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JakilaTheHun (99.94)

No More Biotech Shorts for JakilaTheHun (Damn You HEB!)

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June 05, 2009 – Comments (5) | RELATED TICKERS: 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. :)

5 Comments – Post Your Own

#1) On June 05, 2009 at 10:00 AM, ChrisGraley (31.87) wrote:

I got burned by them and a couple of others, as well.

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#2) On June 05, 2009 at 12:52 PM, ChrisGraley (31.87) wrote:

huge drop in them today jakila.

they are destined to fail.

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#3) On June 05, 2009 at 12:59 PM, portefeuille (99.75) wrote:

I just made my first biotech "underperform" call (on HEB) (see comment #524 here)(also see this:1,2).

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#4) On June 05, 2009 at 2:58 PM, JakilaTheHun (99.94) wrote:

portefeuille, I'm in total agreement that HEB is crap.  Just don't even want to deal with the ups and downs for biotech stocks any more.  My belief is that so many people trading them have absolutely no understanding of the science behind them that they can trade at ridiculous valuations for very long periods of time.  So even if you're right about a company --- what's to say it doesn't take you 10 years to collect --- in 10 years you could have used your money much more wisely on other investments. 

HEB's a classic example because it appears that people had identified this company as a joke as far back as 1998 --- yet, it's still around and kicking. 

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#5) On June 23, 2009 at 6:19 PM, portefeuille (99.75) wrote:

a new HEB article by feuerstein

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