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

To: tnsaf who wrote (4146)	6/16/2001 11:54:01 PM
From: Biomaven	Read Replies (1) \| Respond to of 52153

Thanks, Jason - that's a pretty instructive comparison. Of course, based on fundamentals, there is no earthly reason why VRTS and HGSI should be remotely related. Clearly this is a market inefficiency, but it's hard to take advantage of. One try is to buy HGSI when it goes down because of the linkage and sell it when it goes up because of the same linkage. However, in the short term there's no real reason to assume the linkage is going to go away quickly, so this strategy is not real promising. From a long-term perspective of course, a decline in HGSI (and similar biotech stocks) because of this linkage means a buying opportunity. Clearly in the long-term (say 5 years or more) the linkage will disappear, as HGSI will ultimately trade largely on its merits as a drug developer. Certainly as I look back on my investment decisions over the last 18 months, my biggest mistake was underestimating how tightly linked the biotechs were going to be to the rest of the high tech and internut stocks. Peter