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Biotech / Medical : Biotech Valuation
CRSP 58.17+3.9%Dec 4 3:59 PM EST
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To: Ian@SI who wrote (6304)5/10/2002 2:06:48 AM
From: Czechsinthemail  Read Replies (1) of 52153
 
Ian,

I think some of the rotation into and out of biotechs has to do with people trying to time the economic cycle. Biotech and pharmaceuticals are seen as relatively more attractive when the economy is declining, but relatively less attractive as the economy begins to pick up steam. Another facet of this is the ability to attract capital. When biotech stocks are up they are able to get much more capital much more easily. And nobody loves you when you're down and out.

Whether the forecasts or the timing are on target or not is another matter, but many seem to have been trying to play sector rotation. There is also the high beta of biotechs. They tend to exaggerate their moves both to the upside and to the downside.

I definitely agree that there are some good values, but if they continue lower they get to be better values. I think some of the patience required is buying and then waiting and some of it consists of waiting before buying.

Baird
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