Healthcare: The Sector You Must Be Invested in for the Next 10 Years

by Marc Lichtenfeld, Investment U Senior Analyst
Wednesday, January 4, 2011: Issue #1679

Wes Harris of Charlotte is going to have a heart attack in February. His blocked artery isn’t going to wait to see if Greece or Italy will default on its debt.

John Davidson of Oklahoma City is going into the hospital for a knee replacement next week. The surgery will happen no matter if the S&P is up, down, or sideways.

And Carly Nelson who lives in a suburb of St. Louis needs a mastectomy after breast cancer was discovered. She will likely start chemo several weeks later. Whether unemployment climbs back over nine percent will have no bearing on her decision about treatment.

These procedures and others save lives and improve quality of life. Millions of operations, tests and other healthcare services will happen regardless of world events, economic, political, or otherwise.

When people are sick, they’ll do anything in their power to get better. And it doesn’t matter one iota what else is happening on the planet.

It’s one of the reasons I love the healthcare sector.

Starting this year until 2030, 10,000 Baby Boomers will turn 65 every single day. And you don’t need a doctorate in demographics to know that older people consume more healthcare as they age.

That’s why $4 trillion is expected to flood into healthcare over the next eight years.

Super Bowl of Healthcare

While football players are gearing up for the playoffs, hoping to make it to the big game, I know that I’m already going. But the Super Bowl I’m talking about is in San Francisco, not Indianapolis, and it takes place a month earlier.

On Saturday I fly to California for the J.P. Morgan Healthcare Conference. It’s the most important and exclusive healthcare conference of the year. Typically, you need to manage millions of dollars to get a ticket to sit in on presentations and meet the CEOs of some of the largest and most innovative healthcare companies.

This is my sixth consecutive year attending the conference and it always generates a ton of new ideas.

Presentations are expected from the likes of Pfizer (NYSE: PFE), Celgene (Nasdaq: CELG) and AstraZeneca (NYSE: AZN), as well as some smaller companies like Incyte (Nasdaq: INCY), Illumina (Nasdaq: ILMN) and NuVasive (Nasdaq: NUVA).

I’m looking forward to hearing about the macro picture and how all of these companies plan on capitalizing on the millions of new patients and trillions of new dollars that are on the cusp of entering the system.

As a result, I’m particularly interested in diagnostics and genetic sequencing. We’re already at the point where doctors know that specific cancers will or won’t react to certain treatments based on genetic mutations. But we’re in the very early stages of this type of science. Within the next 10 years, by reading our genetic code, doctors will be able to understand so much more about what keeps us healthy and what makes us sick.

And in order to gather that information, medical professionals will need tools – machines, consumables, tests – in order to gather and interpret all of that data.

I expect diagnostics and medical technology to be huge winners not only in 2012, but over the next decade or so. The Oxford Club’s Investment Director Alexander Green has been bullish on medical technology for a while now, discussing it at length in The Oxford Club Communique’s 2012 Forecast Issue.

Interestingly, on New Year’s Eve, I had dinner with a health insurance executive, a surgeon and a computer programmer. For half of the evening, we talked about the changes technology is bringing to healthcare. It further confirmed what Alex and I have been saying for a while now. This sector is going to be huge.

Packed Calendar

The pace of the week is hectic. I’ll at the conference every morning by 7:15 AM. Right now, the only holes in my schedule are Monday at 2:00 PM and Wednesday at 10:00 AM. Lunch and dinner are booked every day with fund managers and analysts.

Along with sitting in on presentations and breakout sessions, I have one-on-one meetings set up with several management teams, including the one from a tiny company with mind-blowing technology that’s on the verge of changing how new drugs are discovered.

I’ll report back to you next week in this column with some of my observations.

Meanwhile, if you’re as jazzed as I am about the prospects for the healthcare sector, let me know. When you provide your email address, you’ll be the first to hear about my new healthcare investing service, FirstLine Investor Alert, which is launching in the next week or two. And you’ll receive a special discount that’s only available to those who sign up on this hot list. You’ll be under absolutely no obligation. You’ll simply be notified first and save a significant amount if you do decide to try the service.

The healthcare sector is on the launch pad. The conference I’m attending always gives me some great ideas and new contacts to help my readers navigate the field to find the best profit opportunities.

With all of that money cascading into the healthcare sector over the next decade, medical stocks are going to take off with or without you. I hope it will be with you. And it’s taking place no matter what happens in Europe or the election.

I’ll talk to you next week.

Good Investing,

Marc Lichtenfeld