Successful Biotech Investing: Every Investor's Complete Guide by Joe Duarte M.D., Joe Duarte, David Richardson

Successful Biotech Investing: Every Investor's Complete Guideby Anonymous

Reader Rating:
See Detailed Ratings

06/04/2001: Dr. Duarte is an anesthesiologist, a professional stock commentator and an investment advisor. In this book he seeks to 'bring stock picking and science together.' The book gives you a basic scientific background of the biotechnology industry, describes the way that the industry is regulated in creating new drugs, profiles the leading pharmaceutical and biotechnology companies, proposes a way to evaluate the fundamental performance of each company, and describes the ways that you can use technical analysis to pick when to buy and sell these stocks. This helpful information is provided against the context of the wild swings in stock prices as the overall market and general news move stock price levels. He begins by pointing out that the statement by President Clinton and Prime Minister Blair that the rights of biotechnology companies should be restricted was a short-term storm, but a long-term non-event. Such moments provide buying opportunities. The book has two basic weaknesses. First, it fails to point out that most people should avoid biotechnology stocks. They should be very volatile, and can have stomach-churning drops that will cause many investors to sell at the worst times. The vast majority of ordinary investors should be buying broad-based index funds (see Common Sense on Mutual Funds). Second, the book fails to point out that the rate of discoveries in any given company should be slowing down in the future. This is because after a company is public, it will usually limit R & D to try to create a profit track record and because the science is simply more difficult and lengthy as more proteins and enzymes become involved in solutions. As a result, we could see very long time periods when investments will be under water. The book would have been strengthened by a section on valuation. These stocks are often overpriced, which increases the risks of owning them. If you have a multiple-year time horizon (such as being under 40), he is probably right that 'big bucks are possible for those who see beyond the short-term setbacks in biotechnology.' On the other hand, this should probably be a small part of your portfolio, even then. After you have read and learned from this book, I suggest that you think about your emotional profile as an investor. How have and are you likely to react to taking large losses? What percentage of the time do you need to see your stocks be ahead before you are comfortable? How much money do your feel comfortable losing in the short-term in one stock? These are important questions that will have a large impact on your success in stock investing. May you meet your finanical goals! Donald Mitchell, co-author of The Irresistible Growth Enterprise and The 2,000 Percent Solution