Biotechs

[Louetta]

My biotechs have been getting croaked all month (I mean the legitimate ones, AIMT COLL OPK, not just that turkey SCYX). So have the biotech indexes like IBB. What's going on? Fears that Hilary will indeed win and she has railed against the drug companies? Other things?

Appreciate any thoughts.

[antioch6]

My brother got out of everything pharmacy and healthcare(pharmacy, drug compounding, assisted living, nursing homes) related in late 2014/early 2015. He thinks there will be huge government scrutiny coming to this area and it will be a complete headache to do business in. He doesn't think the business will be making the same lucrative profits as they have for the past 15 years, and there will be an overabundance of workers especially in the pharmacy area who will be disappointed and make for lower salaries vs the past. My dad is also an Md and believes drug prices are still too high, even for the generics. A drug that may have cost $200 as a brand name may only cost $40 now, but he says it's still too high because it only costs $1-$5 to make it. With increased public attention to the "evil" pharmaceutical big businesses and a government eye for cutting costs and raising revenues eventually, this is probably an area to avoid for at least the next couple(2) years.

My brother tried moving into real estate but is now trying to liquidate everything. In hindsight it was the perfect time to sell anything healthcare/biotech and move into something else. Even with the sector (XBI) down over the past year, I would have to repeat and say this is not somewhere for long term investments except special situations. Of course when the entire area gets bombed out there will be some great deals but I will have no idea how to find them. I don't invest in biotechs, and at this point us real estate is kind of pricey (MBB) but not reallly expensive. It just looks like one of those times where the low bond yields have already pushed most good assets up to a "fair" price and the stuff that looks on sale now has something wrong with it.

note - I am bearishly bias on smaller cap biotechs because I don't know how to evaluate a clinical stage company

[billyjoe]

A doctor friend told me years ago most pills cost .03 or less to manufacture. Then they ad the cost of 50 years of research expenses and god only knows what else. I've got one great stock medically related, MPW, medical properties trust. Up 38% this year and it pays over 6% dividend.

http://finviz.com/quote.ashx?t=mpw

---------------billy

[Louetta]

A doctor friend told me years ago most pills cost .03 or less to manufacture. Then they ad the cost of 50 years of research expenses and god only knows what else. I've got one great stock medically related, MPW, medical properties trust. Up 38% this year and it pays over 6% dividend.

http://finviz.com/quote.ashx?t=mpw

---------------billy

Very nice.

[riverbabe]

You all know where I stand on the huge risks of "investing" (trading) in baby biotechs. Pharmaceutical companies are a whole different ball game.

[TalishaFlores]

so what should we do then?

[riverbabe]

so what should we do then?

IMHO, safest way is to invest in biotech ETFs. Here is a list. Research them. Watch for trending market upward for biotech sector. http://www.nasdaq.com/etfs/sector/biotech

[billyjoe]

There will be a killing made in biotech stocks. If we can time it correctly.

---------------billy