Forum Archive Index - May 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Phaedrus,

>
>
>Gerry's recommendations have proved to be very reliable and
>profitable. Nevertheless, the supplementary use of technical
>analysis to assist in timing entries and exits can enhance these
>profits. PTD is an excellent example of this.
> 
>Anyone buying PTD on Gerry's recommendation ($2.30, 29/9/01) would
>have doubled their money in just over 4 months, only to give all
>their gains back to the market over the next 3 months. The use of
>some fairly elementary TA would would have obviated this.
> 
>  


Biotech in general, and PTD as a particular example, is IMHO some of 
the toughest territory you can wade into as an investor.   You're 
whole effort may come to nought or you may make your fortune.  And is 
is very hard to pick which technologies will lead to the latter 
path. 

Even if a product is technically brilliant there are all sorts of 
clinical multi-stage trial hoops to jump through.   Then, even after 
a trial is over it is not often easy to say whether the trial was a 
'failure or a success.  Remember the Genesis research psoriasis 
trial last year?   Genesis management gave the result the thumbs up.  
US investors gave the same result the thumbs down!  And the scary 
thing is that depending on how you see the trial will affect the 
business, both opinions can be right!

Often the income of these companies can be from the licensing of a 
patent to another biotech company for further research off on 
another tangent.  This is not always easy to predict.   And generally 
Biotech companies are cash consumers not cash producers.

So where does this leave the biotech investor?   He/She is tossed and 
turned between the vicissitudes of sentiment, riding the highs and 
lows on the way to the pot of gold, or annihilation!  It is amazing 
what you can imagine such a company is worth.  Assuming that a 
company will conquer a global emerging market and I am sure I could 
draw up a convincing business case to show you that PTD is worth $50.
By the same token I could just as easily draw up a case to show that 
because PTD doesn't have the financial muscle to bring the new 
artificial heart to market, and it is the yet to be introduced 
marketing partner that will be putting up most of the capital and 
taking the risk, that PTD is only worth a few cents.  

In the end there are so many factors to consider, so many possible 
scenarios, you can only follow the sentiment of the market, and 
don't invest more money in such a company than you can afford to 
lose.   PTD is the sort of company you must follow closely and the 
ideal tool to do all this is trend analysis.   Personally I'm not in 
the market to invest in such a company as PTD.   But if I was, I'd 
definitely take a course in elementary T/A.   So, surprise surprise 
Phaedrus, I agree with you 100%.

SNOOPY



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