AverageJeremy

Back from vacation

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Now I feel refreshed and recharged and ready for a strong run before the end of the year. The question becomes, where do I invest my money? That really is the million dollar question too, isn't it? I believe that to figure out where to invest, you need to figure out where the fund managers are going to invest next. I read somewhere that around 70% of the capital invested today comes from funds such as mutual funds, index funds, etc. Those billions and maybe even trillions of dollars drive a stock's price today. So, the question really becomes, where are the fund managers looking to invest those billions of dollars? I believe they are looking towards tech stocks. There is evidence of this trend due to the Nasdaq's performance versus the Dow Jones and the S&P 500. The Nasdaq has been performing better and making larger percent gains than either of the other two markets over the past two months. I believe that this trend shall continue for the next 18 to 24 months. Stocks such as Apple (AAPL) are living proof that more money is being invested in tech stocks these days. I know that I don't have AAPL in my Strategy Lab portfolio, but only because when the competition started I felt that it was too expensive. Of course, now I'm kicking myself for not getting in on the Apple rocket ship back in August. Even at $140 a share Apple would have been a steal. Since that price point Apple is up around 25%. Currently the Nasdaq is at around a 13% to 14% gain for the year versus an 8% to 9% gain for the Dow Jones and a 6% to 7% gain for the S&P 500. Whether this trend will continue for the next 2 years is anyone's guess but I can see the potential in stocks like Apple over that period.

But enough about the goings-on in the world, it's time to talk about another one of my stock choices. My largest gainer so far has been Sangamo Biosciences (SGMO). This stock has gained more than 70% in just under 3 months. For the year this stock has gained over 100%. (Full disclosure----I personally own shares of SGMO) I have been watching this stock for several years now and I have seen it go from the lofty heights back in 2000 and 2001 during the Internet Bubble all the way down to it's lowest point in 2003 when it hit as low as $1.23. Sangamo is another of my big pharma buyout hopefuls. But even without any news or rumors of a buyout Sangamo has been performing far better than I ever expected. Sangamo Biosciences develops gene therapy treatments that use zinc finger DNA-binding proteins(ZPFs). They are currently developing treatments for several conditions and working with the big three pharma companies. The main reason that I have so many biotech stocks is due to the fact that the Baby Boomers are starting to retire and are going to need medical treatments and have the money to spend on their own healthcare. Sangamo is currently working on treatments for diabetic neuropathy, cardiovascular disease, brain cancer, and HIV. The HIV treatment is currently getting all of the attention because it could make the cells of the immune system permanently resistant to infection by the HIV virus. This is also why I believe that Sangamo is a good buyout canidate for one of the big pharma companies. Even if Sangamo doesn't get bought out it still has the potential to become the first big-paying gene therapy company.