How to Make Money in Biotech Stocks, No M.D. Required

How to Make Money in Biotech Stocks, No M.D. Required

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DailyWealth

How to Make Money in Biotech Stocks, No M.D. Required
By Dr. Steve Sjuggerud
Tuesday, November 25, 2014

“If you catch just one biotech bull market in your lifetime, you may never have to work again…”

I’ve written that many times in our research. Why? Because biotech booms are like nothing else in American investing…

The potential gains – without leverage – are extraordinary. As one example, biotech stocks gained over 600% in their three-year bull run ending in 2000.

That wasn’t a one-off occurrence… Biotech stocks have delivered triple-digit returns (or near-triple-digit returns) in many calendar years (based on the Datastream U.S. Biotech Index). Take a look:

Year

Percent Return

1985

146%

1989

64%

1990

104%

1991

170%

1995

88%

1998

75%

1999

147%

It has been 15 years since we’ve seen a triple-digit year in biotech stocks. We’re due for a great run in biotech. And right now, I believe we’re in the middle of it…

Is there a way for you to make money here, even if you’re not an M.D. or some other type of medical expert?

I think there is… and it’s much simpler than you think. Let me explain…

Paul Tudor Jones is a billionaire… He became a billionaire through investing. In the latest book by Tony Robbins, he says:

“You don’t need to go to business school; you’ve only got to remember two things. The first is, you always want to be with whatever the predominant trend is.”

That’s how Paul Tudor Jones made his fortune – by sticking with the trend. History shows that Paul Tudor Jones’ philosophy is right on the money when it comes to biotech stocks (you just want to change “business school” in his quote to “medical school”).

In short, you want to stick with the predominant trend when it is going up. And most importantly, you want to get OUT when it is going down.

Why? Paul Tudor Jones explains it:

“The whole trick in investing is, how do you keep from losing everything? If you use the 200-day moving-average rule, then you get out. You play defense, and you get out.”

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How to Make Money in Biotech Stocks, No M.D. Required

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