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Why "Buy-and-Hold" Is for Suckers

Written by Jason Stutman
Posted November 16, 2019

Do yourself a favor and take a look at the chart below. It just might change the way you think about making money in the stock market entirely:

tlt-webinar-biopath

Pictured here is the three-month price history of a company by the name of Bio-Path Holdings, Inc. (NASDAQ: BPTH). As you can tell, the company exploded dramatically in value, seemingly out of nowhere, earlier this year.

Practically on a dime, shares climbed from $2.10 to as high as $38.86. At max profit, that means investors caught around a 1,750% gain off this little company, one that most people have never even heard of, in just a few days’ time.

For perspective, it would take you over 45 straight years of compounding 10% returns to get that kind of payout.

For further context, consider that J.P. Morgan Asset Management’s current capital return assumption for U.S. equities over the next 10–15 years is just 5.25% (annual). Morningstar pegs the number much lower at 1.8%, given a 10-year time horizon. 

I don’t know about you, but that sounds pretty underwhelming to me...

Unfortunate as it is to say, at a time when buy-and-hold has become the mantra of modern-day money managers, the expected rate of stock market returns is ironically dropping across the board. What used to be an expected return of up to 10% a year is now in the mid-to-low single digits.

This, of course, raises the question of what exactly is going on. Scion Management’s Michael Burry, along with others, thinks we’re looking at an ETF bubble.

Burry is best known for sounding the alarm on the subprime mortgage crisis leading up to 2008. They made a movie about him called The Big Short. Maybe you’ve seen it.

Burry could provide a long, complicated explanation about what’s going on, but I have to admit, I’m less concerned with why this is happening right now than the simple fact that it is happening. 

More importantly, I’m concerned with how we, as investors, can respond.

After all, should you really be keeping all your hard-earned capital in a boring, virtually stagnant ETF (or one with potential downside), when 1,750% returns are happening right under your nose? 

Probably not...

So if you’ve been left unsatisfied with Wall Street’s lukewarm returns, then you’ll want to pay attention...

Because the age of buy and hold is dying, and the age of the active trader is now upon us.

So what was it that caused Bio-Path’s stock to explode 1,750% in just a few days’ time?

The answer might surprise you...

Even better, it could help you leave buy and hold in the dust and see that kind of action on a regular basis...

You see, Bio-Path’s stock exploded not because of breakout earnings or a surprise buyout that no one could have accurately predicted...

The stock took off because Bio-Path had released data for a promising new cancer treatment.

On its own, that may seem like a one-off story, but in context, it’s part of a much broader trend.

You see, in 2018, we saw a record number of new drugs green-lit by U.S. regulators, with 61 novel drugs and biologics approved. This is not a matter of coincidence but rather the current state of development in biotechnology.

Thanks in part to recent advances in AI and big data, knowledge and expertise within biotechnology is exploding, and as a result we’re witnessing levels of medical advancement unrivaled by any other point in human history.

Add this all together, and the takeaway is this: Investors are looking at an unprecedented opportunity to profit off disruptive biotechnology developments for gains as high as 1,750% (in a matter of days), while the rest of the market settles for ETFs that return pennies on the dollar.

From cancer to heart disease, medicine is truly on the precipice of a new age, and investors now stand to make a killing off these incredibly valuable new treatments.

If that sounds at all like an enticing opportunity to you, then I urge you to register for our free biotech-trading webinar, scheduled for November 21.

In this webinar I will clue you in on everything you need to know to be able to succeed trading biotech stocks. 

If that sounds intimidating, believe me when I say it isn’t. You don’t have to be a doctor or a scientist to do this. You just need the right system and the right expert to guide you.

Frankly, it’s as easy as clicking a few buttons a couple times a week... and easily the most exciting trading system I have ever come across in my years of investing.

You can register for the event by clicking here. You’ll simply need to enter your preferred email contact in the linked page.

Until next time,

  JS Sig

Jason Stutman

follow basic @JasonStutman on Twitter

Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and Topline Trader. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.

Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.

Outside the office Jason is a lover of science fiction and the outdoors. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.

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