Investment Board Lessons
Reading Pharma investment boards are a real lesson in human nature. Here are some general observations:
-Many investors do not want to hear facts or honest opinions that differ than than own. As a reference point, I am attaching two posts that I placed on the AOL Motley Fool VVUS Board on 10/19/97 and 3/7/98 (see below).
-Some investors automatically attack the honesty and motives of anyone who has a different opinion than their own
-Many investors will never recognize that they ever made an investment mistake and blame their Pharma losses on one or more of the following: "shorts", "big money", market makers", the FDA and unethical competitors.
-Many investors will ride a stock down , double-down, ride the stock down more, double-down again, ride the stock down...and never sell even as the stock approaches zero. The basic anti-Newton theory is "what goes down must go up".
-Some posters believe that their words of wisdom actually have an impact on the price of the stock. I believe if I have never written a single post, the price of PFE today would be 116.
-Many posters prefer to attack the personalities of others rather than sharing their opinions or facts. I simply do not read the ramblings of people that I do not respect...."Just click on by".
Investment boards should be used to have pfun and share information and opinions. Unfortunately, many others disagree and ruin it for others. As a case in point, watch carefully the negative responses to this post.
Have PFun!
BigKNY3
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Subject: Re: BigK the Preacher...
Date: 3/7/98 7:56 PM Eastern Standard Time
From: BigKNY3
Message-id: <19980308005601.TAA19414@ladder03.news.aol.com>
Zgol: Thanks for the review. I enjoyed it. I welcome everyone to read all my unedited posts on the PFEr Board and other Big Pharma Boards.
In a direct answer to your question, I do not hold a short position in VVUS. In fact, I have never shorted a stock in my life. I sure you can not possibly believe this, but it is the truth.By the way, JLABIF is a well-known short seller of blue chip stocks including PFE. We usually manage to have a friendly discussion on the PFEr Board without accusations of dishonesty and mistrust.
In December, 1997, I opened a long position in VVUS @ 10. When my profit goals were reached in late January, I took the profits and ran. No need to get greedy in a changing ED market.
Why post on this board? Why not? I don't believe these boards are restricted to shareholders or even ex-shareholders. But, investor boards are for sharing of information and , in some cases, correcting misleading information. or noting a 7% change in an intraday price means absolutely nothing when a stock is near 10.
Moreover, I challenge you to find any misinformation that I have placed on this Board ....including one of my first VVUS posts placed when VVUS @29 7/8) (see below). At that time several VVUSers attacked me for giving my opinion.
But, if most VVUSers on this Board feel like you, I will be more than happy to share my 25 years of investing in pharmaceutical companies with other Boards and totally ignore VVUS. Comments and opinions are welcomed!
Zgol, it amazes me that someone like yourself only wishes to hear good news and accuses everyone else with a different opinion as being a dreaded "short". Do you really think any of these posts actually effect stock prices?
Good investing!
BigKNY3
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Date: Sun, Oct 19, 1997 10:50 EDT
From: BigKNY3
Message-id:
sharikwa <<what you think of Vivus?VVUS @29 7/8>>
I do not have have a long position in VVUS or expect to have a position in the future. It does not fit the profile of companies that I like to own (too risky and volatile). I have also never shorted a stock or plan to!
Although I do not have extensive knowledge about VVUS, here are some general observations:
1. VVUS is currently a one-product company in a significant active therapeutic area. The ED market will dramatically change and grow during the next two years.
2. As a relatively brand new company, VVUS management is bound to make some big mistakes concerning forecasting, production, marketing and dealing with the FDA. These mistakes could have a significant adverse impact on VVUS.
3. Major VVUS posters have absolutely no knowledge of the pharmaceutical industry or pharmaceutical marketing and are relying on their price trend charts to determine the future of MUSE and VVUS. A big mistake!! Even worse, some posters spread misinformation about competition to suit their current positions. In the end, facts, experience, and patient preference (not misinformation) will win out in the marketplace.
4. VVUS seems to be a magnet for momentum investors. Just check out the Silicon Investor VIVUS Board for further evidence. As a result, short-term 20%-50% swings (up and down) can be expected. If you hit the timing right, there is an opportunity to make money. But, you also need to know when to get out. This is not a buy and hold stock!
5. Oral medications should be introduced in the ED market in 1998. Their impact on MUSE is unknown. Moreover, news about the oral drugs will probably have an adverse effect on VVUS. VVUS is down 15% since the announcement of Viagra's NDA submission on September 29th even with a one day spurt on 9/30/97..
VVUS management is putting on a happy face about an expanding market. But, in reality, nobody knows what will happen until the oral products are available. Regardless, this is a major factor for VVUS that brings significant additional risk ...and possible opportunity.
Best of luck to all VVUS investors,
BigKNY3
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