BIOTECHS THIS WINTER MAY BE LIKE OPTICS LAST WINTER
your post responding to my earlier post states in part...
"Fiber optic companies, unlike most internet and some biotechs, are profitable NOW, growing revenues at wildly high rates, and there is no slowdown for several years to come -- at least. Instead of looking for the next meltdown, I think investors should be more concerned with finding the next high growth business."
Problem is valuation... and whether its priced for perfection. OPTICS more than any sector has been priced for perfection. GLW and other companies bid up into the billions a number of optic companies before acquiring. The sector is littered with billion plus caps, formerly trading for a fraction of that, some just startups, often without working products. Longer term ok, and surely not like internet junk.
I believe the bargains in Optics were really last years story... and Gilder (to his credit) called it correctly at that time. As Gilder is effectively valuation agnostic, his subcribers often don't make these adjustments.
If any sector has been hyped in recent months by the media such as CNBC, Fortune, Wall Street Journal - it has been OPTICs. That is precisely why I pointed out to FOOL that OPTICs was probably more suitable for their bubble burst theory.
If Biotech ever gets priced at the levels of Optics - Celera would trade at 500 plus and so forth. We just need some of that optic mania for biotechs. Now that would be nice. |
