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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (33638)	10/23/2000 8:00:43 PM
From: Thomas Mercer-Hursh	Respond to of 54805

Just to save you some time and potential arguments Which is not to say that, if you don't mind spending the time and enduring the arguments, that you aren't free to present your case, but having been warned, it would sure behoove you to delve into the thread's history first to see why the current conclusion is that biotech is outside the game. If you have a strong counter to those arguments or a possible exception, I for one would listen, but it would be a shame to waste time going over the same things again.

To: Uncle Frank who wrote (33638)	10/23/2000 8:40:59 PM
From: Judith Williams	Read Replies (2) \| Respond to of 54805

biotechs are not eligible for the Gorilla & King Index. They can't be detected by GG metrics and don't behave in a pongid manner even after they become successful. I follow the biotech sector closely and would like to second UF's comment. The one case that might, I thought, prove an exception was AFFX. Its gene chip seemed to have a lock on an exciting and expanding submarket. I considered it the INTC of the bio world. But then less expensive alternatives and patent-infringement suits hit and AFFX swooned. It is now off 40.5% YTD. That said, however, a basket of "shiny bio pebbles" lets one participate in a vibrant sector and at the same time mitigates the hit that is just around the corner for any one of these companies. Spurred by the discussion this weekend about when to add and when to cut back, I went over my bio portfolio. Because the basket is so volatile and subject to MOMO distortions to the upside and the downside, I had tended to trade in and out of the stocks in my basket when I thought they were getting even more extended. To my surprise, I discovered that my returns would have been about the same (just 2% lower in the aggregate), although Schwab would have been somewhat poorer, had I simply held. Although the stocks all tanked in March/April, they did not, on average, fall below the level reached at the beginning of the year. Year-to-date figures: ABGX 132%; MLNM 129.5%; MYGN 405%; VRTX 356%; IDPH 93.6%; HGSI 140%. Like Tekboy's options, this bio basket takes a lot of time (it will take up less in the future now that I see how little is gained) and tends to check my impulse to meddle with my G&Ks. The one occasion when I did was a mistake. I have added to SEBL this year, but NTAP was a relatively new addition. Because I had not followed it over its considerable ups and downs, my comfort level with NTAP was less than with the other Gs. I watched it go from 120 to the high 70s in short order and panicked. I sold a good portion in the 80s, only to buy back at 116--and that was a temporary gift.