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There was big news last week. News about big names and the big stocks that tanked once the headlines started to hit.
Apparently, Jeff Bezos, Warren Buffett, and Jamie Dimon are throwing in on some kind of healthcare company. A nonprofit, of all things.
While the announcement was heavy enough to sink healthcare stocks (including Express Scripts, CVS, Cigna, Anthem, and some biotechnology companies), details were light. A lot of blind speculation and head-scratching followed.
Don't bother digging around to see if anything anyone said or wrote about the new venture is particularly enlightening. I already did plenty of digging, and no one's even close to figuring out what they're planning.
But I know.
Here's why Amazon.com Inc. (Nasdaq: AMZN), Berkshire Hathaway Inc. (NYSE: BRK.A), and JPMorgan Chase & Co. (NYSE: JPM) are partnering up, why their so-called "non-profit" will become a thriving for-profit business, and what their endgame really is…
Bezos, Buffett, and Dimon's Real Endgame
First, it makes sense that these three giants are collaborating on a healthcare business model.
They have the resources, after all. They are three of the most successful, highly valued companies in the history of the world, with a collective market valuation of more than $1.6 trillion. Besides that, they have a million employees between them.
That's a sizable petri dish to run healthcare experiments on.
The announcement of their plan to set up a new independent company that is "free from profit-making incentives and constraints" was misread by almost everyone.
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Sure, the new company will be independent. At least, to the degree that these three iconic business visionaries who head their respective companies will let it be independent. History shows they have always put their indelible imprint on every aspect of everything their companies do, so we'll see about that.
But nonprofit? Forget about it.
"Free from profit-making incentives and constraints" is Jeff Bezos-speak for "we will build the business, whatever it costs, as long as it takes, and not worry about turning a profit or what anyone says or thinks."
Then, when they've proven their genius (as Bezos did with Amazon), the company will sell its profit-proliferating products and healthcare programs to consumers and investors for hundreds of billions of dollars, in perpetuity.
That's what these guys do.
The endgame is replacing every aspect of what doesn't work in healthcare with a completely new model based on data. And I mean insane amounts of data, with more data every second of every day. First, they'll guide individuals, then physicians, caregivers, and health coaches, then onto pharmaceutical companies and supplement companies. Finally, they'll have their reach in hospitals, clinics, and "wellness centers."
It's all about data.
What hasn't worked in healthcare is throwing one-size-fits-all pharmacological wonder drugs at everyone. None of those drugs, initially, have ever been tested on enough people to determine their efficacy across a global population. They work on test subjects enough to pass muster and get put to use.
They don't work for everyone, and they certainly don't work all the time.
But they work in the system.
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.