BARS is December 1-4.
In theory I agree with the notion that biotechnology might be a safe haven from the internatioal volatility. I even made postings to that effect in the recent past.
But so far, it hasn't happened. Let's take October 10 as an arbitrary starting point for the most dramatic part of the international currency tumult. From October 10 through yesterday, EMF (Templeton Emerging Markets closed end fund) is down 23%. JEQ (Japan Equity Fund) is down 14% and FBIOX (Fidelity's Biotech mutual fund) is down 9%. The DJIA is down 3%, S&P 500 is down 1% and DEPO is up 1%.
So, FBIOX, with virtually no foreign exposure, has underperformed the Dow Jones Industrial Average and the S&P 500 even though the latter two have foreign exposure. So, the big money has avoided the relative illiquidity of biotechnlogy. The morning after the 550 point drop my father bought WAG. Walgreens has good management, is liquid, and has minimal foreign exposure. It has gone up 24% since then, and rose 21% from October 10 through yesterday. (My father does have 12,000 shares of DEPO, so he is not a bad person--but he is retired and doesn't like to do too much risky biotech investing).
So, instead of hoping for more international instability, I have taken to hoping that things settle down overseas. It looks like DEPO would benefit more from a December small cap/biotech rally than from more interntional currency trouble.
Best Regards,
Tom D |
