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TMFBlacknGold (98.74)

Biopharma Run-up is Ruining My CAPS

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September 22, 2012 – Comments (11) | RELATED TICKERS: PPHM , NSPH , PCYC

The recent summer run-up in the biopharmaceutical industry has been responsible for a loss of over 1,300 of my CAPS points. This is, of course, my fault for shorting them in the first place. I guess I just never thought it could get so out of hand. For instance, my red thumb on Peregrine Pharmaceuticals (NASDAQ: PPHM) is worth almost -900 points since June 1st. I was feeling pretty confident in shorting crappy companies with low market caps and bleeding balance sheets, so I made the mistake of red-thumbing at $0.54. Funny thing is, I remember seeing zz's green thumb right when I went to submit my pick and thought "Gee. Maybe I should follow the big guy." Well, I didn't. And it is costing me dearly.

zz has a ridiuclous understanding of the industry and follows it much more closely, so he is able to flip picks more quickly than I care to. My recent ordeal just makes me admire his skill even more. New members please take note!

Has anyone else been screwed by the biopharma run-up? I have set (stop-loss) close limits in CAPS hoping to catch a better score on my picks and get out. Should I hold off on my limits with any of the companies listed below? I don't think any of the runs are completely sustainable, but I'd rather just take my lumps and move on. Accuracy is not an issue for me here.

All feedback or discussion welcome. You will enjoy my misfortune below =)

My top-losing picks (score of -20 or worse):

PPHM  -878.56  (2nd worse on CAPS! Yeah!)

NSPH    -142.92

PCYC    -86.50

CLSN    -74.88

MDGN    -70.12

RPRX    -63.50

Total    -1,316.48

 

BlacknGold 

11 Comments – Post Your Own

#1) On September 22, 2012 at 10:26 PM, awallejr (81.59) wrote:

At least you didn't lose over 1,150 points on just one pick like poor impetuousfool did on MDVN heheh.  And he still has a rating over 99!

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#2) On September 22, 2012 at 11:05 PM, zzlangerhans (99.80) wrote:

Don't forget that 100000 CAPS points and 75 cents buys you a copy of the Daily News. Losing scores on CAPS are a great way to keep track of opportunities for real life buys and puts. I've been doing great this year buying busted CAPS green thumbs like Alexza and Insmed and I'm working up the nerve to drop puts on shaky run-ups like Celsion, Acadia, and Sunesis once the timing of the binary catalyst becomes clear. Even if you missed the run-up, all is not lost. In biopharma it's always sunniest just before the total eclipse.

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#3) On September 23, 2012 at 9:02 PM, portefeuille (99.60) wrote:

This is how "my long only biopharma fund" has done. Making decent "underperform" calls has been not all that easy lately, I suppose.



enlarge

 

the fund on twitter.

https://twitter.com/portefeuillefun.

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#4) On September 24, 2012 at 6:34 AM, TruffelPig (< 20) wrote:

Maybe your judgement of "crapiest" needs some serious adjustment. 

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#5) On September 24, 2012 at 8:37 AM, pavlos1971 (99.54) wrote:

Dont worry too much about PPHM.  They trade at 0.75 in premarket today.

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#6) On September 24, 2012 at 8:53 AM, TMFBlacknGold (98.74) wrote:

@pavlos1971

Yeah that will be a nice boost. About +800 pts to start the week. Not bad....

@awallejr

I've seen worse than -900 too, but you never think "That could happen to me" until it happens to you.

@TruffelPig

I have done well shorting crappy OTC companies and the majority of my biopharma picks have turned out well too.

@portefeuille

Amen brother.

@zz

It is just a game, but I'm pretty competitive. It's also been nice to see my score grow from poop to decent status since I learned how to invest partly through CAPS.

 

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#7) On September 24, 2012 at 9:43 AM, PoolSkunk (71.09) wrote:

TruffelPig has been pumping Peregrine since he got locked in big at over $2/sh. 

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#8) On September 24, 2012 at 10:06 AM, TSIF (99.96) wrote:

My solution to a bad turn on "crappy stocks" is:

1. Was there a permanent change to my thesis?  A run-up before a binary event is not a change.  An approval when none was expected, or perhaps better phase-x data might cause me to bail.  Especially if I entered at a bottom.  Even PPHM not see it's $0.50 bottom for awhile, even with the last reset. 

TEN, however was a "real company" that I shorted due to a thesis on debt that didn't pan out. I booked my negative 600 when it ran away on me when I was gone from civilization for 3 weeks.  I would have dumped it sooner. It was before "limit orders".

2.   My patience level.....generally it's better than it use to be.  Normally, a huge run-up on a stock I've thumbed down is now "points in the bank".  I'll take my PPHM points back today.  I suspect I may have to wait to get all of my BIOF points back, but most of them will be back in a week or so.


Yep, just a game, helps flag buy opportunities as zz aptly said, or an analysis of what to change, if anything in the future.

I use to say that I would never downthumb another stock sub-$2 again....but I've changed that to I will not downthumb a "real" stock under $2 again....definition of a real stock, however, varies.

Good luck!

TSIF

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#9) On September 24, 2012 at 11:18 AM, EnigmaDude (88.53) wrote:

You should recover lots of points from PPHM today!  But I would suggest that you close NSPH before you lose too many more points.  See this article that explains why:

http://www.thestreet.com/story/11702015/1/nanosphere-a-low-risk-high-growth-diagnostic-stock.html?

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#10) On September 24, 2012 at 4:39 PM, TMFBlacknGold (98.74) wrote:

@EnigmaDude

I've never been happier to see a score of -93!

 Thanks for the article on NSPH - I'll have to do more research as it looks pretty interesting. zz never responded to your comment on his pitch (pre-approval) a few months back and I'd love to hear if his opinion has changed.

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#11) On September 25, 2012 at 12:33 PM, XMFCinco (29.86) wrote:

If you think that's bad check out my -2117 on PCYC! A good lesson on the potential dangers of shorting.

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