May 5, 2014
- Instead of a death sentence, a one-pill-a-day treatment
- A silver bullet instead of a shotgun blast: The new approach to prostate cancer
- Buffett’s charting prowess and improvised lodging: Tales from our editors at the Berkshire Hathaway meeting
- “Bastardized socialism on credit steroids”: David Stockman unloads on the Chinese “miracle”
- Limeless margaritas on Cinco de Mayo… reader runs into the ugly reality of Obamacare… dropping the “other” F-bomb… and more!
“We desperately need new medicines to treat prostate cancer,” says our investment director Paul Mampilly.
Paul recently rattled off the grim numbers for us: “233,000 men are diagnosed with prostate cancer every year. And 29,480 men die from prostate cancer. One out of every seven men you know will get prostate cancer during his lifetime. Only lung cancer kills more men each year.”
Many companies are hunting for a cure. Perhaps they’re hunting for the wrong thing…
Paul is onto what he believes is “the greatest innovation in cancer treatment in 100 years.”
We mentioned it briefly last week when talking about a pill called Gleevec. “Gleevec,” Paul reminds us, “has made a kind of cancer called chronic myeloid leukemia (CML) into a disease that you just live with. And by live with I mean that you lead a normal life by taking a pill every day.
“And just so you know, CML was a kind of cancer that you died from in a few months, before Gleevec was discovered. Gleevec today is a drug that is set to generate $4.5 billion in sales for 2014 alone.
“So imagine the potential that lies behind a similar treatment for prostate cancer. Just imagine that. A pill a day and you get to live a regular life, even though you have prostate cancer.”
“Think of these kinds of drugs like silver bullets for specific kinds of cancer,” Paul goes on to explain. “It’s a silver bullet specially selected to pierce into your body’s cells and find the molecular target, like armor-piercing ammo.
“The difference is that the cancer silver bullets are targeting a critical bad actor, a bad guy if you will, that is one of the factors that cause cancer.” In the case of Gleevec, the silver bullet hones in on CML. In the case of the drug Paul’s talking about, it zeroes in on prostate cancer.
Contrast that with the shotgun blast of chemotherapy: Chemo kills cancer cells… and lots of healthy cells too. That’s why chemo makes people lose their hair, their appetite, their sex drive.
“If you had cancer,” Paul asks, “would you prefer a pill that allows you live normally with no significant side effects? Or would you like to go to the hospital every day, day after day, and have poison chemicals sent through your body using chemotherapy?”
“2014 is the critical year,” Paul says of the company developing this revolutionary prostate cancer treatment.
There are four opportunities to make big money this year, because the drug is at a critical point of testing. “If things work out and the results are favorable,” says Paul, “the company’s stock can go up by as much as 200% or more in a day.”
Case in point — a company called Sarepta Therapeutics. It released clinical trial results on Oct. 3, 2012. It zoomed from $15 to $45 — a clean triple. “I owned a few shares of Sarepta when this happened,” says Paul, “but I no longer own shares of this company now. Including this huge gain, and by getting in early, I cashed out of my shares in Sarepta for gains of 2,540%.”
Another example: Intercept Pharmaceuticals. If you owned it on Jan. 8 of last year, you’d have made as much as 586% in two days.
That’s the potential Paul sees in the prostate-cancer silver bullet — a nigh-perfect case of massive short-term gains that can be had from new lifesaving treatments. And as you’ve already gleaned, Paul knows how to identify these plays in advance. To learn how he spots them… and how you can profit on the back of them… simply follow this link.
Stocks are off to a blah start this week. As we write, the major indexes are in the red — the Dow at 16,456.
Pfizer — which Paul roundly castigated in our virtual pages last week — delivered an earnings “miss” this morning. Target replaced its CEO after the data-breach disaster of late last year.
Gold is up a sawbuck, to $1,310.
“Over any cycle, we will overperform, but there’s no guarantee on that,” said Warren Buffett on Saturday.
Buffett presided over Berkshire Hathaway’s annual shareholder meeting in Omaha, per usual. Not so usual: It’s the first time in Buffett’s 49 years running the firm that it’s missed his five-year growth target.
We’ve touched on the reasons before. Heck, so has Buffett: Berkshire is so big nowadays it can’t plunk money into the kind of small and undervalued plays that built Buffett’s fortune in the first place.
But that’s not the point: Once a year, the performance of Berkshire shares takes a back seat to the performance put on for the almost 40,000 people in attendance.
Look really hard and you can spot three members of our own editorial team in the crowd…
“Warren Buffett is one of my favorite closet technicians,” says Jonas Elmerraji, who made the pilgrimage.
“While it doesn’t jibe with his public persona, Buffett is very driven by things like sentiment and market conditions. He buys stocks at the end of downtrends and sells when uptrends are broken. He just doesn’t like to admit it.
“I’ve known more than a few fundamental guys like that in the past — they play coy when you pull out a chart, but the reality is that they’re looking intently at the technicals to pick stocks.”
Listen closely to Buffett’s aphorisms and you’ll hear the heartbeat of a trader, says Jonas. For instance: “Rule No.1 is never lose money. Rule No.2 is never forget rule No. 1.”
“What it really means,” says Jonas, “is that long-term profits come by cutting losers early and letting winning trades run. As technical traders, we have well-defined stop loss levels before we ever click buy. The hard part is to honor your stops when they get hit.”
“Booking a hotel last minute for the Berkshire meeting was nearly impossible,” says Thompson Clark of Agora Financial’s Microcap Millionaires.
So he opted to stay at a stranger’s apartment, via Airbnb — the website that links people up with rooms where they can crash.
We wrote recently about the trouble it’s run into from busybody bureaucrats trying to protect the hotel industry. But despite those obstacles, “Airbnb could very well be the largest hotel operator on the planet,” says Thompson. “The number of rooms they could offer is limited only by the number of physical dwellings on Earth.”
The origins of the name, you ask? “The company began when its founders were living in San Francisco. A big design conference was coming up, and attendees didn’t have places to stay.
“So the story goes, the founders offered up their apartment for rent. Not their whole apartment, however — just the living room. Along with a few air mattresses.
“They fed their temporary occupants breakfast, and the name was born: Air (Mattress) Bed and Breakfast.” Now you know…
“The China Miracle will be exposed. It never was one,” writes David Stockman at his Contra Corner site.
Mr. Stockman, the former White House budget director, sees nothing good coming from cities of empty skyscrapers: “China is a case of bastardized socialism on credit steroids. At the turn of century, it had $1 trillion of credit market debt outstanding — a figure which has now soared to $25 trillion.
“The plain fact is that no economic system can remain stable and sustainable after undergoing a 25 times debt expansion in a mere 14 years. But that axiom is true in spades for a jerry-built command and control system where there is no free market discipline, meaningful contract law, honest economic information or even primitive understanding that asset values do not grow to the sky.
“Nor is there any grasp of the fact that the pell-mell infrastructure building spree of recent years is a one-time event that will leave the economy drowning in excess capacity to produce concrete, steel, coal, copper, chemicals and all manner of fabrications and machinery, such as backhoes and cranes, which go into roads, rails and high-rises.”
How will it end? “Just look at the angry crowds which mill about when a bankrupt entrepreneur skips town and locks up his factory sans all the equipment… or the growing millions of rural peasants who have been herded into high-rises without jobs after their land was expropriated by crooked local officials and developers trying to make GDP quotas and a quick fortune, respectively.”
“I’ve never seen a rise in a commodity go so high so quickly,” says Nick Pappas.
Pappas is not a commodities trader. He’s a bar owner in the Tampa Bay area. The commodity he speaks of is limes… and the timing is awful, it being Cinco de Mayo.
“In just a few short weeks,” says Matt Insley of our natural resources desk, “the price of those little, green beverage accouterments went up a whopping 166%.” Suddenly, “four limes for $2” at the supermarket is “three limes for $4.”
Weather takes some of the blame: Lime-growing regions of Mexico like Veracruz got soaked by extra-heavy rains last winter. But big government in Washington figures in as well.
For starters, there’s the war on drugs: “As it becomes more and more difficult to move drugs into the United States, all of these cartels have diversified their businesses,” says Shannon O’Neil of the Council on Foreign Relations.
That includes the cartels moving in on orchard owners in Michoacan and demanding a cut of their business, “threatening to burn down their farms, rape their daughters or kill their children,” according to CNN Money. “The violence in the region and threats from criminal organizations has made it all but impossible for the U.S. Food and Drug Administration to certify the limes that are emerging from Mexico are being grown in a sanitary way.”
DEA… FDA… WTF?
Result: At a bar in Los Angeles called Petty Cash, they’re serving up “50/50” margaritas this afternoon — splitting lemon and lime.
If that’s more than you can bear to contemplate, there are straight-up $5 Fortaleza tequila shots…
“At this rate, I will probably never be able to afford health care,” writes a reader after he caught our item about the “young invincibles” choosing not so sign up.
“Although I am not young (50), and most likely not invincible, I am relatively healthy, thank goodness. So the minimum health insurance I signed up for in January for me and my girlfriend at a cost of just under $1,000 per month through Blue Cross/Blue Shield is now canceled.
“The aftermath is already setting in. Yes, I do believe that the Affordable Care Act was designed to fail. In the meantime, I heard the state Department of Economic Security office has a line that extends around the block, daily.”
“I don’t know if I am just becoming more aware of what our government does on a daily basis, or if it has truly morphed from something I used to know and trust,” a reader writes after our expose Friday on Operation Chokepoint.
“But the treatment so many people are describing lately can only be described as fascism, which is described as government control of private business. This is evident in the ever-increasing burden of regulations they issue every day, and their blatant abuse of power, which has no recourse. If anyone believes that we will ever see an economic recovery in America while these current practices remain, they will find themselves dreaming for many, many, years.”
The 5: An even better definition of fascism is big business in bed with Big Government, the better to shut out startup competition. Thus, the percentage of the U.S. workforce that’s self-employed is now at a post-WWII low…
“OK, credit given,” a reader writes back, recognizing that we know the Social Security Trust Fund is as much of a sham as he does.
“My concern,” he says, “is that any reference to a trust fund, or even a ‘trust fund’ in quotation marks, is not good. I wouldn’t be surprised if some of your readers believe in the existence of ‘the trust fund.’ I hope I am wrong about that!
“Reading your piece from the perspective of the choir to which I belong (yours), I conclude — keep up the good work!”
The 5: Well, thanks. Please understand what we’re up against: We have new readers coming in every day, and sometimes it’s just easier to use familiar terminology. Otherwise, it would get mighty tedious saying every day, “The value of the dollar fell against an ounce of gold this morning. It now takes $1,310 to buy an ounce of gold instead of $1,300 on Friday.”
Although on second thought, in the case of the “gold price,” maybe we’ll change it up like that now and then…
Cheers,
Dave Gonigam
The 5 Min. Forecast
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