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

To: nigel bates who wrote (9317)	10/21/2003 5:23:17 PM
From: Biomaven	Read Replies (1) \| Respond to of 52153

how many stocks you do own About 40-45, but value drops off fairly sharply as you go down the list, so a bunch of those are small positions. What can I say - I just can't resist a pretty stock. <g> The issue is one of risk/return. If you see two stocks with roughly equal prospects, you are better off buying both - your expected return is the same, but your volatility will be lower. Given that virtually any small biotech could halve on any single day, my view is that it makes sense to spread my portfolio around for stocks where one doesn't have very strong convictions. I tend to let winners run - CNCT is a good example. I bought a moderate amount about two years ago when the stock was around $5 and have just held, so now I have a respectable holding. Why didn't I buy more to begin with? I didn't know that much about them when I bought for the first time (I was mostly following a friend who held the stock) and I wasn't smart enough. <g> Looking back, here's what I found I wrote about CNCT to some friends in early 2002 with the stock in the high single digits: Trading at around 6.5x forecast '02 sales with some clear upside potential from Rogaine and Novartis anti-fungal licenses. Seems to me that it may be smart to hang out in these low-profile stocks while the "real" biotechs fail (and fall) around us... Guess I should have completely followed my own advice at the time. <g> Peter