I traded the dot com bubble and started my career by winning in it. It’s very common for people to refer to a market euphoria as being “dot-comish”. But the truth is, no matter the level of enthusiasm, there hasn’t been a sector that has matched the dot com bubble profile since 2000. Reason being: most of the stocks that are lifting off now do so methodically and are earnings per share positive.
UNTIL NOW.
The biotech or biochem sector is in the middle of a lunatic phase, whereby everything is melting up, frantically and without top hat, and 90%+ of these companies won’t make a dime for another decade. It’s the perfect sector, isn’t it?
Have a look at some recent returns, on a 1 month and daily scale.
ICPT is the new Geocities and there are a few dozen companies like it dying to come public.
Keep in mind, these companies have a proclivity of blowing up by 90% inside of a single session upon receiving heinous news that their drugs do not help anyone, but kill or maim people. Every so often, you will find a real one, like RGEN, and make a bundle. Like the dot com bubble, I intend to play this sector, but not get attached to it and certainly do not get lured into the sexy stories of cures for cancer and baldness.
Comments »