Healthcare Portfolio Update -January 2021

  • COVID vaccine roll-out critical to economy.
  • Momentum investing decouples stocks from fundamentals.
  • Will healthcare sector outperform during a sell-off?

woman in white shirt standing in front of computer

After a significant sell-off on Friday 1/29 we need to be focused on healthcare and biopharma stocks which show individual  weakness particularly United Health. UNH and large cap biopharmas like GSK, MRK, and RHHBY. But the overall trend in biotech stocks remains strong bolstered by COVID vaccines and diagnostics. Our top new buy/adds in 2021 have been two diagnostics stocks ABT and HOLX both we have covered in past posts. The life science tools and diagnostics sector has been strong over the past six months and if you held large cap Illuimina (ILMN) and ThermoFisher (TMO) over the long term since we first  covered them in 2016 you would have easily beat the market. Indeed the trend we picked up early and re-iterated at the 2019 AACC Meeting was Molecular Diagnostics and Sequencing including PacBio in 2020 which became a momentum stock . Pacific Bio (PACB) sold off on Friday so we have to wait for a new entry point. Two other big wins from 2016 were QDEL and NSTG along with a few other companies that were acquired.

Focus on trading COVID vaccine stocks primarily BNTX and MRNA. Use options. We regret not holding them long term from earlier last May in our coronavirus portfolio. Added BNTX last week and missed the rocket 65% move in Novavax (NVAX) to the $220 handle on their UK  efficacy data and pathway to US approval.


MOMENTUM Trading vs LONG Term Investing

We have written about momentum trading in the past and this is a good week to remind you about volatility. How can you hold on to a long term winner like Illumina with all the monthly vol?  You see the froth of the past week and your portfolio discipline gets derailed . You are making money on trades but if it is short term taxable and the big money comes from long term gains.

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Disclosure: None.

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