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Biotech / Medical : VD's Model Portfolio & Discussion Thread

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To: Dan O. who wrote (4664)	4/19/1998 8:58:00 PM
From: Peter Singleton	Read Replies (2) of 9719

Dan, RB, Thanks for the clinic on the warrants. Very helpful. I'm a novice with warrants and options, so bear with me. Someone (V1?) pointed out the downside with the warrants as increasing beta, a point you guys have also made. In your bullish stance, aren't you assuming you want to maintain your long position in LGND (or LGNDW), and not seriously considering a case where the fundamentals of the company will change anytime soon to the point where you want to sell? I can't foresee a case at this point where I'd want to sell my long position in LGND ... I agree with Henry their pipeline is the best in the business. But this is biotech, and I've been bitten on my "sure things" before. So, like buying on margin, wouldn't a prudent investor weigh the downside as well as the upside in the leverage associated with the warrant position? Once again, I'd be embarrassed to tell you the number of times I've added to a position, including using leverage, later to sell with my tail between my legs when my perception of the fundamentals changed. Peter

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