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

To: LLCF who wrote (160)	4/13/1999 9:32:00 AM
From: scaram(o)uche	Respond to of 52153

Two hedge funds quoted in the article. Nice balance, compared to recent stuff..... particularly love the inclusion of little-mentioned GLIA. ;-) However, I'd need to go back and review changes to management at Amerindo. Is this a manager that brought "you" one of biotech's all-time largest collapses due to forced (margin call) selling? Take a look at Amerindo performance, 1996-1998. Again, don't know if the individual cited in the article was responsible.

To: LLCF who wrote (160)	4/13/1999 10:06:00 AM
From: Biomaven	Read Replies (1) \| Respond to of 52153

I guess what is going on here is that the street is (consciously or not) using a valuation model that awards a high multiple to earnings but uses a very high discount rate until such time they are sure the sales are for real. This has the effect of flattening out the valuation curve until the very end, where it grows very steeply. This argues that the best returns will come in the aforementioned "sweet spot", although the PGNS debacle has certainly hurt this approach. BTW, the article came from the WSJ online edition (subscription required) - I don't think it ever actually appeared in the paper edition. Peter