Seven years ago, I issued my most profitable trade of the last 16 years.
I recommended that readers consider taking a position in the iShares NASDAQ Biotechnology Index (IBB) at just $80 a share.
Today, the ETF is challenging all-time highs of $360 a share.
That’s a gain of 350% without doing a thing but pay attention.
I knew that 10,000 boomers would retire by the day for the next 20 years. I also knew they would control $1 trillion of disposable income, demand greater health care, and spend on products that would keep them going another few years. And that’s exactly what happened.
Baby boomers created one of the most profitable 20-year trends that changed just about everything. “You’d have to be an idiot to turn your back on this humongous growth market,” said Jody Holtzman, head of the AARP’s Thought Leadership unit.
- GNC Holdings said that baby boomers are one of its biggest buyers of its products for high blood pressure, digestion, eye and brain health, and muscle and bone density.
- The market for skin care and anti-aging products is expected to balloon from around $80 billion today to more than $114 billion by 2015, according to Global Industry.
- Companies and clinics are promoting hormone replacement drugs as a way to slow the aging process, too. Some cost as much as $15,000 a year. In 2011, consumers spent $1.6 billion on prescription testosterone therapies, almost triple the amount spent in 2006.
Is the run over?
Has the momentum run its course?
According to the fools, biotech is in a bubble. But it’s not. Biotech is not in a bubble… not with a sustainable 20-year trend, booming biotech advancements, and affordable care for millions that had no care to start with.
I can’t help but thank the biotech bears, though.
Every time they argue for downside, the IBB re-challenges its 50-day (and 200-day) moving averages before setting new highs. When – and if – the IBB fails at triple top resistance, which it could easily do, the bears will jump, call for a bubble, and set the IBB up for another respectable run to higher highs.
Wait for a pullback before buying the IBB and/or call options.