Stories of biotech companies getting acquired and then having their drug prices multiplied overnight by unscrupulous owners is going to backlash into new Gov't regulations, at least a rational mind would think.
The game of developing drugs and ripping off customers of their lifesavings is akin to highway robbery. Time for the sheriff to come around and help. Well, the sheriff has spoken: Janet Yellen has warned about the bubble valuations of Biotech stocks and they have rallied 75% since her warning. I recall Greenspan warning about Real Estate in 2002-2003-2004 and then finally by 2007 it was falling apart as new regulations shut off lending. How do you shut down the biotechnology bubble?
I don't know, yet.
IBB 342.59 last 342.52 last 1:22PM EST Sep 21, 2015
Here's what I added to my "KEY HIDDEN LEVELS CHAT ROOM" after I posted this chart:
I have the MOST CONSERVATIVE PERSON I KNOW telling me that some biotechnology stocks look like good investments now
This is what bubbles look like - when people change their opinion about risk after a long period of outperformance.
Imagine someone who thinks that it is too dangerous to have more than 2% of their money in any one stock now thinks that
having 10% of their money in a biotechnology stock is ok.
THAT is a bubble.
I kid you not.
This is REAL.
Now, I see the Biotechs as basing out as the uncertainties around the election are disappearing. The biotechs look constructive here, but I'm not "all-in" long, just seeing very constructive action in a handful of names.
October 12, 2016 1:56PM EST