Some 16 years ago I sold some BRK.B in my IRA to buy JNJ. BRK seemed fully priced at the time, JNJ seemed cheap, very strong in both size and finances, well managed, and I wanted some position in health care for diversification. I figured that with BRK as my major holding plus XOM for O&G, that with JNJ I would have a pretty well diversified portfolio of very strong, well managed companies with the proven size to ride through market cycles. And the JNJ would provide some hedge in down markets.

That didn't work out that well until recently, but now JNJ has matched BRK in total return over that period. WHY? Part is because JNJ continues to reorganize and improve. But not enough to explain the recent surge.

According to the WSJ, that's because a strong negative correlation has developed between chip stocks and healthcare stocks. And algorithmic trading has used that as a hedge, particularly as concerns have increased about the future of chip stocks. JNJ is a short in disguise.

wsj.com - Healthcare investing is now an AI short in disguise

Health care is far less cyclic than chip stocks recently, and offers a large enough liquidity to permit trading a lot of money instantly.

Which makes me wonder why BRK.B isn't seeing the same trades? It has a slightly larger daily trading volume than JNJ, and is certainly less cyclic and safer than chip stocks.

In other words, apparently it doesn't have the strong negative correlation needed to attract the algorithmic trading world. I only imply that, I haven't seen the data.

So JNJ is kicking ass versus the S&P 500 recently while BRK.B is the opposite.

What's going on folks? BRK could use some boost recently.