exactly, Yardeni charts mag 7
From there, for example, you can see the odds for Mag7 vs SP493
Charlie Munger said in some book, freely quoted:
“Everyone sees which is the best horse in a horse race. But when everyone bets on it, the odds drop. The worse horse, which no one cares about, might offer 7x winning odds – and then the situation is no longer so clear regarding winnings.”
Warren Buffett, on the other hand, gladly buys quality winning companies at a fair price. But if he can’t get them at a reasonable price, he prefers to sit on cash and government bonds and wait.
Market cap and portfolio weights
Lennar Corp. $33.97 billion (0.30%)
Pool Corp. $12.01 billion (0.39%)
Constellation Brands $29.66 billion (0.85%)
These investments are often considered choices of younger portfolio managers (Todd Combs and Ted Weschler), as the market capitalization is small by Berkshire Hathaway’s standards.
UnitedHealth Group $275.33 billion (0.61%)
This investment is also likely made by (Todd Combs and Ted Weschler), as the position size is too small.
Let’s look at UnitedHealth as an investment
UnitedHealth key figures
P/E: 11.76
P/S: 0.58
P/B: 2.59
P/CF: 8.53
P/FCF: 9.78
These figures suggest that the company is priced affordably compared to its quality. Valuation levels in 2023–2024 were weighed down by, among other things, the increase in doctor visits after the pandemic and a cyberattack on the Change Healthcare unit.
Why is UnitedHealth a cash flow machine?
- Almost all revenue is recurring from insurance premiums and service fees.
- Over 150 million customers bring scale and reduce the impact of individual risks.
- “Float”: customers pay insurance premiums in advance, expenses are paid with a delay, the company gains access to a huge amount of short-term free capital. (Note: unlike traditional property and casualty insurance, healthcare float has a shorter cycle because expenses materialize quickly.)
- Optum’s business brings additional cash flow from higher-margin services: data, drug management, and optimization of care chains.
- Scalable structure: the more customers, the lower the administrative unit costs.
Why is UnitedHealth essential to the US healthcare system?
One of the largest payers: UnitedHealthcare manages a vast portion of private insurance and public programs (Medicare Advantage and Medicaid). The company is critical to many states, even though competitors (e.g., Elevance/Anthem, CVS/Aetna, Centene) exist.
Data infrastructure: Optum analyzes billions of prescriptions, doctor visits, and cost data. This data is central to cost management and improving care efficiency.
Integration into the care chain: The company operates in almost all stages of healthcare – as an insurer, payer, data manager, drug cost manager, and partly as a service provider.
Essential size: The US healthcare system is fragmented and expensive. UnitedHealth acts as “glue” that connects the insurance system, care chains, and payments. Without such players, cost management and service standardization would be almost impossible.
Moat check 
Price check
Future outlook
Understandable industry 