I want to expand on this post......
exchange2000.com
The intent of the old T/FIF thread was to defeat arrogance based on dogma. It is now a given..... nobody who takes a public stance with respect to biotech, and who hasn't had his or her head in the sand for the past year, will ignore the power of SI to confront dogma.
Dogma is a tool that "the street" uses to avoid hard work and difficult calls, based on insightful research, while still allowing for profit. Unfortunately, it trims the potential gain for those who are not lazy...... dogma is a tool of those who would slight the rationale of others to gain an undeserved advantage.
In the old days of biotech investing, there was ONLY ONE strategy....... pick a basket of highly leveraged business plans where the science is undervalued, and avoid situations where management wants to grow the company by selling stock (avoid inevitable dilution).
In the past eight years, a new generation of investor has arrived in biotech. They say things like "you should only invest in biotechs that are profitable". Fortunately, this sort of rationale is supportive of the "Engstrom" portfolio (BGEN), which I have the highest respect for. However, if the portfolio manager of the Engstrom portfolio had ever used that dogma to slight my style, I'd not have the high respect for him that I do.
Is my point clear? The majority of new investors in the sector had been blinded by poison bullshit, otherwise known as dogma.
It was clear, very clear, that good science in the lower tiers was discounted to absurdity. That was also the founding thesis for the BVF thread.
So, what happened? We've returned to a search for companies that fit into a pre-1991 biotech basket. That's why most of the SIBI story could move slowly -- or hit major roadblocks -- and the investor could still walk with a nice profit.
To invest successfully in this sector, one can (1) pick companies that will have accelerating sales and pile in at an appropriate point, or (2) put together the classical basket. I've never tried option one, as I've never seen the need to abandon old techniques that work.
To all of those who stuck in out through a tough '98, congrats on your huge '99s. |
