The stock market has certainly seen ups and downs in late 2018 and the first half of 2019. One sector that has consistently seen more increases in stock values is biotech. This industry involves the increasing use of technology to treat major physical limitations and create artificial organs, limbs, and other medical products. Biotech has been transforming lives for the last several years, and as the technology surrounding it becomes more advanced, accessible, and financially viable, the industry continues to grow and its potential continues to become more apparent. But can the metoric rise of this relatively new industry continue, and what will its future mean from an investment standpoint in the U.S. stock market? That’s where experts like Paul Mampilly come into the picture to offer guidance, advice, and strategic positioning when it comes to the future of biotech investing.
As a frequent guest on CNBC, Fox Business News and Bloomberg TV, Paul Mampilly is a biotech and stocks expert who follows the trends and educates everyday consumers on how to make the most of them. He does this through television appearances, talks, seminars, articles, and his regular newsletter in which he offers advice and strategy for investing—not only for major firms and funds, but for individual citizens who want to learn more about how to invest smart and with a long-term plan in place. He predicts that a massive time of growth is on the way for the biotech sector of the economy. Mr. Mampilly notes that the big-time investors are taking a close-hard look at biotech companies and their public stock offerings, while everyday or “Main Street” investors have been overlooking these high-performing stocks.
According to Mr. Mampilly, now is the time for smaller investors to get serious about biotech stock investments. Why? Because the larger firms tend to be slow-moving, and this could prove the perfect opportunity to jump in before they get into the ring and send stock prices soaring. By entering the biotech investment market now, you’ll be able to ride those soon-to-soar prices all the way to major personal profits and returns.
A Fresh Biotech Rally for 2019
Over the past five years, biotech firms have managed to raise an astounding $400 million through their public stock offerings. That is twice the amount of money raised during the previous five years. In 2018 alone, biotech firms developed and released 59 molecular entities, which are products that could yield high profits for them in the future. While pharmaceutical companies have taken a hit because of pricing scandals, biotech companies may be able to reap some of their growth in value and trading volume as investors look for fresh opportunities in 2019. Paul Mampilly, who is the founder of Extreme Fortunes and True Momentum investment groups, explains that this 2019 biotech stock rally does not surprise him. He has been watching small biotech firms achieve astounding success for years, and he knows how to predict which firms are the most likely to succeed.
Those massive successes are poised to continue. Like many technological advances, biotech builds on itself at an expansive rate. When smaller companies create breakthrough innovations and inventions, other new companies are able to build and expand on those breakthroughs to create an even more advanced final product. Meanwhile, as the technology becomes better understand and more advanced, it also becomes relatively cheaper. This allows for more companies and facilities to be able to afford the technology for themselves, which leads to more minds working on innovating it. Thus the cycle of innovation continues on and on perpetually, leading to accelerated innovation and economic growth in the biotech sector.
Benefits of Investing in Small Biotech Firms
One reason why biotech firms may be a wise investment choice is that they are experts at partnering their assets. Small firms do not have enough capital on their own in order to achieve their goals, so they seek out partnerships. These partnerships can be put to the advantage of the everyday investor. A partnership makes it possible to sell an idea rather than a product. Selling the capability rather than a quantity of items is a more tenable goal. Small firms have an easier time delivering and fulfilling their promises. The achievement of goals results in a positive perception from investors who might have been iffy about investing in biotech stocks.
These biotech firm partnerships also create greater stability within the industry. Unlike many other businesses, which closely guard their secrets and innovations, the biotech industry is eager to share what they’ve learned and the assets they’ve obtained. This stabilizes the industry as a whole and allows for greater growth than if they had simply hid away in their own offices and never shared what they’d discovered. Investors should stand up and take notice, as this will lead to increased and more dependable growth as time goes on within the biotech industry and beyond. The time to invest is definitely a small window with potentially massive rewards.
As a Senior Editor at Banyan Hill Publishing who specializes in helping main street investors build wealth and grow it, Paul Mampilly suggests that investors get in early on the right things. Individuals who are interested in making biotech investments should take a look at companies that have a clear mechanism of action. He also recommends that investors with small amounts to invest focus their efforts on biotech firms that have a long-term company-building approach written into their public offerings and statements.
So much of investing can tend to be reactive, where investors see moves being taken by major firms around Wall Street and then try to jump in to ride the trend. But when the world has caught on to an investment, it’s already too late. That’s the time when the potential returns are reduced as the market adjusts according to the increased demand. You want to get involved in biotech when there is less interest surrounding it early on, aside from niche investment advice like what you might find in Mampilly’s personal newsletter. The biotech industry is on the rise, but many of the major players don’t see it yet. That makes it the perfect time to jump in and ride the upcoming waves into the future.
Timing When to Invest in Biotech
Most investment and growth experts such as Mr. Mampilly recommend that companies remain private as long as possible. The best time to get in on biotech stocks is shortly after the IPO. Two to three years after the IPO seems to be the riskiest time for investing in a biotech firm. However, a lot of growth could be achieved by taking a big risk. The venture capitalists will also be flocking to biotech firms around this length of time after an IPO. In some cases, the small investor could get priced out of the market by waiting too long.
That’s why investing early on after an IPO is so important. An IPO is generally a time when the excitement and buzz surrounding a relatively new company is high. However, many larger firms want to wait around and see how it performs before they dive in with their investments. This leaves a narrow opening where smart investors can get in early enough that they can enjoy low stock prices and a lower overall risk to their bottom line. With low stock prices and low risk, you’ll be able to position yourself for powerful returns in just a few short years while avoiding the risky period that can lead to problems in the few years after the IPO.
— Paul Mampilly (@MampillyGuru) January 8, 2019
Politics could make a big impact on the biotech sector over the next year. While there has been a lot of political discussion about medication prices and implementing price controls so that people who need medicine can afford it, the government has not yet taken any action on it. However, the discussions alone have been enough for many investors to be weary of investing in big pharma. The biotech sector is not quite the same as big pharma. Small biotech firms may not be the target of politicians or angry members of the public who cannot pay for their prescription medications, hospital bills or medical devices.
The other good news is that many biotech firms are actively trying to upend the established healthcare industry, which could earn them major goodwill points from politicians and the public. If the public at large sees the biotech industry as the upstart alternative to the deeply entrenched industry of massive healthcare companies, it will likely help shift positive impressions towards these companies and keep them in positions to innovate and grow their bottom line over the next several years. Biotech has also been the root of many feel-good stories in the press that will likely continue—stories that involve small biotech startups creating innovations that have saved or transformed lives of everyday Americans and people around the globe.
In fact, the biotech sector could be putting forth ideas and capabilities that make devices and medicine less costly and easier to deliver to the people who need them. Main Street investors should keep a close eye on hearings before the Senate or the House of Representatives. Mr. Mampilly also suggests that investors take a look at the reputations of the CEOs of the small biotech firms. For example, convicted felon Martin Shkreli, who was the founder and CEO of multiple biotech firms, drew much ire for his actions. His behavior at public hearings scared investors, causing his firms to lose a lot of their stock value in a brief amount of time.
Fortunately, many biotech firms will have likely learned an important lesson from Shkreli and those like him. They’ll realize that public perception is an enormous element of their success or failure, and they’ll act accordingly when it comes to the actions they take, the people they hire, and the prices they set for their drugs and technology. This will help keep them on the public’s good side and the policy makers’ good sides in order to continue growing and earning more revenue as they innovate in the healthcare sector.
Predictions for 2019 Biotech Growth
With more than 25 years of investment experience at places as diverse as Bankers Trust, the Royal Bank of Scotland, Deutsche Bank, Sears and private hedge funds, Paul Mampilly knows how to grow money. He took one hedge fund and turned its $6 billion in assets into $25 billion in just two years. He managed to do this during the worldwide financial crisis of 2008 and 2009 without shorting the stocks. After years of making money for the ultra-rich, Mr. Mampilly now focuses his expertise on helping everyday investors grow their money. He suggests buying biotech stocks now, and he is bullish about their potential.
Mampilly believes that biotech not only has huge implications for the physical health of everyday people around the country, but could also be a powerful tool in helping them financially as well. This undervalued industry that’s still being largely overlooked by major players could serve as the perfect opportunity for smaller investors to get in early and strike while the iron is hot. Then, when major players get involved and start pumping the industry and stock prices up toward the stratosphere, wise early investors will have the chance to reap the massive rewards.
How to Follow Biotech Stocks
Paul Mampilly quit his Wall Street career at the young age of 42. While he did not retire, he did shift his focus from corporate growth to helping average people invest their funds and make money for retirement. Mr. Mampilly identifies growth investing, technology, small-cap stocks and other types of special opportunities that apply to the typical American worker who has some money to invest for the future. In his current work at the Extreme Fortunes service, Mr. Mampilly notes that biotech stocks are some of the highest performers in the portfolio. He suggests that everyday investors select a few small biotech firms and trace their stock history. Consumers should also go to the websites of those firms and to the FDA’s website in order to see what is in the works for those companies. Doing this research could help investors select a few biotech stocks to add to their portfolios.
Mampilly reminds his users regularly that research is key to any good investment. There are many investors who talk up their guts and instincts and how important it is to make decisions based on feelings. But Mampilly believes that the best investment decisions are based on a combination of thorough research and earned instincts.
What an Average Investor Can Do Today
An everyday investor can begin by investing in one or two firms now while the market is getting ready for a big boom. Mr. Mampilly also suggests that investors take a look at the SPDR S&P Biotech ETF (NYSE: XBI), which is where the small biotech firms have their stocks. He notes that you do not have to be part of one of his services or funds in order to make use of this great advice. If you do the things that Mr. Mampilly suggests now, you could be a part of the massive boom that is brewing in the biotech sector of the stock market.