That's it, no more freaking small biotech/biopharma!
February 08, 2007
– Comments (2)
One area where my stock picking abilities have been less than stellar (read smells like roadkill) is in the small biotech/pharma/biopharma arena.
The problem is that stock prices seem to be deeply irrational there. I shorted a lot of companies that have no products, no income and no cash, and they went up! Then I went long on companies with products and they went down!
What I think is happening is that unlike more normal stocks where the more that is known about the business, the more confidently you can invest, in the small companies, the less that is known, the more the plungers can drive stocks up or down for no rational reason. This is kind of the same thing as romance where the less you know about a person the more romantic it is.
I've wondered about doing reverse calls where I do research and then bet the other way, and I might try that a time or two just to see. But for now, I'm staying away from those sorts of stocks (in CAPS and in the real money world) and letting the punters have their fun.
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