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Biotech / Medical : Biotech Valuation
CRSP 53.85-4.5%Jan 9 9:30 AM EST
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To: jayhawk969 who wrote (8677)6/16/2003 9:42:02 PM
From: Biomaven  Read Replies (3) of 52153
 
Thanks, JD.

One really needs a fund that invests in these. My guess is that spreads are real bad for small trades in a lot of these preferreds. Seems like a fund investing in borderline investment grade preferreds might manage a yield of something like 6.5% (just guessing here).

Interesting to compare with muni bonds - I live in a high tax state (MA), so state taxation factors in here as well.

I read somewhere that money market funds are in trouble because their expenses are in danger of exceeding their spread (the difference between what they can earn on money and what they pay investors). An interesting thought is what happens if short term rates drop further - do the money market funds operate at a loss? go out of business? Anybody know what has happened in Japan to such funds?

An interesting thought experiment is to put you in Japan say five years ago and let you invest (locally) in any asset class you chose. I'm not sure there is anything that would have done very well for you (including the dollar). If that is the case it would be a sobering thought - sometimes there just may not be good choices.

(Of course I'm being kind of contrary by saying this on a day when the market and the biotechs were up nicely).

Peter
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