60 Minutes Segment on Opiods

by Michael Keane

CBS' 60 Minutes has just done a major story on the Opiod issue in the United States. The story put a particular focus on the political web that has been created by Congressmen, Manufacturing, Distribution, and Health professionals. The story is here and the video of the story is here.

We thought it would be a great addition to our recent blog post (here) about why Methadone is free but Cancer Drugs cost a fortune.  This is an issue that can only get brighter as the country continues to fight itself trying to create an acceptable health care plan.

** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

3rd Quarter Highlights

by Michael Keane

The third quarter was one of growth for KeaneVCC. A breakdown by entity is below.

KeaneVCC

- Consulting
     - We are continuing to work with Bullied Comics. The comic continues to sell as royalty checks from partner Mascot Books keep coming. New promotional items are coming in the fourth quarter.
     - KeaneVCC's charity arm made a donation to Shriner's Hospital Chicago during the quarter.
     - Articles written on this blog page and others continue to gain larger readership.
     - Companies like Acura, Fidelity, and Northeastern Illinois University advertising on our blogs
     - Social media traction (Facebook, Twitter, etc.) continue to grow. 


KDK Fund

- The fund was able to purchase more shares of Ford. The link to the purchase is here.
- A dividend was received with portions reinvested and planned for charity. The link is here.

KDK Options

- Both positive and negative trades have happened during the quarter. See relults at KDK Options.

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

High Cost of Cancer Drugs While Methadone is Free

by Michael Keane

Recently, there was a meme that asked why methadone is able to be provided for free while cancer drugs cost a fortune. With the healthcare debate in full force, situations that involve cost and pricing are more likely to find the spotlight. There are some reasons that are part of why this type of action happens and some actions that can take place in order to assist in this issue.  

On the methadone side of the equation, it is perceptively better for the government to get addicts back to a certain level of health. The drug also was created in the 1930’s and 1940’s and therefore the production cost is quite low. But it is interesting to see how the massive rise in opioid deaths (quadrupled since 1999)1 has caused the government to pay for methadone and other opioid drugs at a much higher level. This rise in cost has been noticed by hospitals and the general public with some starting to wonder if their is a better use of funds for rehab drugs, namely not using what can only be considered a proliferation of opioid treatment drugs.

On the cancer side, there are two big areas (of many) that can be addressed.  The first major comparison is the realization that, unlike methadone, it takes nearly a fortune to get any successful cancer drug to the market. There are also many drugs which fortunes are spent on that never get to the market. To initially recoup these costs, prices are generally set fairly high. But because the public is becoming more and more aware of the pricing, there are efforts within the government and drug manufacturers to work on the time a drug can get to market. This will affect the cost structure for the companies that will hopefully be passed down to the patient.

The second, is that investors like you and me demand a certain return on our capital investment in the company creating the newest and greatest cancer drug. Yes, part of the fault belongs to us.  If you, like me, have a 401k or pension level retirement account, the likelihood that ownership of shares in the drug companies that charge these high prices is very high.  We as investors are either ignorant to or have recognized and demanded through expectation of higher stock prices and dividends that the companies charge high prices for their cancer drugs. If you are a fund manager, please take note. The wild thing is that the unfortunate circumstance of the growth in profits from the increased pricing is in the end hurting our financial value overall. This is due to the fact that the personal cost of the drugs are overwhelming the growth in profits we see in our portfolios. In fact, the majority of the positive effect from the higher prices continues to be given to the executives of these companies. You regularly hear of the millions that the executives make in bonuses while you and I might make an extra few dollars per year in dividends. This process isn’t working.   

One simple way to change to pricing structure is stop owning the shares of the companies charging these higher prices. If this done on a massive scale (aka retirement fund, pension fund), and they no longer have the capital to build their drug database, changes in pricing can occur. Just last year Mylan was discovered to basically fleece customers with EpiPen pricing. Once it was found out and basically only when funds started looking at selling shares, the company moved to better align pricing. Another is to create a list of highest priced drugs. If society made a public list of the most egregiously priced drugs, the companies might pay attention and lower prices. Getting this to work will take work. But if we are truly fighting for our families and friends, this might not be a bad action to take up.

Thank you

1 - NPR Methadone article

2- Wikipedia/methadone

Business Update (KDK Fund, KDK Options, Consulting)

by Michael Keane

Here are some updates on what the company is doing. The year continues to go well. Assets under KDK Fund are growing. Trading operations and strategy for KDK Options continue to evolve and improve. Work with Bullied Comics is developing nicely. Readership on blog posts for all entities continue to grow.  If your company is looking for research to be done or analysis on a current project, let us know at keanevcc@gmail.com and we will get to work!

KDK Fund

More shares of Ford continue to be bought. Purchases were made in June (here) and July (here). There was a shift in management to bring about more value to shareholders. The plan to start the call selling program is still on track to start later this year.  The effect on reinvested dividends on future dividends continues to be strong.

KDK Options

Spread trades have begun to dominate the strategy for KDK Options. Many successes have occurred lately due to the focus on spread trades. In the summer quarter alone, successful spread trades in the Japanese Yen ETF FXY (post here), Ford (post here), and BAC (post here) have occurred. There is a current spread trade with Bank of America (link here) going on now. Not one trade executed this quarter resulted in a loss. But this is not to be the expectation :).  

KeaneVCC

Work with Bullied Comics continues. Areas of work include content development including its YouTube channel (search bullied comics), product development and media communication. Some recent blog posts from KeaneVCC (link here) include topics such as Self Serving Bias, and donations to both Shriners Chicago Hospital and Northeastern Illinois University.

How Self Serving Bias Influences Your Business

by Michael Keane

Biases are everywhere. Like anything else, they can be good and bad for an organization. One important bias needing monitoring is the self serving bias. Psychology Today defines it as attributing positive events to themselves and negative events to others. It is very dangerous for a company or industry when this bias is present in a strong manner. Especially when the marketplace moves forward from the workings of the organization. Having a self serving bias can endanger the business’ value. KeaneVCC regularly uses as much transparency as possible to analyze what were the most truthful and important factors in creating results from its processes and the processes of its partners. How present is the self serving bias is a question regularly asked.Using systems like transparency can limit this bias and provide better decision making and therefore create better results for the company and industry.

The energy industry is going through this to an extent. Recent reports in the news have shown that there are companies and executives within the industry that are unfortunately are just now acknowledging the present and future success of electric vehicles. Recently, there have been story upon that showed executives are understanding the level that electric vehicles will have on their industry. This should have  happened a long time ago. It is pretty clear that the self serving bias was part of the delay.

KeaneVCC clients KDK Fund and KDK Options run into this also. The ability to switch and remove a bad investment comes regularly with a fight with self serving bias not wanting to be wrong. It's very easy in this industry to unload the responsibility onto others and accept the successes as a product of your own genius.

Transparency has been a good way to understand how to overcome this bias. This is a place where the board of a company or industry council can really work its magic. Having a part of the team that analyzes possible scenarios that go against can have a long term positive benefit for any organization.   

There are some questions you can ask to find out how influential (there is some self serving bias in most decisions) this bias is and how appropriate that level is to your company or industry's risk is. Is the successes and issues with the company or industry self driven or outside driven? If the answer is one way for the successes and the other for the issues, there is probably a wonderful opportunity for change.   

Thank you!

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 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

New Donation Made to Shriners

Hello

KeaneVCC has made another donation to Shriners Chicago! KDK Options made some wonderful trades in the Japanese Yen and Ford over the last month to make this happen.

Donating a portion of revenue instead of profit is a different way of running the business and continues to build overall wealth, not just financial wealth. Donations to charity also will not get recorded on its tax form. KeaneVCC wants to make sure that its commitment to charity is complete and the benefit is received solely by understanding others are being helped.


** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

New Donations Made to Shriners' and NEIU

Because of the hard work of KDK Fund (dividends), KDK Options (option trades), and Bullied Comics (1st edition customer purchases), KeaneVCC has been able to make donations to both Shriners Hospital of Chicago and Northeastern Illinois University's College of Business and Management. The donation to NEIU was made through the Goodwin Challenge (see here).

Being able to contribute to the areas of health care and education is very important to KeaneVCC.

** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**