A lot of the professionals out there are starting to sing the joys of Bio Tech since the election of Barack Obama to president. You might be asking yourself what the hell is BioTech? According to wikipedia which has been the easiest to consume definition that I have found it basically means, “technology based on biology, especially when used in agriculture, food science, and medicine“. That is basically what it is in a nut shell. So okay thanks for the definition now what does this have to do with Obama? Ah my young padawan(star wars reference) I am slowly getting there.
The reason that a lot of analyst and investors are so bullish on BioTech stocks is because of the primaries and the elections. Now you are scratching your head wondering what I am talking about. What I am talking about is that the second biggest issue besides the economy itself was Healthcare. Democrats are looking to become more actively involved in the distrubution of health insurance and preventive medicine. They are looking to bring health insurance to all US citizens as well as educate citizens about living a more healthy lifestyle. This means that more tax dollars will be pumped into insurance, which means that more people will start to go to the doctors more often, which means doctors will be prescribing more emergency treatments, pills and other medicines at a higher rate. A lot of these medicines and medical treatments will be engineered by bio tech companies.
If this is the case why start with low man on the totem pole and just invest in pharmaceuticals or insurance companies? Those are nice investments but we are looking for deals in this marketplace. Something that will be cheap to buy(even cheaper due to bad economy) which lessens my risk and that can have a huge upside. Doing this also calls for doing your homework. If you are not willing to do your homework then avoid this post all together. The cheaper a stock is the riskier it becomes in most cases. That’s why we will really avoid talking about penny stocks in this blog. Most Bio Tech companies are still hidden gems just waiting for the approval to bring their baby to life.
Also a good reason to look at Bio Tech companies due to the election of a democrat is the sure to come lessing of genetic restrictions that we have now. Democrats tend to be a little more science friendly than republicans and a lot of Bio Tech companies deal in Genetic testing. So things such as stem cell research and cloning might be less restricted now that we have a democrat in office. Those two items alone would be world shattering if any breakthroughs were made in those areas in the next four years.
There is a whole list of food innovations that will happen but I think that would happen under any administration and not just a democratic one. Even though a democrat may have one downside when it comes to that aspect. Democrats tend to frown on genetic modifying of food products so there might be more regulation when it comes to that field. So be on the lookout for these Bio Tech companies and maybe you can spot a bargain.