The numbers say we aren’t quite there.
But if it looks like a bear market … and it smells like a bear market … it’s a bear market.
Here’s the thing: Down markets give us a chance to strategize for the next run higher. (On that front, click here to sign up for an upcoming presentation from Chief Investment Strategist Adam O’Dell. Seriously … just do it. It’s free.)
In today’s Investing With Charles, Research Analyst Matt Clark and I show you how the pandemic was a catalyst for stocks within the genomics mega trend.
Let’s explore Moderna’s 1,700% surge out of the coronacrash, and how we can find the stocks with similar potential this time around.
What’s a Mega Trend?
Matt: When we’re in a bear market, it presents an opportunity, and you have to know how to spot it. I wrote about this on Tuesday, but you have to spot the mega trend.
We’re huge on mega trends because the momentum of the trend pushes companies involved higher.
Charles: It’s in motion. Nothing’s going to stop it.
Matt: History shows that stocks involved in these trends soar higher all the time, especially coming out of a bear market. And we want to talk about a mega trend that we’ve talked about at length: genomics.
Charles: DNA-based medicine.
Moderna Is Part of a Massive Mega Trend
Matt: Genomics involves sequencing to find new therapies for a multitude of diseases. It also has moved into the data storage sector. It is a massive mega trend that is just getting underway. Let me show you why.
In 2017, the global next-generation sequencing and clinical genomics market size was only about $836 million.
By 2028, according to forward projections, that market size is expected to grow to $5.8 billion.
That’s 604% growth in just over a decade!
If that’s not the definition of a mega trend, I don't know what is.
Charles: You might be wondering: “Where do these billions of dollars go? What are we even talking about here?”
Think about how many babies are born every year and how every parent wants to know if the baby is at risk or if the parents need to be aware of anything. Think of the potential for prenatal genetic testing and postnatal infant genetic testing. That little sliver of the market alone is huge.
Think about every disease that has, whether it's bacterial, viral or it’s something like cancer or it's, I think the word is mutagenic … all of these have a genetic component.
And if you can attack the disease at a genetic level and neutralize it, that's a game-changer. You have essentially rewritten the rules of medicine at that point.
If the genomics story ended with medicine, that by itself would be life-changing. But it doesn't stop there.
Genomics will throw computing out the window as we know it. This is for the tech geeks out there. Moore's Law is the idea that the amount of data and the amount of processing power on a chip doubles every 24 months.
Well, we're kind of reaching the end of current technologies' ability to grow. The microchip as we know it, we're reaching the end of the line on what that's capable of doing.
Genomics has created this entire new frontier of bioengineering, where you can actually store data in DNA. I'm not smart enough to tell you how that works, but yes, you essentially have a DNA-based hard drive that stores data.
Add several zeros to the end of how many bytes current drives hold. DNA-based storage allows us to get there.
Matt: Yeah, and I think we're just on the cusp of this. We saw this starting to develop around 2018, when I first talked about the projections of clinical genomics.
And I want to focus on how one stock within the genomics mega trend was taken to incredible heights thanks to the COVID-19 pandemic.
COVID Sent Moderna Into Overdrive
Charles: In early 2020, we had the biggest kind of real-world test case for genomics-based medicine. And that was, of course, with the mRNA vaccines. Now, MRNA, that's actually the ticker symbol of Moderna Inc.
Matt: It is.
Charles: So Moderna was swimming in this pool long before anybody had ever heard of the COVID-19 vaccines. The COVID-19 vaccines created this amazing, real-time sense of urgency here to roll out DNA-based technology.
And so this was the first real kind of proof-of-concept using mRNA technology in the wild. And by all accounts, it was a rip-roaring success.
The virus has since mutated, and vaccines have lost some of their potency because of those mutations. But now there’s a formula in place. It's very easy to tweak the production and come out with a new vaccine next week, subject to safety testing and whatnot.
But the vaccine rollout caused Moderna's stock price to just rip higher in 2020. The stock soared because all of a sudden, the viability of its technology became obvious to the world.
Matt: To illustrate how Moderna moved along with similar biopharma stocks, let’s review MRNA’s stock chart.
From its low during the coronacrash in February 2020 to August of 2021, Moderna stock ripped 1700% higher! It traded nearly double its 50-day simple moving average and crushed the overall biopharma sector, which moved 90% higher over the same time frame.
So Moderna stock just exploded higher in a year and a half.
The accelerator in this case, however, was COVID-19, unfortunately. It’s not something we like to see, but it's just kind of the nature of how things are. So you have the COVID-19 accelerator and the rush to develop vaccines. It moved Moderna and similar stocks astronomically higher.
The coronacrash sent the Dow Jones Index 28% lower in a short period of time. All the major indexes tanked.
Coming out of that, the genomics mega trend and the race for a vaccine sparked a huge bump up in genomic stocks.
That's exactly what we saw with Moderna. That's exactly what we saw with NVIDIA following the tech crash of the 2000s. People started to see the potential for artificial intelligence (AI) tech in 2016, and that stock ripped 4500% higher.
Charles: Oh, that's it. Yeah. Use the bear market as an opportunity to identify the next big boom. It gives you that pause to do your research there and get together the pieces for the next big move.
Matt and I take a deep dive into how genomics will lead to a “personalized pill” for each and every person, how a little bit of investing legwork can lead to massive portfolio gains and what we’re doing to find the next stocks set to soar out of today’s bear market.
On that last note, our chief investment strategist, Adam O’Dell, is one you want at the helm as we navigate this rough market.
He’s developed a system that will find the next stocks set for 1,000% gains after a major crash like we’re experiencing today.
And it just takes three critical steps:
- Find the mega trend.
- Find the right stock within that mega trend.
- Buy that stock at the right time.
He wants to help you turn a $10,000 investment into $100,000 in a year. His goal is to 10X your profits.
And his upcoming presentation on June 9 will show you how.
Click here to be added to the guest list and get ready for massive opportunity out of this bear market.
Where to Find Us
Don't forget to check out our Ask Adam Anything video series, where Chief Investment Strategist Adam O’Dell answers your questions.
You can also catch Matt every week on his Marijuana Market Update. If you are into cannabis investing, you don’t want to miss his weekly insights.
Remember, you can email my team and me at Feedback@MoneyandMarkets.com — or leave a comment on YouTube. We love to hear from you! We may even feature your question or comment in a future edition of Investing With Charles.
To safe profits,
Charles Sizemore, Co-Editor, Green Zone Fortunes
Charles Sizemore is the co-editor of Green Zone Fortunes and specializes in income and retirement topics. He is also a frequent guest on CNBC, Bloomberg and Fox Business.