In 1901 a short, dark-haired German woman by the name of Auguste Deter walked into the office of a Frankfurt psychiatrist escorted by her worried, sleep-deprived husband.
Auguste, only in her early 50s, had become…
Disturbingly absent-minded, making obvious mistakes in food preparation, neglecting her housework, stashing objects in nooks and crannies around their apartment, wandering aimlessly from room to room, and suffering from intense bouts of jealousy and paranoia.
She would also have trouble sleeping, would drag sheets across the house, and even scream for hours in the middle of the night.
The psychiatrist’s name was Dr. Alois Alzheimer.
After her post-death examination in 1906, Auguste Deter would go down in history as the first patient to be officially diagnosed with the mysterious and horrific illness that, from then onward, carried her physician’s surname.
Today the same scene plays out nearly half a million times per year in the United States…
Worried husbands, wives, sons, and daughters escort their aging loved ones to a doctor’s office and leave with the same devastating diagnosis.
More than a century after the disease was identified, Alzheimer’s is growing into a full-scale epidemic.
In the United States alone, more than five million patients suffer from this form of dementia.
And over $200 billion/year goes to the cost of patient care — a figure that’s set to rise by 500% in the next 40 years.
To date, more than $5 billion has been spent by large pharmaceutical companies around the world in search of a cure.
I’ve been preaching for years that Alzheimer’s is going to be a huge market — and a huge windfall for investors.
Now this same bullish scenario is being played out across the entire biotechnology sector for cancer, heart disease, and increasingly for the new epidemics of diabetes and obesity…
And that’s why, next to energy, health care is the greatest investment of the century.
And Biotechnology is Ground Zero
Biotechnology is where all of the revolutionary drugs are being developed. It is the next frontier for medicine.
It’s an often-stated but rarely-used investment maxim: Get in front of a major trend as it’s beginning to form — and ride it for profits as the mainstream media and investors inevitably join the profit party.
In my last article, I told you how homebuilder stocks were hitting new multi-year highs.
Most investors had no idea this was happening because of the psychology of the market…
To wit: If you ask 100 people their thoughts on the housing market, 99 would say it is in a depression, to run from it like it’s on fire.
Yet homebuilders are sitting at five- to seven-year highs.
It’s a stealth bull market — and not many are in it. It is, as we say in the business, a lightly attended trade.
Well, dear reader, biotechnology is doing the same thing…
Not many people know this, but the NASDAQ Biotechnology Index is hitting a 12-year high. And many biotech stocks are making all-time record highs!
Take a look at an YTD chart of the NASDAQ Biotechnology Index versus the S&P 500:
It’s outperforming the broader market fourfold.
The long-term chart is even more impressive.
I started in this business in 1994. Had I invested $10,000 in biotechnology at the start of my career, I’d be sitting on a cool $80,000… whereas had I left it in an S&P 500 Index fund, I’d be sitting on $30,000.
Why is biotechnology in a bull market?
Demographics is Destiny
Demographics.
Here’s what I wrote in these very pages in November 2007:
October 15, 2007, might have been just another Monday to you, but for me, it marked the start of one of the greatest bull markets the 21st century will experience.
You see, on that day a woman named Kathleen Casey-Kirschling filed to receive her Social Security retirement benefits.
What’s so important about that?
Kathleen was born on January 1, 1946. She’s officially the first baby boomer to file for Social Security benefits.
Behind Kathleen is a line of 80 million more like her, ready to collect their share of the government-promised pie.
But this is more than just a conga line of soon-to-be senior citizens looking to get paid…
This event will have a paradigm-shifting effect on the nation — as well as your stock portfolio.
As the baby boomer generation rushes into old age like a colony of army ants, health care spending is expected to skyrocket. And all this spending represents a boom for drug and medical device developers and manufacturers.
You can already see the fruits of the biotech age in two biotechnology stocks I originally covered in 1998…
They are Alexion Pharmaceuticals and Regeneron.
And to give you an idea of what a drug breakthrough can do for your portfolio, here are charts of ALXN and REGN, respectively:
At the time, Alexion and Regeneron were microcap stocks, trading at market caps below $100 million…
Today they’re valued at $20 billion and $11.5 billion.
Just like energy, demand for medicine will grow dramatically as the population grows and gets older.
It’s time to buy drugs.
The original bull on America,
Brian Hicks
Check us out on YouTube!Brian is a founding member and President of Angel Publishing. He writes about general investment strategies for Wealth Daily and Energy & Capital. For more on Brian, take a look at his editor’s page.
