As a group, biotech stocks are doing worse than oil stocks this year. The reason?
All presidential candidates are promising to bring forth the wrath of baby Jesus on the industry. For years, this industry has been innovating, enjoying a renaissance in revolutionary breakthroughs, partly thanks to being financed by highly priced drugs. There is a lot of push back against that now.
But more specific to the stock action, I think it’s simply a barometer of risk being shredded. After all, what is more risky than a phase 2 drug company trading with a market cap of $2 billion or more?
Today’s action is abysmal, indicative of the lack of demand for these risky assets now. It has the feel of forced liquidation, a hedge fund going bust. The underperformance v the SPY is very noteworthy.
Baker Bros is the most widely followed fund who specializes in life sciences. Year to date, they are getting poleaxed, possibly by as much as 30%.
Here are their top holdings.
Considering January isn’t even done, I’d call that a life changing event, one that would coerce any investor to consider pulling money out of the sandtrap.
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Dr. Fly – is there a trade in bios for a bounce?
Wow, my head is so far out of stocks now, I’m unsure.
I’d gravitate towards real bios with over 500 mill in sales.
not smart. why bother?
really? not very good trading sense if that’s where you wana go sniffing
woo hoo BIS + 6 1/2% for today anyway
Like Ebola, there will be a Zika scare (extra CNN disaster porn) and that should be good for a biotech pop (short-lived).
FB climbing toward 16% UP right now. Unbelievable. This is amazing. A tale of two markets. When will FANG come crashing down?
They did earlier this month. Netflix still underperformning.
Biotech is the old bubble. We don’t need that bubble anymore.
Dividend paying, high-quality, old man stocks will be the next bubble.
When will the REITS collapse?
When real estate in various areas of the country stops skyrocketing.
Anecdotal evidence is offcourse anecdotal but I live in an area of Baltimore where prices for row houses went from 200 to 400 in about 2 years. Every other place is being gutted and made into a 400-800k place. Last fall I noticed TONS of inventory sitting out there. In the past two months (and I know winter is a slow season) the asking price of houses have lost about 15%. And theres still a ton of inventory and houses being renovated.
http://m.tmz.com/#article/2016/01/28/martin-shkreli-ghostface-killah-threat/
Martin’s at it again. He’s getting ballsy.
This was another, Direct, Showtime-call
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added BIS to my longterm permanent lineup
over the summer. it was clear tech was being
bubbled into 14. and biotech thru 14 and 15. I
believed and said biotech specifically was
-being-used- to bubble. I contend it was
purposeful. To eventually release, deflate.
And that’s seemed to happen in a few
phases, or waves. BIS, was a glaring boldface
conspiuous pick. [It also implies the games
occurring right under everyone’s noses]