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Biotech / Medical : Biotechnology Value Fund, L.P.
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To: scaram(o)uche who wrote (1429)2/21/2000 8:00:00 PM
From: samRead Replies (1) of 4974
 
"it's the most out-of-whack stocks in the sector that traditionally determine when the sector as a whole comes back."

Traditionally, yes. But the "market" is not what it was even two years ago. The question for me, therefore, is this: Is this (1) just another once-a-decade biotech spike? Or (2) does it signal a fundamental change in how the street views the sector? Obviously, its too early to tell. But if it is (2) then I suggest we may see something akin to what has occurred in the tech sector (or more realistically the internet sector). And that is a constant rotation from one subgroup to another every couple weeks or so. Big moves followed by large, painful and swift corrections. Followed, in turn, by "buy the dip" rallies. One subsector getting whacked as another gets bought. Ultimately, whether its (1) or (2) will depend on whether funds decide to begin to buy the dips. And this will depend on market and sector sentiment. It will also depend on the fortitude of the shortsellers seeping into the highflyers now. Do they cover after a 30% drop? Or do they hold out for "single digits." Is this biotech rally for real? Or is biotech just the flavor of the month? Who knows? I certainly don't. Indeed, as a long-suffering biotech investor, I have my doubts. And I'll probably sell out of my holdings. But that's probably reason enough for this rally to be for real. ;)
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