How to Speculate on Market Trends for 10-Bagger Results (and better)
Let me tell you about the best investment I’ve ever been involved with.
It’s a biotech company that’s gone up more than 6,860% in five years.
The company is called ImmunoPrecise Antibodies (TSX-V: IPA)(OTC: IPATF).
Gains from this one company are partly what’s allowed me to quit my day job and move my family onto a private estate, where I now focus on my own investing and publishing company.
The journey of ImmunoPrecise offers insight into long-term and short-term profit cycles. And it also shows how smart speculation can lead to the large multi-bagger returns we’re looking for when putting risk capital to work.
You would never buy a risky penny stock biotech with your safe (retirement, family, home, education) capital. They are two different types of investing. We cover both.
Speculating on Trends with Funds and Large Caps
Trends — or cycles — drive markets.
There are all kinds of trends.
Which way the dollar is moving, for example, is a trend. And an important one. Same with bond yields and the direction of the stock market in general.
The trend, as you may have heard, is your friend.
Similarly, there are trends that drive small groups of stocks. Cannabis, for example. Or electric cars and lithium.
One major bullish trend of the past five years has been biotech stocks. Over that duration, the SPDR S&P Biotech ETF has outperformed the S&P 500 by a factor of two.
Keep in mind, the S&P 500 itself is in the longest bull market in history. It is delivering historic returns.
So being able to harness sectors and industries that are outperforming within the S&P has been very profitable. Simply owning the entire biotech industry over the past five years would see you up more than 140%. That works out to 28% per year — or about three times the stock market’s average annual return.
At the sector level, you can do this with funds, like the SPDR S&P Biotech ETF (NYSE: XBI), that hold the the larger and more liquid companies in the space, like:
- Editas Medicine (NASDAQ: EDIT);
- TG Therapeutics (NASDAQ: TGTX);
- Ionis Pharmaceuticals (NASDAQ: IONS); and
- Others that are included in the sector index that the fund is tracking.
It’s also possible to speculate with individual companies. This is riskier, but the reward can be higher. Take the three companies I just mentioned there as an example.
Two of them (TG and Editas) outperformed the index. TG was up as much as 800%. The one that didn’t outperform the index (Ionis) was up 67%.
These are large, liquid companies. The kind I focus on in my monthly Foundational Profits letter, where I identify and exploit these cyclical trends in biotech and beyond.
It’s also possible to speculate on trends like this with smaller companies — taking on more risk for the opportunity at even higher returns.
Smallcap Speculation
This is where smaller companies like ImmunoPrecise Antibodies come in.
The company began trading in late 2016 via reverse merger.
ImmunoPrecise is in the business of providing antibody-producing cell lines in mouse, rabbit, and other animal platforms, as well as being able to humanize them.
These antibodies are the building blocks of today's immunotherapies — a new class of drugs that use the body's own immune system to kill diseases. Antibodies attach themselves to disease cells and serve as markers that tell the body which cells to attack.
But the key is finding the right antibody to do the trick. That's where ImmunoPrecise comes in: it can make antibodies designed to attack a specific target.
ImmunoPrecise was already profitable — unlike many small companies — when it came to trade.
Given the growing number of immunotherapies and how valuable they’d become, speculating on a tiny yet profitable antibody manufacturer seems like a smart play. AbbVie, after all, had just taken over the market with Humira, which is antibody-based, as the world’s best-selling drug.
And so that’s what I did, getting members of what is now Nick Hodge’s Family Office Advantage in ImmunoPrecise Antibodies back in 2017, shortly after it began trading, building that position at C$0.73.
Those shares have since gone up more than 423%.
This is something you can do with any sector, and I have made a living out of starting over a decade ago with the renewable energy / cleantech trend, which now ironically happens to be back in vogue.
I’ve done it with battery stocks, solar stocks, 3D printing stocks, gold stocks, cannabis stocks, lithium stocks, and as you’ve seen here, biotech stocks — leading to thousands of percent in total returns and millions of dollars for myself and my readers.
Leveraging the Cycles
The bulk of my gains in speculations have come via private placements. This can be a private placement while a company is public or while it’s still private.
While often extremely risky because the opportunities are so early stage, using private placements to speculate at the beginning of a company’s lifecycle can lead to life-changing returns. As long as you know what you’re doing.
Getting access to and vetting private deals is something few people can do well consistently. I’ve been fortunate to have success in this arena for the past half decade, using the network I’ve created to procure dealflow.
ImmunoPrecise was one of the first private deals I ever did, initially funding the shell it went into at a pre-consolidated C$0.05, and then getting readers into the C$0.30 listing round when I was more confident in the opportunity. Shares have consolidated 5:1 in order to list on the NASDAQ, which happens at the end of 2020.
Gains from the shell level have so far been as high as 7,536%. And as high as 1,172% from the listing round.
It has changed my life and the lives of those who participated at those levels.
You need to be high net worth — that is, an accredited investor — to participate in deals like this. It’s a bullshit rule, but then again most are.
Access to deals like this comes with full membership to the Hodge Family Office. Membership to that service gets you access to all my other services for free.
Identifying and exploiting trends across all sectors like this is what Digest Publishing, Daily Profit Cycle, and our suite of premium publications were built for.
Hopefully this gave you a bit of insight into how I do that across multiple durations and risk levels, and into the kinds of returns it can deliver.
Call it like you see it,
Nick Hodge
Editor, Daily Profit Cycle
Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
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