Do Americans Get Their Money’s Worth in Health Care ?

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The healthcare system in the US is the costliest in the world. Accordingly the US expenditures on healthcare is the highest in the world. The total expenditure runs into Trillions and contrary to popular belief public spending accounts for more than private spending. On a per capita basis the US spending on healthcare is more than twice the average of other developed countries.

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healthcare-costs-per-capita-select-countries

Source: Peter G. Peterson Foundation

The question is what do Americans get for spending so much on health care? For example, do Americans get to live up to age 150 or 100 ?. The answer is an absolute no. In fact, Americans do not get their money’s worth in the health care field. This is because much of the money spent is due to highly inflated costs, administrative paperwork, marketing,outrageous compensation, etc. So in effect most of the money spent goes not towards the well being of the patient but for everything else.

One factor which shows that the health outcome does not justify the high US expenditures is life expectancy. The US healthcare spending has been growing for many years now. But in terms of life expectancy the US ranks the lowest when compared to other developed countries as shown in the chart below.

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life-expectancy-vs-health-ependture-for-select-countries

Source: twimg.com via twitter

People in other developed countries and even in an emerging country like Chile live longer with lower health expenditures.

Shenzen Subway Map

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The Shenzhen Metro is one of the largest in China. Currently the system has six lines covering 140 miles with 132 stations. To put this in perspective, the world’s largest subway system, the New York Subway has 469 stations and the second largest metro in Shanghai has 364 stations.

The subway map of Shenzen Metro is shown below:

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shenzhen-subway-map-2

Source: China Highlights

Earlier: Hong Kong Metro Map

Are British Stocks Cheap Now?

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The FTSE 100 closed at 7,097.50 –  a new record high for this year today. Rising oil prices and a recovery in commodity producers this year has propelled the benchmark index to record levels.

With the index at such levels, some investors may be wondering if there is any value left in UK stocks. According to a report by Schroder’s, based on the P/E ratio British stocks are valued but they are undervalued based on the cyclically-adjusted PE or CAPE ratio.

The current P/E of 22 is much higher than the long-term average of 15. But the CAP measure shows UK stocks are cheap since the ratio is 15.6 compared to the long-term average of 204.

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cape-ratio-of-uk-stocks

Source:  Why is the FTSE 100 near all-time highs – and can it go higher? by David Brett, Schroder’s

Investors looking to explore British stocks trading on the US markets can check out the list here.

The Composition of Argentina GDP by Sector

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Argentina is the second largest economy in South America after Brazil. In 2014, the GDP about $545 billion according to the IMF.

Argentina is one of the largest exporter of food and agricultural products such as beef, soybean, sunflower seeds, etc.

The GDP of Argentina by sector is shown below:

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argentina-gdp-by-sector-2015

Source: Unconventional Gas in Argentina: Will it become a Game Changer? by Ieda Gomes & Roberto Brandt, The Oxford Institute of Energy Studies

Agriculture and industry accounts for about one-third of the economy. The services sector accounts for the reminder of the economy.

Dividend Payout Ratio Comparison: New Zealand vs. Global Indices

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Investors hunting for income stocks should consider New Zealand. Dividend payout ratio in the country is one of the highest in the world. In 2015, the ratio was 84%. This figure leaves the 48% payout ratio of US firms in the S&P 500 in the dust.

Similar to Australia, New Zealand also has the policy of imputation on dividends. This simply means investors receive a tax credit for all or some of the taxes paid by a company. In the US and other countries, a company’s earnings are taxed twice – once when a company pays its taxes and then when an investor pays taxes on dividends received.

The dividend payout ratio of New Zealand vs. select major indices in 2015:

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dividend-payout-ratio-new-zealand-vs-other-indices

Source: Why a New Zealand Dividend Strategy Now?, Tianyin Cheng, Indexology

The importance of high dividend payout ratios can be confirmed by the total return of equities over the long term. This is because high dividend payouts should give a strong boost to total returns even when price appreciation is average or below normal. In the case of New Zealand, dividends reinvested accounted for about 60% of the total return of benchmark S&P/NZX 50 Index between Jan 3, 2001 and Aug 31, 2016. Another 18% was due to reinvestment of imputation.

sp-nz50-index-dividend-impact-on-growth

How invest in New Zealand stocks?

The simplest and easiest way for US investors to access NZ stocks is via the iShares MSCI New Zealand Investable Market Index Fund (ENZL).

None of the NZ stocks trade on the organized exchanges. But about 39 firms from the country trade on the OTC markets.

Disclosure: No Positions