Healthcare Robotics and the Timely Lesson of My First Big Investing Mistake

One of the new buzz phrases to come out of the coronavirus scare is “social distancing.”

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It’s a fancy way of saying, “If we don’t get too close to each other, we hope the virus won’t spread as much.”

Social distancing is moving to new levels in the U.S. as the number of cases increases and with the World Health Organization officially labeling the coronavirus a pandemic. That sparked another round of selling as the stock market retested its lows — which is to be expected.

We’re hearing about more measures to keep our distance, from companies encouraging their employees to work from home to jurisdictions discouraging or even outright banning large gatherings.

Late Wednesday afternoon, the NCAA announced that it would hold its March Madness basketball tournament games “with only essential staff and limited family attendance.” Santa Clara County in California banned gatherings of more than 1,000 people for the rest of the month, so the San Jose Sharks hockey team is trying to figure out what to do for its scheduled home games. The Golden State Warriors announced that they will play the Brooklyn Nets tomorrow in San Francisco with no fans in attendance.

Conferences and conventions are being postponed or rescheduled, and some schools and universities are resorting to remote learning temporarily.

We’re used to remote working and learning, but how about remote surgeries? It’s a growing healthcare trend, and it could really prove its worth in times like these. In fact, the first stock I ever bought for my clients was a robotic surgery company, and it holds a very important lesson for times like these.

The coronavirus may have changed the market — temporarily — but it has not changed the convergence of tech-driven innovations set to create a decade of hypergrowth and massive stock market gains. That’s what investors should be focusing on.

I wrote Tuesday about some technological advancements proving very valuable amid the outbreak. Robots take patients’ temperatures, deliver supplies, and clean and disinfect the facilities. Smart helmets measure body temperature from 15 feet away. (You can read the article here.)

I’ve had my eye on healthcare robotics for some time now, and it is one area set to boom in the 2020s. We will see many more remote surgeries made possible by robotics. Surgeons anywhere in the world will be able to operate on a patient anywhere else in the world. If I blow out my knee reliving my college football days, I’ll be able to pick from orthopedic surgeons around the world rather than just my local area.

That’s possible thanks to the precision in robotics and the revolutionary speed and accuracy of data transmission enabled by 5G.

Believe it or not, robotic-assisted surgery goes back 35 years now. The first one took place in 1985, and then things really took off after the FDA approved the da Vinci system in 2000. It was developed by Intuitive Surgical (NASDAQ:ISRG) and has continued to evolve over the last two decades. The company estimates there are more than 5,500 systems in 67 countries around the world … and that a doctor starts a da Vinci surgery every 26 seconds.

When I launched my investment firm Penn Financial Group in 2004, ISRG was one of the first stocks I bought for my clients. At the time, it was one of the first robotics companies and valued at about $700 million. Today, it is worth nearly $60 billion.

Intuitive Surgical is arguably the most important stock I ever bought. I’ve had much bigger gainers … but it taught me a very important lesson.

After I bought ISRG around $15, it rallied up to $20 (pre-split) in a few short works. The position was quickly up over 30%. On an annualized basis, I was looking at a big triple-digit gain.

So what did I do? Even though I believed the company was in its infancy stages, I felt the quick 30% was too much to risk losing. I decided to bank the profit and make my clients happy.

And yes, they were very happy … at the time.

Over the years, Intuitive Surgical became the global surgical robotics leader. Adjusted for a stock split in 2017, the stock increased from the $5 entry in 2004 to a high of $619 just recently on February 19. That is a 117X return. Every $5,000 invested in Intuitive Surgical in 2004 would have been worth $619,000. Every $10,000 would have been worth over $1.2 million.

I sold too soon. Fortunes are made holding great companies for the long term.

But here’s the other lesson for right now: There were pullbacks along the way. Steep pullbacks. Investors who bailed missed out on huge profits.

From March 2008 to March 2009, Intuitive Surgical fell from nearly $120 to under $30 — a 75% drop!

From April 2010 to November 2010, the stock dropped from $130 to $83 — a 36% fall.

The stock took a 37.5% plunge from February 2013 to the following December.

Even now, ISRG is nearly 18% off its all-time high from just a little over three weeks ago.

I could cite more, but you get the picture.

Big pullbacks create amazing buying opportunities if you think long term. I don’t know when the market will hit bottom, and I don’t know what the bottom will be. But I do know that a lot of good stocks are suddenly undervalued and cheap.

5G will continue to roll out. Electric vehicles will keep taking market share. Artificial intelligence software will evolve. Breakthrough medicines will be discovered. Cryptocurrencies are set to move higher no matter what happens with stocks. Cannabis legalization will continue to spread. And so on.

If you think long term, the last thing you want to do is sell good companies. And if you have cash to invest, you may want to think about putting it to work. If not immediately, then soon.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2020/03/healthcare-robotics-isrg-timely-lesson-first-big-investing-mistake/.

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