Goldman Sachs adjusted its ratings on numerous health care companies, +50% chance of bill passing

[sabra]

http://www.iii.co.uk/news/?type=afxnews&articleid=7794597&subject=markets&action=article

Goldman Sachs on Tuesday adjusted its ratings on numerous health care companies, saying there was more than a 50 percent chance of health care legislation passing.

Because of that, it wrote, it was reducing its exposure to managed care and increasing its exposure to higher beta and smaller cap names.

[Betty Karlson]

1. Is it bad I don't even know

what Goldman Sachs is referring to? Higher beta? Capnames?

[skippy911sc]

2. Beta is a measure of risk, the higher the beta the riskier the investment.

For example the Dow Jones industrial Average is considered a beta of 1, if you invest in something with a beta of one it would go up (in theory) equally with the index. A beta of 1.5 would be more volatile, so if the dow is up 2% today then your investment would be up more than 2%. Small cap names, refers to the companies capitalization. A small cap company would be a smaller company and often, again more volatile when risk is measured. Sorry the inner geek wanted to educate. ;)

[Betty Karlson]

4. I'm sure there are many supplicants at this altar

of geeky wisdom. Feel free to explain things to the laymen, please.

[Kurt_and_Hunter]

3. beta is kind of like volatility

High beta stocks go up more when they go up, drop more when they drop.

Cap is capitalization, ie. bigness.

So they are switching to smaller and less stable/steady companies.

As to why, that's another question.

[aquart]

5. Someone on DU once pointed out that if ANY health care bill passes

Then the entire health care pyramid scheme will crash.