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TFN eNews 09/15/2009: Which bit of news was worth 40% gains?

Published via e-mail broadcast on September 15, 2009

In today’s TFN eNews:

* 40% on this neural stem cell stock

* Secrets of Whack-a-Mole investing

* The recovery: Legends of the Fall

Dear TFN Reader,

Small but breakthrough biotech drug maker Neuralstem, Inc. (AMEX:CUR) surged over 18% at times today. I watched this Hot Stock Confidential open position climb up to a gain of 39.4% over our logged entry price before I decided to do something about it.

These gains were powered by the belated response to a press release yesterday: According to the company, Neuralstem has “received notice of allowance from the United States Patent and Trademark Office (US PTO) for its patent entitled ‘Transplantation of Human Neural Cells For Treatment Of Neurodegenerative Conditions’, number 11/281,640.”

Neuralstem has developed technology to produce neural stem cells of the human brain and spinal cord in commercial quantities, “and the ability to control the differentiation of these cells into mature, physiologically relevant human neurons and glia.”

Yes, I originally recommended the stock with the outlook “at levels under $1.15, for gains of up to 50%”.

Sure, the term “stem cell stock” has lost a bit of its magic. (Despite politicians posturing, just re-establishing Federal funding for embryonic stem cell research hasn’t cured cancer yet. Go figure!)

In the long run, this technology has headline appeal—even if its drug falls flat in actual trials. I think we could net up to 50% gains by the time they announce FDA trials. Maybe even more.

But this is a small biotech… and as such likely to float in the wind. I’d rather bag 39% now and buy the stock back later and cheaper! (TFN’s Laura Cadden does this thing all the time… she has turned stocks like Micromet, Curis or Cerus into veritable ATMs for our premium-service members! Maybe her luck — make that skill! — rubs off on me…)

*** Neuralstem is a prime example for our Hot Stock Confidential investing strategy: We look for “damn good stocks” — companies with strong products, strong management, strong stories! — and take a cautious position in them.

In this volatile market, we expect stocks to fluctuate. We’re willing to ride out adversity — to a point. We’ve compared this approach to playing Whack-a-Mole at your local carnival: You never know exactly when and where the little buggers will pop up… but as soon as they do, we’re there to either take instant profits (like on CUR). Or try and squeeze a hardy, hefty gain out of them via strategic stop losses.

We’ve done this kind of thing plenty of times this year: CUR is the 58th double-digit gainer we took for our members. And there’s a whole warren of other gainers waiting to be harvested! Our 58 winners and 12 losers so far have eked out an average gain of 22.2% on each and every closed position, with an average holding period of just 50 days.

(That’s calendar days, not trading days.)

Many of our colleagues boast with their “compound gains” — adding up every gain and loss under the assumption that you invested the same amount of capital over and over again. Since we have a bunch of picks cooking at any given time , I only include our “compound gains” for the sake of comparison: 1,555.7% so far in 2009!

*** Federal Reserve Chairman Ben S. Bernanke said today that the worst U.S. recession since the 1930s has “probably” ended.

White House and Congress are preening how their spending of borrowed trillions has rescued America.

I just don’t buy it.

There’s a slight difference between an apple you’re about to eat while enjoying the sunset from your luxury penthouse. And one that has stopped falling because it hit the asphalt 48 stories below. No matter how many politicians claim the descent has been halted, and that the apple’s nutritional value has been scattered over a much larger surface in a green, organic, renewable sort of way — its functional value as part of your menu has been destroyed.

Economists use the euphemism of “no-V-shaped recovery” these days and focus on increased household savings. But increased saving are an indicator of lack of trust. A V-shaped bounce back would imply a bounce-back to the full employment, growing net worth, and economic boom of the Bush years.

But this is neither probable nor at all realistic.

In a global economy, you don’t grow GDP by increasing the cost of labor. A recovery is not in the political self-interest of the current Administration: Cementing power in Congress now depends on creating as large a constituency of voters dependent on government hand-outs as new debt can buy.

Be prepared for a decade of painful sideways movements during which the wealth of America will be ground up by lack of growth, redistribution, and the emigration of talent and ambition.

***On June 18, in Guanzhou, China, U.S. government officials literally gave away a $330 billion-a-year industry to the Chinese…

Clearing the way for 3 tiny stocks to make out like bandits! Early investors could realize gains of 1,042%, 602%, and 1,705%… but you must act now! Read on…

Quote of the Day:

“The most childish of all the things being said in the august setting of a joint session of Congress last week was that millions of people can be added to the government’s health insurance plan without increasing the federal deficit at all. If the President of the United States could do that, it is hard to imagine what he would do as an encore. Walking on water would be an anticlimax.”

– Thomas Sowell, Creators.com

Recommended Reading:

40% gains on Neuralstem, Inc. (CUR): How do we do it?

The Top Swine Flu Vaccine Stocks under $20

The 3 Best Chinese Stocks Under $5!

Today’s Top 3 Financial News Stories:

telegraph.co.uk – US credit shrinks at Great Depression rate prompting fears of double-dip recession “Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an ‘epic’ 9pc annual pace, the M2 money supply shrank at 12.2pc and M1 shrank at 6.5pc. ‘For the first time in the post-WW2 [Second World War] era, we have deflation in credit, wages and rents and, from our lens, this is a toxic brew,’ he said. It is unclear why the US Federal Reserve has allowed this to occur.”

TheMoscowTimes.ru — Industrial Output Falls 3% in August “Russia’s industrial output declined by 3 percent in August against July, reversing the growth of the previous two months and indicating that recovery is still a distant prospect, according to figures released Tuesday by the Federal Statistics Service.”

Bloomberg.com — Roach Says U.S. Economy Is Vulnerable to Relapse “‘The economy is growing very close to what people refer to as a stall speed,’ Roach, chairman of Morgan Stanley Asia, said in a Bloomberg Television interview today. ‘It lacks a cushion should there be something unexpected. When those shocks come, you don’t have the cushion and you’re vulnerable, you could have a relapse. Any recovery from a relapse will also be anemic. This is not the environment for a V-shaped recovery.’”

Cordially yours,

J. Christoph Amberger

Executive Publisher, TodaysFinancialNews.com


Next Article: Cabela’s Inc. (CAB) put options pay off big!

Posted by J. Christoph Amberger · Filed Under TFN eNews 

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