We haven’t heard from Dr. Mark Skousen for a while, so when a few folks asked me about his latest biotech pitch I decided to jump in… let’s see if the Thinkolator can get us some answers.
(Since we’re talking biotech, I should point out that he’s an economics PhD, not a medical doctor — and he doesn’t focus on biotech all that often in his teaser ads, in my experience.)
The first part of the pitch is all about how biotech in general will get a big boost from President Trump’s regulatory priorities…
“In the next few minutes, I’m going to show you how a relatively unknown piece of legislation – implemented by Donald Trump – could hand you a quick fortune.
“This legislation, like putting biotechs on steroids, is set to explode the value of several select stocks as much as 110-fold. And it does this for two reasons.
“First, it brings as much as $2.5 trillion pouring into the U.S. for investment.
“Second, it deregulates and allows dozens of biotechs to unleash their full profitability.”
That first part is about the expected “tax holiday” that might be part of the currently-being-debated tax reform bill, since pharmaceutical companies are the second biggest group (behind tech stocks) that holds lots of foreign profits overseas because they’re hoping not to pay US taxes on that money… bringing that money home with a tax holiday would make it perhaps easier and cheaper for those companies to do more research or, more likely, buy out more little biotech firms.
I’m a little skeptical of the size of that impact, since studies of past tax holidays have indicated that the overwhelming share of that cash goes to share buybacks, and big pharma… but it could help.
The second part is the regulatory shakeup that’s happening at the FDA, which Skousen thinks will result in faster approvals or other changes that benefit biotechs… here’s more on that:
“What you’re about to see is perhaps the easiest and most straightforward way to make a bundle on stocks.
“But the opportunity will be short-lived…
“Because, once Trump’s plan comes to light – and people see the amount of money flowing into biotechs – your chance will be long gone.
“I believe that anyone who delays getting in will have already missed at least half of the profit potential.”
Do keep in mind that these pundits (and their copywriters) are in the business of creating urgency. Every good ad from a newsletter includes a sharp reason to immediately subscribe, because those copywriters are fully aware both that most of us suffer from a severe case of FOMO (Fear Of Missing Out)… and that the longer you take to think over a purchase, the less likely you are to hand over your credit card.
Their job is making you think that we’re on the verge of missing out on the best investment idea EVER, and you have JUST A DAY OR TWO TO GET ON BOARD!!! And they’re good at that job, good enough to inspire lots of us little investors to act rashly even if we think we’re solemn and sober analysts who should damn well know better.
And the invented deadline Skousen is throwing out for us is, as luck would have it, today…
“After November 30, this could already be plastered on every newspaper and website across the country:
‘Biotechs deliver RECORD profits… Stocks up as much as 11,000%!’
“Once those gains are out the door, they won’t be available again… perhaps ever!
I saw you there, reaching for that credit card — wait!
Think like a lawyer for a minute… what might you have put into that sentence to make it sound like a promise without actually being a promise?
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Well, you’ve got the “After November 30” … not a specific timeframe, that’s like saying “in the future, someday.”
And you’ve got the “could already” — which is fully speculative. You’ve got the “perhaps.” Man, once you get enough qualifiers in there you realize he’s not actually saying much of anything.
I’m not picking on Skousen particularly — I use qualifiers all the time, too, because I don’t know what’s going to happen in the future… though I don’t use my qualifiers to write things that sound like almost-a-promise that buying my next favorite stock means you’ll be getting 11,000% gains. Mostly because I don’t want you to think I’m a skeezy idiot, and I have no vested interest in making you choose one stock over another — I just want you to think for yourself and get a good range of perspectives.
And yes, there is regulatory news from the FDA this week, too — FDA Commissioner Gottlieb talked to Congress today about his plans for implementing some Congressional priorities from last year’s 21st Century Cures Act, and his comments were mostly about how to provide more pathways for “accelerated approval,” which, of course, would be a boon for biotech companies trying to develop drugs. That “accelerated approval” goal has been in the works for a while, the bill was hung up in 2015 but then passed by the last Congress with broad bipartisan (and lobbyist) support, and signed by President Obama, in December of 2016. Perhaps this Commissioner will be more aggressive in pushing it than others would have been, I have no idea, but it’s not a new initiative.
And, just to clarify the fact that newsletter ad copywriters will turn anything into a “deadline