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Old 05-10-2009, 12:49 PM   Nav to Top  #1
JonW
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Question Trading Style for Biotechs/Pharms???

THE QUESTION MARKS IN THE HEADER ARE THERE FOR A REASON!!!

As promised in the HEB thread I'm posting these thoughts here more as a discussion starter than anything else. I am not an expert in the subject and I know there are others here that have made grand statements about Biotechs so guessing there's some significant knowledge out there that will rush to put me right - that is the object so don't fear to shoot me down!!

Biotechs/Pharms are:-

fashionable
high risk
high reward
a potential minefield for newbies
exciting
scary

all at the same time!! XD

There have been some threads pointing to 2000% increases and whilst these are theoretically possible you are just as likely to crash and burn. This article is where the 2000% figure comes from:-

FDA Watchlist - (AMEX: HEB)

What is more interesting (and probably more pertinant to this thread is the suggestion that you can just as easily LOSE 40% (or more I would suggest)

Logically then, if you look at how the average stock climbs towards the FDA date there is money to be made in the following very simple way:-
  1. buy as many different stocks as you can afford (i.e. spread)
  2. check out the FDA dates coming up
  3. enjoy the hype and rise leading up to the FDA date
  4. As it peaks just before (say a week, but you will get a feel for this) sell HALF your holding
  5. that will cover the theoretical 40% drop
  6. leaving you to know that if your stock crashes you've covered your losses but if it rockets - you have that big smile XD
You will always be happier to get 50% of a 2000% rise than 100% of a 40% loss.

This seems to me a good hedging game and having played it a few times I know it has worked. I'm sure (and I hope they share) that some of you will know times it hasn't worked but as a safe'ish ploy for a new investor its as close as you can come to safe for these hard playing stocks.

As a help to start you off here is a list of upcoming FDA dates:-

12 Extreme FDA Trades on New Product Decisions -- Seeking Alpha

Okay, that's it from me - let the discussion begin!!!!

Cheers,
JonW
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Last edited by JonW; 05-27-2009 at 04:22 AM..
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Old 05-10-2009, 12:49 PM   Nav to Top  #2
SeanECE
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Lightbulb BioPharmas ACUS / ADLS / BDSI / CTIC / DDSS / DSCO / HEB / NFLD / SPPI / TSPT / VION

There have been tech booms, dot com booms, housing booms, credit booms and I am sure another 3 dozen I am missing. Given the administration of the United States of America, I believe the next major boom will be small Pharmaceuticals. We are getting away from god and turning to science.... I love it. So, I ask you all, what are the juggernaut little stock plays in the next year?

Here is one article touting a dozen good companies with release dates....
12 Extreme FDA Trades on New Product Decisions -- Seeking Alpha

Given TTNP, which blindsided most all of us last week, mini-Pharms could truly be the best investments in the coming year. Now, I am not saying there will be a 3200% increase like TTNP, but I surmise there will be greater increases in stocks rather than decreases. Think about it, a stock that could potentially quadrupole for passing the approval process OR losing 40-60% because of failing an FDA approval process. And by the looks of it, there could easily be a few Gems out there like TTNP's frickin' insane jump.

My 2 cents/pence,
Take it for face value,

Sean

P.S. Anyone have any other BioPharms with near distant release/approval dates?

P.S.S. My pony is......... (surprise)....... BIPH. Good luck to all!
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Old 05-10-2009, 12:56 PM   Nav to Top  #3
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JonW, yell at me when you read this post. Our timing is too funny
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Old 05-10-2009, 01:01 PM   Nav to Top  #4
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There isn't a trading style. It's just betting in my opinion. Edit: I'm talking about FDA approvals.

When a pharma already has a proven product: I watch the figures: Expected annual market globally/US only, what percentage of the market do they expect to gain, and how new is the technology (Know-How, like GTC Biotherapeutics).





Which doesn't mean I don't bet on pharma's

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Old 05-10-2009, 01:19 PM   Nav to Top  #5
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I think Trants' "free stock" strategy is perfect for the biopharmas awaiting product approval.

Set a stop-loss should you find you got in too late, and of course have a % increase in mind to sell and ride the remaining shares to either glory or defeat.
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Old 05-10-2009, 06:50 PM   Nav to Top  #6
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definitely have to go with the free shares motif.
if you can manage to find a stock that has a good history, hopefully beat down alot, play it, let your free shares take the gamble on FDA approval.. you have nothing to lose but thousands of % to gain. doesnt have to .02 either...i found a decent pick sitting at $2.30 this past week.


OREX.. orexigen theraputics...
this past thursday i bought into OREX (they do obesity drugs) and have a few flagships so to speak already, and have 2 in the pipe right this moment. 1 in phase 3 Contrave, and one in phase 2 Empatic... awesome earnings/sales ration but a lil' fiscally irresponsible.
how i found em- theyre already 80% off there 52 week high and has been so for the last 2-3 months, and had they're 1Q reports on the 7th (the day i bought) which ended up to be expected, nothing to brag about middle of what the analysis figured. i watched it dip n anticipation, and come back on friday and settle at 2.79, with high volume.

i'm going to be watching her close, and have my trailing stop in it's shadow.

52 WL- 1.55
52 WH 12.28
i got in 500 @ $2.30
current (may8th) $2.79

so if i can seel in a 25%-50% gain and take a "free" gamble at Contrave/Empatic in the future. sweet. we know investing isn't about 2000% gains, and we know how few and far between they actually are. i say we keep an eye out, use this think tank and possibly foretell some explosive moves.

theres a whole bunch of other details about OREX.. i didnt make a thread about this because i lack confidence in myself/picks (to be honest), which i'm working on.





oh listen to this.. i went back over all my trades the past 6 months i've been investing and incorporated a 15% free shares "what if scenario".. my porfolio would be about 20% higher. i'm never not doing the free shares again.

Originally Posted by Stealpulse View Post
I think Trants' "free stock" strategy is perfect for the biopharmas awaiting product approval.

Set a stop-loss should you find you got in too late, and of course have a % increase in mind to sell and ride the remaining shares to either glory or defeat.
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Old 05-10-2009, 10:52 PM   Nav to Top  #7
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As recommended on the HEB buy, I also said I believed in the free stock approach. This is the best way (imho) because many times, the decision is either delayed or denied, only to be tried again at a later date. If you can accumulate free shares, you can leave them tucked away in your account until the day (hopefully) that the company has a drug passed. If the company goes bankrupt, what do you lose? Not very much, just some profit. HOWEVER, if you enjoy waking up on a random morning and seeing free shares at a +1000% gain, this is the best way to go about it. There is no reason to risk money when the stocks are pumped in the weeks leading up to the decision (Unless you know it will get approvedXD)
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I'm putting in my market order right now on this b! --> TTNP thread title in Premarket 5/7/09..that one is for the ages!

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Old 05-10-2009, 11:25 PM   Nav to Top  #8
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Always.. ALWAYS... COVER YOUR ASS. Especially with these stocks, they can plummet faster than they take off. If you want to take a more logical, sane approach, sell half if you get that lucky 100%.
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Old 05-27-2009, 04:03 AM   Nav to Top  #9
JonW
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Default Tips for Biotechs?

Originally Posted by SeanECE View Post
JonW, yell at me when you read this post. Our timing is too funny
Thanks to Sean for moving this thread over from the VIP traders lounge section for me. As you will see he and I posted virtually the same thread at the same time back on 10th May, but Sean charitably put my post first in the thread.

It is somewhat late arriving here given all the hype on HEB, CTIC, GNTA and others but the main object at first posting was to try keep people in general (and newbs in particular!) out of trouble on the volatility of Biotechs/Pharms. The idea was to get some discussion going but in reality a lot of what is said here now has appeared in one form or another in other threads.

That said, if you have something to add - feel free.

Thanks,
JonW

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Old 05-27-2009, 04:08 AM   Nav to Top  #10
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Anytime JonW, this thread is tag-a-licious. Joking aside, I cannot wait to get more information about these companies!
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