There are also few industries whose fates are as directly linked to Uncle Sam. Healthcare, biotech, and medical stocks live and die by Federal health budgets, and with Obamas official health plan released to the public not so long ago, millions of investors are wondering just how the plan will affect shares of their favorite companies.

In the penny stock realm, it gets even more interesting

In President Obamas budget, he outlined three areas where public dollars will be used to fuel sales at private companies: the implementation of health IT, medical research, and Medicare spending.
Health IT was a hot topic during the election, and it continues to draw Federal dollars now that Obamas in office. We will make sure that every doctors office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year, said the President.

Hes following up on that by providing $19 billion in tax dollars to help hospitals go digital.

And in kind, companies that provide electronic medical record technologies (most of whom are small-caps) are seeing increased interest from investors. Two small-cap stocks that have benefited from that interest include Quality Systems (NASDAQ: QSII), up 33% in the last month, and Patriot Scientific (PTSC.OB), up 20% in the last three weeks.

Medical research is another area where small-cap stocks are seeing a resurgence of interest. There are scores of pharmaceutical penny stocks that are researching and developing the latest drug treatments for everything that ails us, and theyre poised to tap into the $1.1 billion in government funding for researching medical treatment effectiveness.

Over at Penny Stock Fortunes, subscribers are seeing the effects of that money first hand. Today, they had the chance to unload shares of Dendreon (NASDAQ: DNDN) for 255% gains.

While DNDN may have been one of the bigger gainers, a number of other tiny pharmaceuticals have been up double digits this year as well.

Medicare is the final place where Uncle Sams health dollars could trickle down to your portfolio. You see, most private healthcare and health insurance companies bill Medicare for services provided to patients it covers. Included in the mix are a number of small-cap names WellCare (NYSE: WCG) and Amerigroup (NYSE: AGP), for example.

When the government commits to expand Medicare funding, it means big things for these Medicare contractors. Not only do they have the chance to increase volume by admitting more government-sponsored patients, but they become ripe targets for acquisitions by larger health insurers like UnitedHealth Group (NYSE: UNH).

Want to make money on healthcare stocks? Invest your money where the governments spending theirs, and your chances of profiting from penny stocks are unquestionably higher.

About the Author:
Jonas Elmerraji is the editor of the Rhino Stock Report and a contributor to The Penny Sleuth, which offers unbiased commentary from expert analysts and authors on hot penny stocks.

• the direction of the economy
• the priorities of consumers
• the policies of governments (local / state / nation wide / international)
• peoples’ habits, beliefs, and activities
• the presidential office and the senate

That’s just to name a few. The ways in which the rules can and will change is vast and complex, and while you can sometimes predict trends, most of the shifts will catch us by surprise.

Sometimes, a trend takes decades (think changing from oil to solar). Sometimes it happens in an instant (think 9/11 and the instantaneously resulting military, political, financial, and consumer activity implications).

Now, if you go against a trend with your penny stock investments, it’s like swimming upstream. On the other hand, if you spot a trend early enough and react to it, you’re setting yourself up to benefit.

You wouldn’t want to buy into a fur coat company when it became politically incorrect to wear fur. The company’s customers, and therefore their revenues, would be dwindling down, and soon the penny stock shares may be as dead as the minks they skin. There would also be implications on all aspects of the fur industry, from the hunters all the way down to the advertising companies that had some furriers as big clients.

On the other hand, perhaps a drop in purchases of fur started resulting in an increase in purchases of leather coats, or expensive jewelry, or fine cars. People often bought fur coats because they were very expensive, and thus served as status symbols. Those same people, when they gave up on fur, would look to other forms of status symbols. Perhaps its a type of car, perhaps its a type of jewelry, or maybe it’s even a different kind of coat. If you can predict the result of the shifting trend, then there will usually be opportunities for you as a penny stock investor.

The are four primary trends which can impact your investment analysis, and the types of penny stock companies you may be investing in. They are:

• social
• political
• industrial
• consumer

In addition to these, there are many secondary trends which could be important, and should be considered by penny stock traders. Some of these include, but are not limited to:

• military (focus, spending, deployment regions)
• investor activity
• religious beliefs
• medical (treatments)
• medical (patient knowledge)
• technology adoption

A few trends of note in recent history include increased use of seatbelts, improving racial tolerance, the invention and widespread use of the internet, technology to combat crime (for example Lowjack to react to car theft), and so on. There are literally thousands of trends taking shape or underway right now, all around you. If you pay special attention to look for such shifts in society, you may spot a trend or two, and from that may position yourself to profit.

About the Author:

Get to know Peter Leeds, and read some recent articles by Peter Leeds.