<<The main point to remember is that stocks are driven in the short term by perception, not "reality." >>
Precisely Peter. And the 'perception' from October through March was driven by the idea that Genomics will produce vast fortunes. And it was this rising tide that lifted all biotech boats, whether Genomics companies are perceived to be funny money or not. 'Unpleasant, but that seems to [have been] the reality'
Was/is the genomics bubble bad? Well, we had a story line that (for once) appears to have captivated the investing public. Many of these investors clearly did NOT know what they were investing in....but they did drive share prices significantly higher.
So we can all pooh-pooh the fact that we are being lumped as dotcom-like story stocks but the only way to attract significant investing momentum is to create the sort of 'wow' aura that is strikingly similar to the atmosphere associated with internet stocks. Most biotechs do NOT have sound fundamentals based on revenue generating products.
The fact is, for the investing masses, there is indeed a great deal of similarity between the vast majority of biotechs and the vast majority of dotcomers.
I think we're being a bit disingenuous in believing biotech is perceived incorrectly. Serious biotechs investors are aware of the substance underlying biotechs' value. The masses do not know this and might even claim, and may not be altogether incorrect, that significant substance underlies many of the dotcomers as well.
IMO...
At some point, investor's perceptions will shift from negative to positive and biotech will boom again. 'Reality' is best left out of the equation, since it is often as subjective as perceptions. In fact, does not one 'perceive' reality. 'Reality' does not exist without a helluva a lot of interpretation. |
