Larry,
I agree that there is a big risk of selling too soon. Been there and done that! Many times >(.
Up to the last 6-9 months, most bio investors had a long dry spell while the general market, especially tech stocks, bounded ahead. There is a natural tendency to want to lock up gains now that bios seem to have caught up with the market. Stated another way, after being out in the desert so long, drinking that cool cup of capital gains is almost irresistible.
Your points about scarcity and market cap comparisons are excellent. Add to that pipeline starved pharmas in need of munching in 2000, the growing maturity of many bios and their development programs, etc. To me, barriers to entry are an enormous advantage to successful biotechs as compared to internet companies. Anyone with money can start a .com and competition is akin to a free-for-all. But drug development takes great skill, a long time and is protected (usually) by patents and trade secrets for a substantial period of time. Maybe bios will get rewarded more appropriately as compared to the .coms.
IMO, we are at the beginning of a long cycle...3-5 years...of bio-boom. Certainly there will be declines, sometimes bone-jarring, but the stage seems to be set for a broad advance in drugs from biotechs and, consequently, stock price.
Best regards,
Walter |
