It’s been said that if you somehow had access to “tomorrow’s newspaper” today, you could make a boatload of money in the stock market.
That’s particularly true in the biotech space, where company news can send a stock soaring in a single day.
Of course, it’s impossible to actually get tomorrow’s news today.
And insider trading is illegal — as one of Goldman Sachs’ biotech analysts recently learned when he was nabbed by the SEC and FBI. (Funny story: his last name is Viggiano, but his co-conspirators called him “Rigatoni” in their clandestine messages. I find that hilarious for some reason.)
But there’s also a third way to make good money on biotech stocks that’s both legal and possible … thanks to the research and expertise of my good friend and Money & Markets colleague, Mike Carr.
Mike uses a proven technique called seasonality to pinpoint the very best time of the year to invest in biotech stocks.
In a moment I’ll explain why biotech stocks get an extra lift during this time of the year.
First though, it’s important you understand why seasonality works so well across all market sectors…
The Stock Market’s Many Seasons
As human beings, we’re creatures of habit.
We wake up around the same time every morning. We vacation around the same time each year. And we all crank up the furnace during winter months to beat the chill.
When you add up these repeated habits from billions of people across the world, seasonal patterns start to emerge. That’s why fuel prices spike as winter begins, and then again during the summer road trip season.
“Sell in May and go away” is probably the most well-known seasonal pattern out there. It’s a reference to how stocks tend to outperform before the start of summer and underperform afterward.
It sounds like a cliché, but the old adage has been good advice for most of the last century.
Going back to 1928, May and September have been two of the three worst-performing months for the stock market (on average). Average returns from November to April have been more than twice those of the following six months.
Think about that. We’re talking about nearly 100 years of market activity. A period of time that saw World War II … the dawn of globalization … and the invention of television, the cellular phone and the internet.
It seems impossible that such a consistent record of seasonality-driven performance could exist even as the world underwent so much change.
Yet seasonal patterns persisted through it all.
Now, let’s make one thing clear. Averages are exactly that: averages. There will always be variation and the occasional exception that proves the rule. But seasonal patterns are still relatively consistent and extremely powerful.
Like the “presidential election cycle,” where Schwab analysts pored over data going back to 1950 and found that the highest average gains tend to come during a new president’s third year in office.
Seasonal patterns can even be influenced by specific events — such as big industry trade shows and conventions.
Industry insiders sometimes spend all year developing show-stealing performances for these events. When they take to the stage and announce breakthrough new products, partnerships or critical news, their company’s shares rise in response.
And this is a pattern that repeats every year. The same way that Apple hosts a special event to unveil its yearly iPhone upgrade, other innovators will use conventions such as the Consumer Electronics Show to build buzz for their hot new products. And investors consistently take notice.
So even while the market’s larger seasonal forces might be nudging shares up or down, individual industries will still exhibit unique patterns at various times each year.
Build a Seasonal Profit Calendar
For investors, these seasonal patterns can be an extremely powerful tool. They can help you intuitively zero in on the market’s biggest opportunities — or steer clear of industries that are starting to slow down.
With enough research, you could essentially flesh out a complete “seasonal profit calendar,” to focus on the hottest stocks and industries from month to month.
In fact, our Chief Market Technician Mike Carr has done exactly that.
Based on over a decade of research and back testing, Mike has developed a new system called the “Apex Profit Calendar.” It combines our proven Green Zone Power Ratings system with a unique seasonality factor that can transform the way you see the stock market.
Systems like this are exactly why I couldn’t wait for Mike to join our team.
And the results speak for themselves.
For example, Mike’s system identified a seasonal trend for biotech stocks that comes around each June — coinciding with the industry’s annual trade show. This seasonal boost has repeatedly driven big biotech gains from one year to the next:
- Meridian Bioscience Inc. (Nasdaq: VIVO) saw a 53% gain between May 19 and June 30, 2020.
- LeMaitre Vascular Inc. (Nasdaq: LMAT) rose 26% during that exact same time frame a year later.
- And UFP Technologies Inc. (Nasdaq: UFPT) jumped 27% in May/June of 2023.
And going back to 2013, Mike’s new strategy averaged an 11% gain each year during this short trading period — 1 of 15 profit seasons Mike has plotted out for each year.
For more on seasonality — and how Mike’s taking advantage of it for remarkably consistent gains — go HERE. But hurry, he’s only going to have the doors open on this initial opportunity for a few more days…
To good profits,
Chief Investment Strategist, Money & Markets