When and how is our economy going to improve?

Would the economy have to improve before stocks start going up?

• Right now there is no good news - unemployment is sky high, you know the rest. Wouldn't it take a complete overhaul (i.e. total ruin of the economy, as we know it) for things to get any better? Would we all have to start from scratch in order to see any improvement? What are the bigwigs doing that should give us any confidence that things will improve in the near future?

• Answer:

  Some stocks are going up right now in spite of the economy. Of course, the economy affects every sector to some degree. I invest into the biotechnology sector. In this sector, the economy affects the stock price to a lesser extent in some cases but not all. For example: Stem cell company stocks are going up since Obama has gotten elected. As of today, they will start going higher because Obama reversed Bush's legislation preventing Federal funding for stem cell research. Also, Obama promises to plow money into stem cell research. So, look for a stem cell company. I have invested into Stem Cell Innovations Incorporated, SCLL on the over the counter board. A few years ago, the stock price was about $.60/share and has dropped to as low as $0.002/share. It has been trading for about $0.01 lately and will likely go back up to $0.60 if they can get the technology licensed to a major pharmaceuutical company. Recently, the company has filed a new patent and has some really good liver cell technology available to produce some inportant proteins such as blood clotting factors which currently net several billion dollars in the market for Factor VII, Factor VIII, and Factor IX. They also have some technology to do high throughput screening for drug toxicity that every pharmaceutical company could use. So, the company has a lot of high potential but there is a high risk that it will go belly up if they run out of money. I invested about $50,000 into another pharmaceutical startup company called Panacos. I have 80,000 shares. The company had a drug called beviramat that would have driven the stock price through the ceiling if it had reached phase 3 trials. However, the company ran out of money and sold the drug to Miriad Genetics for peanuts to pay it's bills and the stock price has fallen to $0.01/share and my shares are worth $800. So, the risk you take can pay off big but you can lose too. Panacos may eventually come back if they can license their remaining technology but the best strategy is to have a handful of companies to spread your money over to diversify your investment. Right now though, stem cell companies have the momentum going in their favor. There are several companies to choose from beside SCLL. However, this company is likely to go up significantly. Check out their web site and see what you think.