Hi MJ,
I guess I didn't see the last question about increased stock prices.
I consider STEM highly speculative. I have traded it several times with very good results. But if you trade STEM, you better have enough huevos to stomach some rather unnerving drawdowns.
I've never lost money on STEM, but once I was 30% underwater for a while. That's not something I do very often at all, I am a big believer in stops. There are a precious few things I trade that I don't place stops on, but STEM is one.
I got interested in STEM after having some dealings with the company professionally. I know the field, what they are doing, where the field is going, and so forth. But that's not really why I got involved in STEM.
I have noticed over the years that the fast-buck and mo-mo crowds will glom onto exotic-sounding technologies that nobody really understands, but that seem cutting edge. They don't have to be important technologies in terms of market size. The reason for the glomming on is that these kinds of things can be easily and successfully overhyped.
I think this tradition might have come into full force about the time BRCM and QCOM first hit the streets some years back. That's about when I started becoming aware of it anyway. QCOM in particular got me to thinking about these things. I owned that when it was briefly trading over $1000/share, and I just knew it was overinflated..... but it just amazed me how it kept going up and up and up.
Some of the more notable successors to that tradition include genomics (or any company with some hint of "gene" in the name or symbol), the dot.bombs of course, the digital power subsector, and nano-anything. In each case, we saw technology that was not understood, had a small market with a future market that was unclear but attractive, and sounded exotic and like "the next big thing." So it was an obvious pump target.
I consider STEM (and a few others) to be the "heir apparent" to this tradition. The "heir apparent" to stem cell companies is just taking some practice swings in the on-deck circle now, I believe, but that's another story that is still developing.
Keep in mind this will be temporary. Stem cell research is a long way from the bedside, and during this period of development, EVERYTHING sounds far better than it turns out to be.
But one thing that is greatly helping STEM is the increasing amounts of money being thrown at stem cell research. Frankly, I can't see how this will translate into exponential growth for STEM, but that doesn't really matter to me much because I am not a long-term investor in STEM.
It is very clear to me that there are many, many fundamental questions that have not been addressed. Progress will be rapid, but still, we only know some of the downside. You can be sure there will be more.
As I said, I am not a long-term investor in STEM. At this point, I can't see any huge market developing that STEM (or any other similar company) will reign over. I see little or no evidence that a company like STEM will ever become anything like, say, a CSCO. To me, it is a short-term speculative series of trades, and will be extremely volatile. And when the NEW "next best thing" that nobody understands but sounds exotic and cutting-edge comes along, the mo-mo crowd will desert STEM like rats from a sinking ship. A look at the longer term (2 or 3 years) nano stock charts is helpful here, for a recent example.
Hope this helps
T |
