| Investing in 2005: Biotech Stock Predictions, Gold Coin Investments, and Hot Energy Stocks
The Investment U e-Letter: Issue # 419 Investing in 2005: Biotech Stock Predictions, Gold Coin Investments, and Hot Energy Stocks Last week at our annual 7th Investment U Conference, I delivered my presentation “Investing in 2005: Top Techniques for Sizing Up the Value of Any Investment.” I thought I’d share a brief version of what I talked about with you now… To me, it doesn’t matter if it’s a hot energy stock, gold coin investments, or a biotech stock. I size investments up with the same basic principles…
Let’s take a quick look at energy stocks, gold coin investments, and biotech stock predictions, to show how these three apply… Gold Coin Investments: Yes, Yes and Yes While most people don’t want to hear it (which tells you this investment is hated!), investments in gold coins qualify for all three of the above. Clearly they’re hated. They’re an exceptional value, trading at their smallest premiums above their melt value in their history, and the uptrend has finally begun. Take a look at this chart of gold coin prices from 1978 to the present…
Hot Energy Stocks: Two Out of Three Ain’t Good Sure, energy stocks are hot. They’re in an uptrend. And some may offer decent value, but they’re not hated right now. Energy stocks are all that anyone wants to hear about, so there’s no investing here for me in 2005. One way of seeing how everyone loves hot energy stocks right now is to look at the assets (the blue line below) that have flowed into the Rydex Energy Fund since 2002: Chart source: http://www.sentimentrader.com (a highly recommended site).
Biotech Stock Predictions: How They Could Become a “Strong Buy” Money flow into biotech stocks is at its lowest level in three years (judging by the chart below). So biotech stocks are becoming more hated by investors every day. Chances are, even more assets will flow out of biotech before the bottom is hit. And biotech stocks are still in a downtrend. I’m tempted to make a prediction that we may be a year or more away from a “strong buy” in biotech stocks here yet. Chart source: http://www.sentimentrader.com (yes, we like this site!).
In sum, regardless of the investment, I look for the following three things and apply them to my 2005 investing strategy:
When you find all three together at once, it’s time to take a big position. Of all ways to invest, I’ve found this to be the lowest-risk, highest-return way to make money. Good investing, Steve Related Articles
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