The President's Blog

SACRAMENTO -- -- The California Legislature is moving to curb some of the health insurance industry's most profitable and contested practices as lawmakers resurrect portions of Gov. Arnold Schwarzenegger's unsuccessful proposal to expand medical coverage.

More than a dozen health bills are advancing through the Legislature, many over the objection of insurers. Some of the proposals were transplanted from the plan that passed the Assembly last year, only to be rejected in the state Senate in January. Other measures are newly devised by the Democrats who control the Legislature.

The bills would require insurers to spend at least 85% of their earnings on patient care; block insurers from canceling policies of patients who need extensive care; and force them to cover more procedures, such as maternity services.

Over the objections of the major doctor and hospital lobbies, the Assembly approved a measure backed by Schwarzenegger that would require medical providers to publicly reveal their costs and medical performance.

For those in the investing world there is no better role model than Warren Buffett. For more than 40 years, he has compiled an impeccable record as the head of Berkshire Hathaway. His value-investing strategy has thousands of followers.

Bruce Berkowitz is one of those disciples. He runs Fairholme, a mutual fund he launched nearly a decade ago. As with Mr. Buffett, Mr. Berkowitz likes to own well-run companies that are inexpensive and then he holds them for the long haul. That strategy has worked out well. Fairholme has returned more than 16% a year since its inception in 1999. Fairholme is a finalist on this week's screen that focuses on funds that hold stocks of medium-sized companies.

Midcap funds sit squarely in the middle of things. These stocks, generally those with market capitalizations between $2 billion and $10 billion, tend to be growing small-cap companies that have appreciated in price or fallen large caps that are experiencing a temporary setback. Midcaps offer less risk than small caps, in addition to healthier growth prospects than the market's largest firms. According to Lipper, the typical midcap fund returned an average annual 13.6% during the five-year period ended Thursday. That is nearly four percentage points better than the average for domestic equity funds in general.

One worry: Some ratings companies put the midcap label on funds, especially multicap ones, that don't easily fit into a convenient category. We bring up this point because the label can influence how advisers design their asset-allocation models. In many cases, investors will want to check out a midcap fund to get a good idea of what it owns to avoid overlap.

We started with 1,319 offerings. We narrowed that group by knocking out those with loads and screening for our usual performance criteria -- top 40% over the trailing three- and five-year time periods -- and by looking for funds with low fees. We were left with 20 actively managed funds, eight of which are listed below.

College students and parents are scrambling to line up student loans for the fall amid fears the credit crisis might put the squeeze on such lending. How bad could it be? That depends on what kind of loan you are looking for.

Late last month, the Bush administration took a big step toward heading off problems with federally guaranteed student loans made by banks and other private-sector lenders. Using authority recently granted by Congress, the federal government plans to purchase and invest in such loans, freeing capital so lenders can make new loans.

But this initiative -- which will last only one school year -- isn't a fix-all for a loan market that is hard to sort out even in the best of economic times. For instance, loans not backed by the government still could be in short supply.

Here is a guide to the different kinds of student loans:

Blog Archives

03 Jun 2008|	California legislators revive plans to expand healthcare insurance
03 Jun 2008|	Midcap Funds
28 Mar 2008|	Credit Crisis May Limit Options