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

To: tom pope who wrote (9924)	1/5/2004 9:12:29 PM
From: the hube	Read Replies (1) \| Respond to of 52153

Gold has rallied and oil has been stuck at $30 only if your currency is the US Dollar. In Euros, both gold and oil are cheaper than a year ago, gold by a little and oil by a lot.

To: tom pope who wrote (9924)	1/5/2004 10:01:26 PM
From: Biomaven	Read Replies (2) \| Respond to of 52153

The catalyst for a real roiling will be evidence that central banks are no longer prepared to leave the $'s they have to buy from their country's exporters in U.S. Treasuries. But with the dollar 25% cheaper than it used to be, it seems like a good part of the dollar move must already have happened - why should they jump now? And where exactly would they jump to? Neither Europe nor Japan look particularly attractive. There's a decent argument that the dollar needed to come down some, and the fact that it has done so without any panic is very good news. One bull case for US equities is that everything else is equally unattractive. Short-term instruments are a disaster from a yield viewpoint, government bonds are looking shaky and the spread on junk bonds has narrowed considerably. Of course that leads one to look at "hard" assets, but with inflation near a record low and the money supply falling I'm not convinced there either. Not to mention any terrorist incidents lurking in our future. I have to believe it is only a matter of time before another event. That argues for keeping some out-of-the money puts on hand as insurance. So all this argues for a portfolio along these lines: 1. Long biotech - good news should continue irrespective of the economy. 2. Perhaps long some tech - business spending is picking up. 3. Long some ex-mideast energy stocks. 4. Some miscellaneous hard asset plays. 5. Some high-yielding stocks - utilities and the like. 6. Some foreign bonds and equities. 7. Short some retail/home building etc. 8. A bunch of out-of-the-money puts on the overall market as insurance against Bad Things. Biotechs didn't participate much in the rally today. Let's hope they get themselves together ahead of the JPM (H&Q)conference next week. Peter