No More Biotech Shorts for JakilaTheHun (Damn You HEB!)
From this day forward, I will short biotech stocks no more forever!
Damn, did I ever get burned on HEB! Mind you, I don't short in real life (too risk averse), but I do a bit of shorts for my simulated portfolio on KaChing and I give the red thumb on a lot of biotechs here on the Fool. Admittedly, part of the reason I did this was to learn more about the sector. Mission accomplished. Here's what I've learned:
(1) All small cap biotech stocks are speculative
(2) Random surprises can completely destroy you
(3) Biotech stocks can trade at fantasy valuations for a very lengthy period of time
(4) It doesn't matter that you know 8 out of 10 of your biotech shorts are junk; you can still get burned for a very long time
Fortunately for me, I did understand that these stocks have high risks associated with them and never held very large short positions on any of them for the simulated portfolio. Overall, I've probably only loss about 2% of my portfolio value on them; which isn't bad for a portfolio that is up 72% over the past six months. But still --- if my main mission was to experiment with shorting biotechs, my lab results tell me to just keep the hell away in the future!
From now on, I just watch zzlangerhans portfolio here on CAPS and will not touch these things myself. I'm sticking to what I know. :)