Re: What Moves the Mutts?
Obviously investors pour hundreds of millions of dollars into biotechs...ENMD went up $70 per share, after a six month old announcement about them cutting off the blood supply to tumors in rats, was re-released.
Prithee tell, what was ENMD's close today? How many hundreds of millions of dollars were poured... er, invested in the stock at double its current price? If one was early and lucky... or a nimble trader (which, we have been told, can never be confused with investing)... one may be ahead. For many punters in ENMD, enthusiasm and Buffetology have returned no more than an expensive tax shelter.
Also, if it was well known that clinical stage biotechs never did well, no one would ever buy the stocks and we would never see a biotech rally, and they would never be able to issue an IPO, because no one would ever buy it.
Red Herrings and Straw Dogs! First, it's not that development biotechs "never do well," it's just that, as a universe of stocks, they have a poor risk-reward profile.
Second, you can find people to "invest" hundreds of millions of dollars in anything no matter what the history or facts are. If we have learned nothing else from being on S.I., surely we have absorbed this lesson.
I think that you are right about the Market saying, "Show me the money", but I've played clinical stage biotechs for several years, and have done well, without the biotechs having a drug on the market.
Sincere congratulations. You have outperformed the vast majority of biotech investors (including most of the participants on this thread, enthusiast or skeptic). I will still submit -- to this point, without contradiction -- that investing in either Pharma Gigante or post-approval biotech companies provides a superior risk/reward profile to investing in development-stage firms. Moreover, either strategy is decisively superior to overweighting in a single biotech and cheering for dear life.
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