The cyber-crimes business seems to be very profitable. The recent bank attacks taking more than $300 Million from banks all over the world really helps to frame how big the issue is. Defending against this, called cybersecurity, seems to be profitable too.
I am not a biotech specialist but I understand higher highs and higher lows. The diversity within the biotechnology scientist dominated field is immense. Without studying the individual components of this industry, we can study the ETF to understand what is going on. Here is a link to Biotech iShares (IBB). We can see it seems to be a top performer almost all the time. One quick look at the SCTR at the top shows that this is a very consistent out performer, ranking in the top 10% of all ETF's. Again, I am not a biotech specialist, but I understand higher highs.
How does this relate to cybersecurity? As I mentioned earlier, one of the benefits of an ETF is it allows you to invest in a wide variety of companies with one tool. Recently a new ETF was started for cybersecurity called HACK. Without studying the components of the ETF, which you can study here if you are so inclined, you are able to invest in the fast moving industry without trying to figure out who the winners are. In the last few days, this ETF has now moved to be in the top 11% of all ETF's based on the SCTR. Success begets success, with institutional investors looking to add to what is working and selling what is not working. Top performing ETF's are a good clue to strong industry groups.
Look at the huge volume in the last few days, which coincides with President Obama's Cybersecurity summit and FireEye announcing eye popping earnings.
With the volume shooting up above 1 million shares/day, this looks like it is starting to run. You'll have to look for your entrance that you like, but the fact that it is starting to become a top performing industry group should put it on a growth investors watch list.
Greg Schnell, CMT.