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

To: tom pope who wrote (954)	4/15/2000 9:53:00 PM
From: Harold Engstrom	Respond to of 52153

Tom, I agree with Rick that "If one buys good stocks that are undervalued, one will win." This is pretty basic. You buy a company like PCYC or BTRN that has lots of cash, a promising pipeline with late-stage elements, and wait until other people figure it out. Or you buy a company like SEPR with lots of cash and an immense pipeline and wait for it to mature and revenues to build. I guess the question is really timing. If a company is on sale at 50% off today, will it be marked down to 70% off sometime next week? I don't know. But, if I think a company will be worth 500 in 4 years, do I care if I get it for 40 or for 30 today? Personally, I don't. The whole issue is timing. I'm not smarter than the smartest people out there: the reason I like biopharm - lots of time to figure out what's out there and make considered purchases and sales. So, time is on my side. If you make a well-thought-out bet, all you have to do is wait. Look at the VD Model Portfolio. V1 has made some bets over the past 3 years and sat on many of them for some time before they showed signs of fulfillment. Some have been carried for forever and continue to be. Time is on V1's side: you make an educated decision (allowing yourself to reconsider that decision) and just wait until either it is vindicated or something changes the fundemental basis for your optimism. Recommend taking your own advice before giving it to a friend! : )

To: tom pope who wrote (954)	4/15/2000 10:17:00 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 52153

Here is a rear view mirror look at something that may also be useful -- option sentiment. Momentum players bet against biotech By Stephanie O'Brien, CBS MarketWatch Last Update: 12:07 PM ET Feb 1, 2000 NEW YORK (CBS.MW) -- While biotechnology stocks have caught the public's fancy lately, some investors who follow the momentum of investor sentiment are betting that the sector's rally will soon end. The Amex Biotechnology Index rose 47 percent between December 21 and January 21. Genomics stocks have been particularly hot, with names such as Human Genome Sciences (HGSI), Celera (CRA), Affymetrix (AFFX). Millennium Pharmaceuticals (MLNM) and CuraGen(CRGN) among others. Others such as Amgen (AMGN),Biogen (BGEN), Chiron (CHIR) and Genzyme (GENZ) have also risen sharply in recent months. Some investors are wagering that the trend is about to shift, according to Joe Sunderman, director of research and development at Optionsource.com. Optionsource measures investor sentiment by looking at options activity. "Options players are betting that these stocks are going to go down," Sunderman said Friday. Sunderman tracks the open interest, or the number of options contracts outstanding. Investors buy put options, contracts that guarantee the right to sell a specified number of shares by a certain date, when they believe a stock will go down. An increased amount of activity typically signals bearishness. "There is a high amount of puts relative to calls," Sunderman says."(Momentum players) are looking for a downside move. They think the biotech rally has been overextended." Sunderman looks at options activity to determine sentiment. "We would tend to think the rally is short-lived," Sunderman says. Volume in pharmaceutical stocks was also notable, although those options trades pointed toward a bullish trend, Sunderman said. Last Friday, for example, while the broader market declined, see Market Snapshot and Bond Report, Merck (MRK), Johnson & Johnson (JNJ) and Bristol-Myers Squibb (BMY) all had options call volume that was atypical, Sunderman said. "Call volume was overwhelmingly stronger than put volume," he said. "At face value that would suggest options players are bullish on pharmaceuticals stocks," Sunderman said. So how does Optionsource see that trend? "We take the contrarian view," Sunderman says. "A herd mentality will move things swiftly in either direction." Nonetheless, he cautions, "Many options players, looking to make a quick buck, are often wrong."

To: tom pope who wrote (954)	4/15/2000 11:36:00 PM
From: Mike McFarland	Read Replies (1) \| Respond to of 52153

<buy and hold...trading accounts> Wow, do I feel a whole lot better now... I'd become convinced that I was not able to capture anything by trading--I found no benefit to churning my account through March. However...two weeks into April somehow, my churned account is 100k ahead of an old snapshot, unmanaged since early February. So, as bad as things have gone of late, I've actually mitigated the effects of this crash. Of course I'd love to say I was smart enough to have missed the crash, no such luck, but I also think it is true that over long periods of time you only have to do marginally better than the market to come out way ahead. Having got into biotech at approximately the end of a long bear market in the sector, and, having captured a little better performance for myself these past couple weeks had I done nothing, I think I have no further adjustments to make. And next week is going to be a market for only the most skillful traders, I'm not part of that club, so I will sit out. There are a few things that I'd be tempted to write a check for...but I'm sticking to keeping the mad money seperate from everything else. Mike's Microcap Madness of last year has actually evolved into a pretty decent portfolio-- I know the bioexperts here on SI would make a few changes immediately if it were theirs, but I'm okay for now. That said...I think it is going to be weeks if not months before the sector warms up--and I wouldn't be surprised if I didn't pass the old high water mark of a month ago for a couple of years. The best way to get back, is probably not to change strategies mid stream... I'd bail and buy back lower if I was sure the sector was going lower--but I'm trying to think of where my companies will be in 3-5 years, and I'm more confident of that than where the shares will be priced 3-5 days from now.