Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: Clappy who wrote (30378)	8/24/2000 8:12:24 PM
From: Clappy	Respond to of 35685

Have any of the Biotechs in your portfolio? Today I bought CRA once again. I haven't held them since the crash in March. Anyhow, I took a small position in them once again. I also daytraded STEM this morning for a point and a half. It doesn't sound like much but it was a cheap stock rising because of the latest stem cell research news. The Biotech index is sitting close to some upward resistance. If it breaks through, it could really rally. Chart: stockcharts.com[L,A]DACLYYMY[DC][PB50!B200!D!B20][VC60][ILF!LI14,3!LG!LA12,26,9!UH14,3!LK14] -ClappyTheDiversifiedTwit P.S. Here's an article about biotech. Thursday August 24, 11:10 am Eastern Time Funds: Big profits and risk in biotech funds By Clint Willis BOSTON, Aug 24 (Reuters) - Shares of biotechnology firms, beaten down last spring, are once again gaining ground -- and some experts say that now is a good time to invest in the sector. Biotechnology companies use natural processes to develop drugs. As a group, their shares shot out the lights in 1999, gaining 113.5 percent -- 29.2 percentage points more than the Nasdaq Composite index's return. Biotech stumbled last spring, falling 40.4 percent during March due to concerns over potential new government regulations. Such fears faded, and the Biotech index is up 54.9 percent since late May. Should you invest? Certainly, the sector holds tremendous promise. More biotech drugs are working their way to the market than ever before. And a biotech firm called Celera Genomics (NYSE:CRA - news) has mapped the human genome: the blueprint for all human DNA. This achievement will allow future scientists and companies to identify genes that led to specific maladies and eventually develop treatments and cures for countless diseases. It's an accomplishment that some industry analysts equate with Neil Armstrong's first step on the moon. ``Biotechnology firms are at the forefront of medical discovery and have the potential to change the way we treat disease,'' says Emily Hall, who covers the sector for Morningstar, Inc. ``Combine that with the ageing baby boomers and you're looking at enormous growth potential.'' That said, there's the not-so-small matter of risk. Most biotech firms are young, with limited operating histories and untested business models, and many are unprofitable. What's more, getting FDA approval for a drug is far from a sure thing. The process involves years of development and several phases of drug trials-and if the FDA rejects the drug, a biotech company can be severely hurt. Biotech -- along with the health care sector as a whole -- also is heavily influenced by governmental policy, which can send shares bouncing one way or another. Example: Last spring's biotech sell-off occurred when President Clinton and British Prime Minister Tony Blair indicated that the government might limit companies' abilities to sell gene data and develop products. Clinton later retreated from his comments -- but such episodes do occur from time to time. Such factors make biotech one of the stock market's most volatile sectors. Consider that biotechnology stocks soared 250 percent in 1991 before losing 12 percent annually on average during the next seven years. The good news: Biotech has changed greatly during those years. In fact, the industry's prospects have never looked better. The number of drugs approved has increased from six in 1995 to 70 in 1999 and should reach more than 90 this year. Meanwhile, more biotech firms are making money: The number of profitable biotech companies has jumped from three a decade ago to 14 now, and analysts say that that figure should hit 40 by the end of 2001. ``The industry has grown up,'' says Hall. That means risk-tolerant investors may find it a good time to invest in the sector -- albeit cautiously. There are a few ways to gain access to biotech through funds. The most conservative approach is to invest in a diversified health care fund that holds a significant portion of its assets in biotech. Such a fund allows you to share in the growth of biotech while providing a potential cushion in case the sector heads south. One example: Eaton Vance Worldwide Health Sciences (800-225-6265; $1,000 minimum investment; 5.3 percent load) invests 50 percent of its assets in biotech and the other half in shares of pharmaceutical firms. The fund holds both domestic and foreign companies and looks for smaller-cap stocks. That strategy has placed the fund among the top performing health care funds during the past 5 and 10 years, according to Morningstar, Inc. Another choice is Invesco Health Sciences (800-525-8085; $1,000 minimum; no load), which has recently held 36 percent in biotech along with shares of Merck and other big pharmaceutical firms. More aggressive investors might want to consider a pure biotechnology fund. One of the oldest such funds is Fidelity Select Biotechnology (800-544-8888; $2,500 minimum; 3 percent load), which invests primarily in large, well-established biotech companies like Amgen and Genentech. It's posted a 131 percent better return than its typical peer during the past 5 years. Or there's Dresdner RCM Biotechnology (800-726-7240; $5,000 minimum; no load). Manager Faraz Naqvi employs an extremely aggressive strategy, focusing on very early-stage biotech firms. This strategy has led to significant volatility -- but also has resulted in a 194.4 percent return during the past year. Remember that investing in biotech takes a strong stomach. You'll need a long-term approach to ride out the sector's ups and downs. And as with any sector fund, make biotech a relatively small portion of your portfolio -- probably no more than 5 percent to 10 percent of your total equity investments.