Two weeks ago, I told my Breakthrough Technology Alert readers that there were reports that our SC companies were under short attack. As you know, a short attack involves the coordinated selling of large blocks of stock. This creates a huge, rapid downward price plunge, intended to panic investors into selling. The point of a short attack is that the attackers get to buy back their own stock, and more, at artificially deflated prices.
They do so, of course, because they expect the stocks to return to or surpass their previous prices.
Stem cell companies are a logical target for such a strategy: The sector remains relatively small compared with other medical industries, and they are known for volatility. A really well strategized short attack would even include some sort of insider information that would send the company or sector careening back up quickly so the attackers could take a huge quick profit.
So it didn't surprise me that on Dec. 2, the day after I warned readers about the short attack rumors, SC stocks shot up again. The National Institutes of Health approved 13 more embryonic stem cell lines for use by organizations that accept federal research funds and announced many more lines would be approved soon. As usual, such an announcement had a widespread and completely illogical impact on SC company prices.
Even companies working on adult SC therapies rode the news up. StemCells Inc. (NASDAQ: STEM) increased by more that 30%. This, obviously, makes no sense, because STEM works only with adult stem cells and sells nothing in the market of NIH-funded researchers. (At least several of my BTA holdings are in the business of selling SC research products.)
I can't know for sure, incidentally, if there was any real connection between the huge dip in prices before the NIH announcement that drove them back up. I probably never will. The take-home lesson, however, is to look at the science, instead of market fluctuations. If the science is valid and the demand for the product is legitimate, you should buy transformational stocks and forget about them. These stocks, by definition, yield such extraordinary gains that you can afford to sit on them for years before they pay off.
So let's review the market potential and the science of regenerative medicine once again. The market potential is, in my opinion, unmatched. Regenerative medicine is completely unlike even other transformational medical technologies for one simple reason. Most medical technologies cure or treat the causes of premature death. Regenerative medicine, however, is unique in that it can actually turn the clock back, extending maximum healthy life spans.
So how are they doing? I am completely enthused by the progress that the stocks I've already endorsed are making. One company continues to solve the riddle of how stem cells develop into their many end forms. Another's breakthrough, which allows it to use unfertilizable eggs to create its bank of cell types immune-matched to 95% of the population, is an incredible advance. Few understand these points now, but word will get out.
Speaking of which, I've learned from sources that National Geographic is working on a documentary about the immortalizing enzyme, telomerase. This is good news not only for the stocks that control telomerase IP. It's good for the entire regenerative medicine industry. Word is that the producer working on the show is smart enough to understand the science involved. Here's hoping.