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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: JOEBT1 who wrote (908)	4/4/2000 3:42:00 PM
From: Biomaven	Read Replies (1) \| Respond to of 52153

Well, apparently we weren't quite yet "there." However, note that the pharma were actually sharply up today, and the events of the last few weeks have gone a long way to correcting the relative valuations of pharma and biotech. In some sense, the Nasdaq:NYSE dichotomy (new stocks vs. old) is also the biotech vs. pharma comparison. Interesting that in this case, the biotechs were actually a leading indicator. (The biotech canary died before the tech canary). However, things are not quite the same as pre-crash. First, and perhaps most significant, the biotechs that moved quickly gobbled up a whole bunch of cash while the going was good. (About $5 billion worth of IPO's and follow-on offerings in the first quarter). On the down-side, we have a whole lot of unhappy investors in these follow-ons, with the MEDX and CRA investors the unhappiest, as they hit the very peak). Trying to take a longer term view here, the basis of the biotech bull market is still intact. Lots of successful biotech products will emerge in the next few years; the iron grip of the pharmas has been loosened some; there's lots more capital in the sector and the excitement from the genome project will doubtless re-emerge once we get a few publicized practical discoveries. Look for MLNM to be the key here. My advice: 1. Don't panic (unless of course you are over-extended, in which case of course you should have panicked before everyone else.) 2. Look for bargains in the more solid companies - companies like SEPR and MLNM. 3. If you're smart and brave, you can make a killing intra-day when a stock totally collapses and then recovers. I don't have the guts for this, but Rick did this very successfully today. 4. Other than day-trades, realize that this is not necessarily the end of the carnage, and realize further that you might have to hold stocks you buy today for a year or more. In general, quality will recover before junk. 5. Tomorrow may be critical as the margin calls from the last few days come in. Peter