MONROE KARMIN 00:00
When managing a portfolio, do you pay attention to the activities of Congress and the regulators? (Laughter)
PETER LYNCH 00:15
I spend zero time thinking about what’s happening down here in Washington, and I spend only a little time thinking about what’s going on in Russia or China. I just deal with facts. When the economy’s going down, when economy’s going the wrong way, I can deal with that.
But this whole healthcare reform bill drove a lot of drug stocks down to low levels. I could say to myself, “60% of Johnson & Johnson’s earnings are outside the United States.” Their pharmaceutical drug business is all patented and nothing’s coming off patent.
They only have 5% of sales from one product, which is Tylenol, which is already an over-the-counter drug and it’s growing overseas. Why has this stock gone from $58 to $36? These companies are already dealing in Japan and overseas. They already have the government controlling pharmaceutical prices. They’ve dealt with them.
So I deal with facts. They might, this year – I thought it was likely they’d have a bill passed on healthcare. It didn’t happen. It drove the stocks down, but I think the stocks would have rebounded anyway even if the healthcare bill had passed.
So I don’t deal with what’s happening in Congress or what’s going to happen in the future. I just deal with what’s happening in the economy and what’s happening in the companies I call.
Always, Always, Always deal with facts. Don't get affected by the noise in the market.