly overweight big pharma based on what we learned from this article?
  - pavlov 2y ago
    Isn’t this why index funds exist? For an individual investor who wants unopinionated exposure to “Big Pharma” it’s hard to buy more than, say, the ten largest stocks as in your example. They’d probably also focus on American stocks only since European are typically harder to buy. And then they miss out on Novo Nordisk. But an index fund that buys (for example) the top 100 global companies in this vertical would have benefited from the rise of Novo. If you had invested one million in a fund that held Novo at only a 2% weighing five years ago, there’s now a 100k gain from that stock alone. That makes up for a lot of middling big caps, and you didn’t have to actively pick Novo or any other stock.
deleted 2y ago
[deleted]
francisofascii 2y ago
What were the total returns?
gosub100 2y ago
So it's okay to cheat the system if your business is losing money?
- WalterBright 2y ago
  As taxes are on profits, if you're losing money you down't owe income tax.
rixed 2y ago
Profits (the money the company makes) are not the same as total return (the money one makes by trading that company's stock on the second hand market plus the arbitrary value distributed to stockholders, usually close to 0), are they?
Jensson 2y ago
These things are already priced in, the stock traders has known these things for decades so the returns are about the same as most other things as you would expect. High returns comes when stocks do better than expected, these companies are expected to fleece people to hell and make massive profits so when they do that it is just the expected thing happening meaning normal return on investment.
xorcist 2y ago
Why would have shareholders get extra returns from this scheme? Lowered taxes is a one off event. If you had constantly lowered taxes, like we had constantly lowered interest for a couple of years, then that could have been expected to be reflected in the share price. Or if you could isolate a short time period when they started doing this, then that would have affected earnings and likely the share price. But once that is the way the business operates, why would shares continue to rise? It does not make sense.

by em500 2y ago

MagnumOpus 2y ago

Away from the discussion of the last 5 years being the years of LLM and AI boom and those mega caps exposed that hype driving the SP500, you didn’t list Europe’s largest company by market cap: Novo Nordisk increased 7 times in value in the last five years…

mikysco 2y ago
Novo's rise is due to the proliferation of its new blockbuster weight-loss drug, semaglutide (aka Ozempic)
em500 2y ago
Yeah, I didn't do a full blown analysis, just went trough wikipedia's top 10 biochemicals by revenue (Novo Nordisk was no.14) and picked 5 years since that's the longest 1-click option from Google Finance to get a consistent time span. If you didn't predict Novo Nordisk's hit weight loss drug ahead of time, but just held a big portfolio of large pharmas, the returns seem pretty disappointing to me. Or put differently, if you have a lot of extra money to invest today, would you significantly overweight big pharma based on what we learned from this article?
- pavlov 2y ago
  Isn’t this why index funds exist? For an individual investor who wants unopinionated exposure to “Big Pharma” it’s hard to buy more than, say, the ten largest stocks as in your example. They’d probably also focus on American stocks only since European are typically harder to buy. And then they miss out on Novo Nordisk. But an index fund that buys (for example) the top 100 global companies in this vertical would have benefited from the rise of Novo. If you had invested one million in a fund that held Novo at only a 2% weighing five years ago, there’s now a 100k gain from that stock alone. That makes up for a lot of middling big caps, and you didn’t have to actively pick Novo or any other stock.

deleted 2y ago

[deleted]

francisofascii 2y ago

What were the total returns?

gosub100 2y ago

So it's okay to cheat the system if your business is losing money?

WalterBright 2y ago
As taxes are on profits, if you're losing money you down't owe income tax.

rixed 2y ago

Profits (the money the company makes) are not the same as total return (the money one makes by trading that company's stock on the second hand market plus the arbitrary value distributed to stockholders, usually close to 0), are they?

Jensson 2y ago

These things are already priced in, the stock traders has known these things for decades so the returns are about the same as most other things as you would expect. High returns comes when stocks do better than expected, these companies are expected to fleece people to hell and make massive profits so when they do that it is just the expected thing happening meaning normal return on investment.

xorcist 2y ago

Why would have shareholders get extra returns from this scheme? Lowered taxes is a one off event. If you had constantly lowered taxes, like we had constantly lowered interest for a couple of years, then that could have been expected to be reflected in the share price. Or if you could isolate a short time period when they started doing this, then that would have affected earnings and likely the share price. But once that is the way the business operates, why would shares continue to rise? It does not make sense.