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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: rkrw who wrote (9313)	7/3/2002 4:17:25 PM
From: Harold Engstrom	Respond to of 9719

The blowoff is waaay overdone. Sepracor (as far as we know) did no tricks with their accounting. And their pipeline and revenues justify a much higher price in my opinion. If $140 was overdone, then $8.50 is overdone at the other extreme. This is probably true of most of the stocks in the portfolio. If the portfolio does not reflect what V1's favorites are, then start another portfoio! If it does, then let's keep it and show everyone, real and imagined, some great future returns with the current allocation.

To: rkrw who wrote (9313)	8/15/2002 8:14:15 AM
From: scott_jiminez	Read Replies (3) \| Respond to of 9719

<<Give it a rest already! The VD portfolio is a for fun paper biotech portfolio. It's not real money. It's called a mock portfolio! If anyone has a swelled ego, it's the fictitious Scott "told you so" Jiminez.>> Sorry about the slight (!) delay in responding but there is a point worth making here. You make some valid points about my ego and integrity. But it's only half the story in the context of this thread. How about some honesty and integrity regarding what has happened to the portfolio? Perhaps it would be instructive to act as if REAL investors did indeed treat this as very REAL guidelines towards very REAL investing. Regarding 'giving it a rest already', how about RM/Vector/Cytokine 'giving it a rest' as well: -rather than invariably reacting to precipitous declines in individual equities as [sic] sinister market forces, evil market makers, 'when it rains, it pours', etc. how about admitting up front and directly that while they MAY have been astute (see below) in buying promising biotech stocks they have been absolutely abysmal in selling them. My experience is that the science/art of investing is divided approximately 25% effort into buying and 75% into selling. -while I'm criticized for, in effect, noting the 'king(s)' have no clothes, I've yet to read one post by the portfolio 'managers' about the egregious errors of judgement and the fundamental flaws of investing philosophy that has wiped out all but ~5-7% of the portfolio. Yes this is a 'fun paper biotech portfolio' - however, all of us will learn infinitely more from RM and Cytokine coming forward and discussing what went wrong...rather than assuming that these two remain brilliant stock pickers (and the behavior of the market is somehow 'wrong'). And, to be concise, I am NOT asking the 'managers' to discuss why Sepracor or any of the stocks imploded. I am asking them to discuss the reasons they held on to these stocks for so long. The 'managers' had huge profits 2 years ago. Why didn't they take the profits and stash them for a rainy day? Why did they remain on margin for month after month after month, even long after a theoretical margin call was made, in the midst of a seriously deteriorating BT sector? What were they thinking? Wasn't it painfully apparent that the 'managers' would soon be forced to sell at the worst possible time? [And why have the managers, while being forced to sell off most of the portfolio, kept SEPR...one of the worst performing of ALL the BTs...and a company where the bad news just keeps on coming (the chief scientific officer resigned about month ago)?] The discussion ALWAYS centers around how investors were duped, or company executives were jerks, etc. How about a 'give it an airing' discussion of just how 'psychologically attached' the 'managers' had become to the stocks in their portfolio, how they couldn't admit that many of their choices 1. were wrong initially (because they trusted the recommendations of fellow SIers) or 2. that the premise of the story at the individual companies had changed, or, most likely, 3. the surge in the performance of the portfolio through ~mid-2000 was a rising-tide-lifts-all-boats phenomenon and that their stock picking ability may be no better than average. And their stock selling ability is much worse than average. Yeah, of course this is all 20/20 hindsight. Well, duh. But we've not read one conciliatory post from the 'managers' discussing how their behavior, their mindset, their attachment to these stocks led directly to the current state of affairs. Nor have we heard one peep from RM/Vector/Cytokine regarding how they will change their behavior in the future. THAT'S why I stated earlier that the performance of the portfolio is '...a personification of the swelled egos that have permeated this sector for so long.' And this remains true to this very moment. So while 'give it a rest' may well apply to the tone of my posts, how about (for once) a frank discussion of the psychological factors the created the disaster that is the VD model portfolio.