Teeka Tiwari teasers wash up on the shores of Gumshoe island every few months, though we don’t cover them all that often because he hasn’t done a lot of teasing of individual stock ideas (he has more frequently, if memory serves, pitched his trading “systems”). It looks like Tiwari’s Mega Trends is now being published by Common Sense Publishing, one of the newer arms of the Agora octopus, so perhaps we’ll see more of his teases in the months to come.
This one caught the eye as one of several active promotion campaigns about Ebola-related stocks. No one is surprised that any stock with any kind of hint of a connection to curing or treating the dreaded Ebola virus is being chatted up by investors these days, that happens every time a deadly outbreak or, worse, a real pandemic, hits the public health radar (and the front page of the newspaper).
As Tiwari’s ad indicates, these perennial seasons of panic put wings — often very temporarily — under the share price of well-marketed biotech stocks with a connection to the panic, whether it’s Avian Flu or Swine Flu or SARS or the anthrax bioterror attacks. And yes, if you time these well and get lucky and the headlines continue to drive investors in your stock’s direction, you can certainly see a quick profit… though on the flip side, as you can probably imagine, you can also see the panic subside quickly and the associated stocks drop like a stone.
Tiwari implies that his study of those several past panics gives some predictive power to what will happen to the Ebola stocks (all of which have already risen and fallen sharply several times during this latest outbreak), but that strikes me as a dangerous assumption — a dozen stocks across three or four different outbreak-type events in the past 10 years provides just one tiny little sliver of data even if the fact that you see the charts spiking up repeatedly in the presentation to give you great confidence. Assigning any real predictive power to those past charts seems a bit foolhardy to me — this is not technical analysis, which does work on some level to put the odds slightly in your favor, technical analysis depends on well-studied long-term patterns. This is event-driven investing that a copywriter can imply is predictable through the use of visually compelling charts, but we all know — or should — that every event can easily be different than the last.
Which doesn’t mean that the Ebola stocks mightn’t go on another run, or double or quadruple from here. I have no idea. I can just issue that small note of caution, and go on to check out the clues and let you know which ones Tiwari is pitching. So let’s get to it.
Here’s a bit from the ad:
“If just one infected individual gets on a plane, we’re looking at an epidemic that could spread like wildfire through the communities of suburban America.
“The U.S. and Canadian governments have already funnelled more than $5.5 billion into treating and containing this killer.
“That’s not a ton of money to a big pharma giant like Pfizer. But it’s a fortune to the tiny companies actively racing to deliver a treatment to the hands of the government.
“But the fact is, the stocks we’ve found won’t rise or fall based on dollars changing hands…
“There’s a much more powerful catalyst that should drive these stocks to new levels…
“It’s a simple ‘trigger’… And once you know how to recognize it, proactive investors can make a small fortune.”
You can review his whole ad here if you want the details, and his assessments of those past “waves” of outbreak stocks. But That “trigger” seems to be, broadly, the wave of news-driven panic about outbreaks — and it’s getting triggered pretty frequently from what I can tell… including the further spread of the outbreak in West Africa reported just today. I’d argue that it’s pretty irresponsible to say that an epidemic would spread like wildfire through suburban America if one Ebola sufferer got on a plane, since the virus is not airborne and seems to be well contained in places that have