Paul Mampilly wants to tell everyone that the market is experiencing a rejuvenation. The rally is being “rejuvenated” because it is happening in a sector that several investors have forgotten about in the recent past. Now, this sector is presenting some extraordinary opportunities, and investors with the most money are aware of it. They’re not just aware of it; they are anxious to be involved in it!
Paul Mampilly is telling us that this previously neglected area is “biotech.”
Paul Mampilly knows what he is talking about because he holds a special place in the history of Wall Street. When he started his career on Wall Street in 1991, he was an assistant portfolio manager for Bankers Trust. He quickly advanced and made a name for himself at ING and Deutsche Bank where he had the chance to manage accounts worth millions of dollars.
That’s when executives with Kinetics Asset Management came calling and asked him to manage their hedge fund, and Paul’s talents really began to shine. He increased the company’s assets to $25 billion, and Barron’s named the hedge fund one of the “World’s Best” because he earned 26 percent annual returns.
The Templeton Foundation invited Paul Mampilly to participate in its prestigious investment competition, and he started with a $50 million account. In two years, he had managed to generate a 76 percent return, and in the end, the account had grown to $88 million during the 2008-2009 financial crisis.
There has been movement in the biotech industry, but it has been “behind the scenes,” and this means that an enormous rally is about to take off in the biotech sector. There are four major signs that Paul is telling the truth, but most of the investors on Main Street are not paying any attention to them.
The four signs mean one very important thing to Paul Mampilly:
Investors with a lot of money to invest are willing to put it into biotech, but we are going to get there before they do.
Paul is going to discuss these four clues in his Bold Profits Daily, and he will also tell you why you need to get in on the action right now so that you don’t miss the rocket that is about to take off.
The biotech industry was extremely hot in 2013, 2014 and 2015. Some people even made 1,000 percent returns on these stocks. Recently, Paul Mampilly has been seeing insiders purchase large and small stocks, and the result has been that these stocks were moving up very slowly. Most people haven’t noticed that this is happening.
Now, what’s happening in biotech stocks is beginning to be known. Last week, Bristol-Myers purchased the bio-pharmaceutical company Celgene for $74 billion, and those who had money in Celgene made a 30 percent profit overnight. Those who have Bristol-Myers stock will also benefit from the deal because it was such a good deal. In December, GlaxoSmithKline paid $4 billion for the pharmaceutical company Tesaro, and Tesaro shares shot up by 70 percent in one day!
In addition to the examples above, Wall Street sold 51 IPOs while many people have been despondent over the state of the stock market. All of these examples are telling.
Paul Mampilly thinks that everyone needs an ETF.
The ETF that Paul is focusing on and recommending is an ETF that will introduce you to companies like Celgene. The ticker signal for this particular NASDAQ Biotechnology ETF is “XBI.” This ETF has the potential to move more than others because equal weight is being given to each company. Other ETFs give the larger companies more weight than the smaller companies. So, if a small company is the one that increases by a significant amount, the entire ETF goes up.
Paul Mampilly takes all of the guessing out of the stock market with his service “Extreme Fortunes.” Subscribers will be introduced to small biotech companies that are about to increase by 300 percent, 500 percent or even 700 percent.
People who already subscribe to the Extreme Fortunes service already know that the best-performing stocks are in the biotech sector. Those who do not subscribe to the service can get in on this trend by purchasing SPDR S&P Biotech ETF. This ETF also uses an equal-weighted strategy where equal weight is placed on the small biotech companies and the larger biotech companies.
Eli Lilly announced that it would purchase Loxo Oncology last week for $8 billion. This is the largest acquisition of its kind, and it caused the SPDR S&P Biotech ETF XBI to rally 6 percent and the NASDAQ Biotech ETF IBB to rally 3.3 percent since the company made the announcement.
These investments appear to be similar, but they are very different. They both contain”biotech” in their names, but what is inside is what matters. The IBB is known as a “market cap weighted index,” so large companies are given more weight. The top 10 companies add up to 56 percent of the weighting, but there are 225 companies in the index.
In contrast, the XBI is a “modified equal weight index,” and a majority of the 120 companies have weightings of only one or two percent. The top 10 companies in this fund only comprise 15 percent of the fund.
In the middle of 2018, the market was rising at an accelerated rate, and the XBI that gives each company equal weighting outperformed the IBB. The bad news is that small stocks suffer when the market begins to decline because investors sell these stocks at greater rates than the larger ones. Therefore, the IBB outperformed the XBI at that time.
The choice that Paul Mampilly would suggest you make would be to purchase stocks within the equal-weighted index so that you will have broad exposure for your investments.
The healthcare industry is subject to new regulations, and the regulation of drug prices has the biotech and pharmaceutical industries concerned. These industries have even delayed raising drug prices because they did not want to be seen as the cause of the increases. Some of these companies even pledged to refrain from raising their prices until the end of last year. These companies included Eli Lilly, Amgen, Allergan, Novartis, Johnson & Johnson, Bristol-Myers Squibb, Merck and Pfizer.
During the presidential campaign, candidate Donald Trump expressed his agreement for giving Medicare bargaining power, and the democrats were in favor of offering it, but President Trump did promise to lower drug prices. The concern is that President Trump may join with the democrats and offer the bargain to Medicare, and this is expected to hurt biopharma’s valuations. It seems that we don’t need to worry about this occurring at this time because President Trump has not mentioned it recently and his party is against it.
Even so, the price of drugs is a bipartisan issue, and both sides are expected to come up with new ideas on managing it. As a matter of fact, Health and Human Services has introduced its proposals for managing increases in drug prices. One of those proposals is to remove drugs with rapidly increasing prices from guaranteed Medicare coverage.
This year, we have innovative drugs to look forward to with the FDA approving new drugs at a record pace. So, it seems that biotech stocks are expected to enjoy a good year this year.