The Smart Profits Report: Issue #485
Friday, January 4, 2008

The Healthcare Sector: Recession-Proof Your Portfolio With This Robust Sector
By Marc Lichtenfeld
Senior Analyst, Mt. Vernon Research

We need a plan to combat the next wave of pressure on the economy and investments, as it seems to me that the upcoming “recession” is one of the most foreshadowed economic events in recent memory. Many commentators seem to think it’s inevitable.

The question is: How are you supposed to invest if there’s a recession on the horizon that everyone is predicting? The mere fact that it’s almost taken as a certainty now leads me to question whether one will even occur at all (I am a contrarian, after all!)

The thing is… nobody can tell you with any certainty whether we’ll experience a recession. But I do know one area that should perform well – no matter what the economy does – the healthcare sector…

The Healthcare Sector Will Always Be In Global Need

Recession or no recession, there is a simple, blunt truth: People will unfortunately still get sick and need treatment for heart ailments, cancer and a myriad of other conditions. That means the healthcare sector will remain robust – and particularly with the baby boomer generation about to retire. So where are the best bets?

Forget Big Pharma. I’m not crazy about these companies right now, as many of them have blockbuster drugs that either recently saw their patents expire, or will do so soon. This will open them up to generic competition. Pfizer’s (NYSE: PFE) anti-depressant drug Zoloft is a recent example.

However, I do like the biotech sector – especially, the smaller-cap names. As a specialist in the sector, I’ve seen many companies’ share prices quickly and easily double on positive clinical results.

And this will happen regardless of jobs data, home foreclosures, durable goods sales, or whatever other economic data is depressing the market.

Golden Healthcare Opportunities In Clinical Trials

There are so many healthcare companies that have made significant progress and are now in Phase II and Phase III clinical trials for nearly every condition you can think of. From cancer, to diabetes, to multiple sclerosis, to rare diseases, the list is extensive.

And the good news is that I’m about to get an insider’s look at the entire healthcare industry.

Starting on Monday, in San Francisco, the JPMorgan Healthcare Conference will host hundreds of companies in the biotech, pharmaceuticals, device makers and other healthcare sectors. Many more will show up just to meet investors and be part of the scene. It’s the largest and most prestigious healthcare conference of the year.

Industry heavyweights such as Merck (NYSE: MRK) and Amgen (Nasdaq: AMGN) will present in standing room only ballrooms, where powerful sound systems are needed so the people at the back can hear.

Trust me, this is as good as it gets in the healthcare sector. And I’ll be there to soak it all up, too – with one simple mission: To get the big boys’ take on the “health” of their sector and find the most profitable investments within it.

Tiny Rooms, Red-Hot Blackberrys, And Expensive Scotch

When I’m not stuffed into the jam-packed main rooms like a commuter on a rush hour subway train, I’ll likely be stashed away in one of the tiny rooms – you know, ones that probably double as the janitor’s closet when a big conference isn’t in town. Here, no microphone is needed. This space is for the handful of folks who want to go off the beaten path and listen to presentations from small and microcap companies as we search for the next “10-bagger.”

I’ll get the inside scoop for you, as I already have one-on-one meetings set up with several CEOs. Additionally, many of the best healthcare investors on the planet will be there, so I’ll have the chance to sit down with some of them and compare notes.

It’s an incredibly hectic conference, complete with frantic analysts bashing away on their Blackberrys and lavish cocktail parties, where one can talk stocks with hedge fund managers who are sufficiently loosened up by Dalwhinnie single malt.

I’ll report back to you on what I hear, who I spoke to, and the developments to look for in 2008. The only thing you won’t get is the free top-shelf cocktails. Yeah, I know… it’s a tough job, but someone has to do it.

Marc Lichtenfeld

Today’s Smart Profits Action Center

• Having started as an analyst and trader, we plucked Marc from TheStreet.com in the middle of 2007. And it didn’t take him long to pick a winner. In fact, with his very first recommendation, he bagged 99% on the first half of the position – and is riding high with a 104% gain on the remainder. He’s got plenty more lined up for 2008, so don’t miss out. Here’s how to profit.

• Find out how Marc grabbed that 99% profit for investors in mid December – and learn just how this simple yet powerful investment strategy eliminated fear and greed from the sell decision, reduced risk, and allowed for continued upside at the same time.

• Biotechnology is a highly specialized field that requires extensive knowledge of the players, products and investing climate in order not to get burned. That’s Marc’s business – and is why he’s able to dish big winners to readers who act on his recommendations. But if you’re just looking to gain exposure to the broader biotech sector through just one investment, there are several ETFs and mutual funds available. You won’t grab a huge win like Marc did, but one of the most popular is the iShares Nasdaq Biotechnology ETF (AMEX: IBB). It edged up 4.4% in 2007 and the company Marc recommended is one of its holdings.

Related Articles:

• Contrarian Investing: The Best Investment Strategy You Should Use Today
• Investing In The Fear Effect: How To Buy Bargain Stocks When There’s Blood In The Streets
• The Real Estate Market: Four Ways To Protect Yourself As The Housing Bubble Bursts

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