Concordia Healthcare Corp. T.CXR.R

RE:RE:RE:RE:RE:Pharmacist accuses drugmaker of 'massive fraud'

[FlintNewell]

No rational investment decision has ever been made by spreading fear and uncertainty.

 

If you're holding CXR in a diversified portfolio, have a reasonable weighting for it, and are thinking long-term, the magnitude of Valeant's problems is not relevant as a CXR investor. 

 

Let's assume the worst case scenario for Valeant. Assume for the moment that Valeant's issues are worse than they appear. Assume that it is the next Enron and that it will go bankrupt. When Enron went bankrupt, did all energy companies go bankrupt? No. There may have been short-term panic and volatility for companies in the same sector (as there is in the case of CXR) but is Enron's downfall affecting the perception of energy companies today? I would hope not or else you are letting fear and emotions drive your investment strategy.

 

By the same token, if Valeant goes bankrupt, will all healthcare companies go bankrupt? No. There will likely be greater short-term volatility and CXR's share price might significantly drop in the short-term. If the fundamentals of CXR are not affected by these events, then CXR remains a great buy. There is nothing to suggest at the moment that Valeant's immediate problems also apply to CXR.

 

Life will go on, and when we look back at these events years down the road, it will make for some great reading but that’s about it.