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The Next Mega-Boom In China


The Dynamic Wealth Report
April 8, 2010

by Robert Morris, Editor

China has developed quite a reputation for setting off investment booms.  They’ve done it time and time again in a wide variety of asset classes.

Who can forget the boom in commodities from 2002 through mid-2008?  China’s insatiable demand for nearly every kind of commodity drove one of the biggest boom cycles in history.

And, what about the massive explosion in Chinese stocks from mid-2005 through October 2007.  In just two years time, the Shanghai Stock Exchange Composite Index soared more than six-fold in value.

The list goes on and on…

Savvy investors made fortunes from these boom (and bust) cycles.

Now, another mega-boom is setting up in China.

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This time around, China’s pharmaceutical industry is entering a multi-year boom phase.  According to research firm IMS Health, China is expected to become the world’s third largest prescription drug market in 2011.  And, this market is expected to double by 2013.

Three important trends are converging to drive rapid growth.

Trend 1:  Population

The first trend is aging of the Chinese population.  Over 160 million Chinese are 60 or older.  And, this segment is expected to increase to 300 million by 2020.  Simply put, older people spend more money on medications than younger people.

Trend 2:  Income

Another big trend is rising incomes.  China’s rapid economic growth is boosting incomes across all social classes.  As the standard of living improves, the Chinese are spending more on health care and medicines.

Trend 3:  Universal Health Care

The third trend could literally open the spending floodgates on pharmaceuticals.  I’m talking about China’s plan to provide health insurance to all 1.3 billion Chinese by 2011.  You can see how this trend is going to drive demand for medications into the stratosphere.

So, how do you make money from this amazing opportunity?

It just so happens there are a number of small-cap and penny-sized Chinese drug stocks trading on U.S. exchanges… and a number trading on other exchanges as well.

The best ones have certain characteristics in common.

Look for companies with large product portfolios, robust pipelines of drugs in development, and nationwide distribution networks.  Also, make sure they have strong research and development programs and access to capital.

These stocks will have you smiling all the way to the bank!

I’ve recently recommended a new hot stock to subscribers of my Penny Speculator (TPS) advisory service.  It’s perfectly positioned to cash in on the trends I described above.

I want to tell you all about it… but that wouldn’t be fair to my subscribers.  However, there’s still time to get on board.

Click here to join The Penny Speculator and get all the details on this exciting penny stock set to skyrocket any day now!

ETF Action 

Investors looking for small-cap sector exposure finally have a solution.  PowerShares just launched nine small-cap sector ETFs based on the S&P 600 SmallCap Index.  These ETFs provide an easy way for investors to invest in small-cap stocks within specific economic sectors.

Like their large-cap brethren—the popular SPDRs—these small-cap sector ETFs cover:  consumer discretionary (XLYS), consumer staples (XLPS), energy (XLES), financials (XLFS), health care (XLVS), industrials (XLIS), technology (XLKS), materials (XLBS), and utilities (XLUS).


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Issue Date:
 Thursday, April 8, 2010


Notable Highs and Lows

•  Standard Microsystems (SMSC) set a new 52-week high of $26.60.  The chip maker is soaring over 9% today after posting blowout earnings and strong guidance.  Their market cap is now $587 million.

•  UAL (UAUA) hit a new 52-week high of $20.79.  The airline is surging more than 9% on news of a potential merger with US Airways.  They have a market cap of $3.5 billion.

•  Mirant (MIR) set a new 52-week low of $10.16.  The electric utility’s shares have been falling steadily since early January.  They have a market cap of $1.5 billion.


Quote of the Day

"All life is an experiment.  The more experiments you make the better."

                  -
Ralph Waldo Emerson

 
Special Offer

China Stock Insider


TOP YTD Gainers

Company Gain
Somaxon Pharma (SOMX) 673%
Callon Petroleum (CPE) 360%
China Energy (CHGY) 345%
Wabash National (WNC) 327%
Geospatial Holdings (GSPH) 309%
*Year-to-Date, Mkt Cap > $100M


Worst YTD Losers


Company Loss
Medivation (MDVN) 71%
VisionChina Media (VISN) 57%
China Unistone (YTEC) 54%
Palm (PALM) 54%
XenoPort (XNPT) 52%
*Year-to-Date, Mkt Cap > $100M


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