For months, two themes have distracted Wall Street from what could have easily turned into a year of pandemic despair. Technology stocks don’t get sick and biotech stocks are working on a cure.
It was great while it lasted. Big Tech recovered all its initial COVID-19 losses and ended August up a staggering 40% from the 2019 close. But as we’ve discussed, that end of the market got ahead of itself and is now correcting hard and fast.
Every one of the big-tech behemoths has broken technical support. They have further to fall before they regain their balance, much less before they start making investors money again.
That means it’s up to the vaccine companies to keep the bears at bay. Dozens of biotech developers are working on various ideas for curing the disease, stopping its spread or simply healing its lethal side effects.
I track about 20 leading programs in the space. Large and small, they’re up an average of 333% year to date, purely as an expression of Wall Street’s hope that one of them will overcome COVID-19 once and for all.
That hope is justified. Someone is going to cure this disease and then we’ll all be able to get on with our lives. One of the companies I’m tracking will probably be the one that creates a vaccine.
But for investors, that windfall for one stock suggests disappointment for dozens of others. There’s only going to be one winner here, or at best a handful of commercial therapies that reach the regulators first.
Many of these stocks are going right back where they started the year. That’s a real problem if you’re fixated on short-term trading opportunities instead of the long view that biotech really represents.
We were in biotech for years before COVID-19 even emerged. My subscribers who had the insight to come to the right stocks early in their cycle and the conviction to hang on for years have done extremely well.
After all, great companies will be here long after COVID-19 is only a memory. There’s always another disease to cure. When you have a broad development platform, you can take shot after shot.
Bypass the Crowd With Platform Biotech
Don’t get me wrong, there’s a thrill in watching a baby biotech stock like Novavax Inc. (NASDAQ:NVAX) or Vaxart Inc. (NASDAQ:VXRT) attract Wall Street’s attention.
These were tiny companies before the pandemic and are still narrowly owned. Shareholders were there for a reason. They needed a strong incentive to part with any of their stock.
But with the Fed flooding the world with hot money, the incentives reached bubble levels almost immediately. At that point, long-term shareholders were happy to see their patience rewarded. They’re happy to sell here.
It remains to be seen whether people who buy in at these levels will ever find a buyer who will give them a comparable exit. I strongly suspect this will be the kind of rally where the road down is even more frenzied than the initial road up.
After all, when so many people are eager to buy what amounts to the rumor of a vaccine windfall for someone, the reality of a winner-take-all development cycle tends to look cruel.
That’s why I steered clear of the COVID-19 crowd. After all, we’ve been recommending broad-spectrum biotech for years. Those stocks soared too, but we were already in position to enjoy the rally.
Ionis Pharmaceuticals Inc. (NASDAQ:IONS) was still known as “Isis” when I brought it to investors in what ultimately became my Turbo Trader newsletter. Back then it was a $10 stock and we’ve quintupled that initial investment.
GameChangers subscribers got a chance to buy Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) at $127 and Repligen Corp. (NASDAQ:RGEN) below $8. Both companies have come a long way since.
They keep coming up with new products to treat new diseases as well as old ones. They’ve benefited massively from the COVID-19 boom. Maybe they’ll even participate in the cure.
If they do, I’ll cheer. If they don’t, I won’t feel the sting. That’s what it’s all about.
I’m preparing a special report on this theme and will share it with you soon. However, if you want my top biotech ideas for COVID-19 and beyond, you’ve simply got to sign up for GameChangers.
And in the meantime, life goes on. We’re getting through this. You can hear my latest thoughts on my MillionaireMakers radio show. (Click here for recorded episodes and local stations.)
Update on Private ‘Off the Record’ Post-Election Summit
Finally, we are really excited to let you know about what is the first actual, in-person get together we’ve had since very early this year, and it is the just-confirmed, just-verified and ready to rock and roll financial event of this post-lockdown year.
Today, we are cordially inviting you to our private, in-person “off the record,” financial summit sponsored by the Investment Club of America. This confidential meeting will take place on Nov. 6-7 (right after the elections) in an undisclosed location in Las Vegas.
Why is this gathering so secretive? Because our First Amendment rights are being abridged by power-hungry politicians, and we need to maintain a low profile in an era of big government.
We live in dangerous times, in which our freedoms and wealth are threatened as never before. The November 2020 election has become the most important election of the 21st century due to the stark differences between the two parties. Trump and the Republicans are struggling to maintain power in the face of a never-ending pandemic. Their policies of tax cuts, deregulation and appointing conservative justices could be overturned soon.
As it stands today, the election betting odds still favor the Democrats. If the Biden/Harris ticket wins and the Democrats take over the House and the Senate, what will this mean for investors, entrepreneurs and the citizens of America? Will the stock market crash and gold soar?
Biden & Co. have promised massive tax increases on wealthy entrepreneurs, elimination of the long-term capital gains ‘break’ on stocks, bonds, gold, silver and real estate (with tax rates exceeding 50%).
They have also promised socialistic programs like Medicare for All, free college tuition, a New Green Deal, a wealth tax, severe limitations on free speech, a new Supreme Court, all on top of out-of-control government spending. The Great Suppression has begun!
That’s why we are holding this Post-Election Summit. It is critical to your pocketbook and your way of life.
And to help make sense of it all, we have brought together some of the world’s top experts to discuss the outcome of the November elections. What will it mean in terms of our citizens’ rights to speak out, to run our businesses, to invest, to travel, to assemble and to be left alone?
Will our freedoms and standard of living be curtailed due to new government policies? Will our wealth come under attack with new taxes, inflation and regulation? Will tech and gold continue to be the favorite stocks after the November elections?
We have brought out the best and the brightest analysts in finance, economics and politics to provide their analysis and answer your questions.
The Post-Election Global Financial Summit is an “in person,” face-to-face event — not a “virtual” conference. Due to legal restrictions, attendance at this in-person event will be limited. We urge you to register now and not be disappointed.
The price for this two-day event is $299. There are no discounts and we expect to sell out quickly. To learn more about the conference, go to https://globalfinancialsummit.co/.
After you register, you will be given the name and location of the Las Vegas hotel, and you then can reserve your room and make your travel arrangements. The hotel is only $99 per night, plus tax. There is no resort fee. Parking is free. We arranged a great deal for you!
Special Note: Please do not discuss this conference on social media. This is a private conference by special invitation only. Thank you.
Our Confirmed Speakers for This event:
Mark Skousen, veteran editor of Forecasts & Strategies and the producer of FreedomFest, will analyze the impact of the November elections on the economy, the dollar, taxes and your wealth. He will give specific recommendations — what to buy, what to sell and what to expect in the next year for stocks, bonds, the dollar, real estate and commodities.
Jo Ann Skousen, associate editor of Forecasts & Strategies and director of the Anthem Film Festival, will discuss her greatest concerns for the future — the protection of the twin pillars of freedom.
John Fund, senior editor of National Review and the nation’s foremost authority on politics and elections, will assess the good, the bad and the ugly coming out of the November elections.
Sean Flynn, economics professor at Scripps College (Clermont) and principal author of the top economics textbook in the country, will assess the “New Normal” after the elections — how to survive and prosper in an age of higher taxes, growing deficits and more regulations. As the author of “The Cure That Works,” he will update us on the future of health care and the pandemic.
Jim Woods, known as the Renaissance Man, the #1 financial blogger in the world according to Tip Ranks, and co-editor of Fast Money Alert with me, will discuss his favorite investment strategies for 2021.
Hilary Kramer, editor of the popular 2-Day Trader, a talk show host and a graduate of the MBA program at the Wharton School of the University of Pennsylvania, will discuss how the November elections will be a “GameChanger” (the title of her most popular book that was #1 on Amazon this year and was also on the Wall Street Journal bestseller list).
Bryan Perry, editor of the prestigious Cash Machine advisory service, will offer his best post-election investment choices in high-tech and high-income.
Adrian Day, founder of Adrian Day Asset Management and the world’s top authority on global investing and mining stocks, will offer specific advice on the outlook for global investing, the dollar, and commodities, with specific recommendations from blue-chip miners to penny stocks that are likely to double or triple in the coming year.
We just confirmed Barbara Kolm, vice president of the central bank of Austria, who will give us an update on Europe.
More speakers will be added soon and Roger Michalski, publisher of Eagle Financial Publications, will moderate.
Time is short, and now is the time to act if you wish to be part of this historic gathering. Attendance is strictly limited, so sign up today at https://globalfinancialsummit.co/.
CANNABIS CORNER: Solving the Last Mile Problem
We’ve talked about how the smart money in cannabis has swung from the cultivators at the literal ground level toward the retail customer where companies can actually add value and create efficiencies.
After all, the agricultural product is just a commodity, subject to the basic economic laws of supply and demand. Too much plant matter on the market pushes wholesale prices down until demand can catch up.
And with too many big farmers aggressively pumping out plant product, I’ve been predicting a shakeout on that end of the industry for years now. But their pain masks relatively robust conditions on the retail side.
Consumers stuck at home are more eager than ever to indulge in order to dull the boredom and anxiety of the pandemic. U.S. sales are up 40% from last year, approaching what could become a $20 billion run rate.
And because those consumers are stuck at home, the dispensaries have needed to hustle just as hard as restaurants and groceries to build out their delivery capabilities. Those who figured it out say their customers are never going back to the old system.
But emergency delivery systems become a drag when they become permanent. That’s why companies like Drop Technologies in Austin, Texas are changing the world.
Drop doesn’t run the delivery network. They don’t pay the drivers or handle the cash. They aren’t “the Uber of cannabis.” They simply built the software that allows online ordering and driver routing.
Dispensaries love it. This is the future. And while Drop isn’t public yet, retail investors can learn more about the company via its Crowd Funding site. I’ll let IPO Edge subscribers know my thoughts soon.