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Rolling the dice!!
Old 03-01-2005, 12:05 PM   #1
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Rolling the dice!!

O.K., I think somebody has said before that they are prudent/conservative with the bulk of their investments, but have a play fund to feel like a Manly Investor with......

.....so when I saw Elan Pharm. (ticker: ELN) get destroyed for pulling it's MS drug off the market, I thought "now this puppy is oversold!" and bought about 600 at $8 per share....what do you all think? Wish me luck!
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Re: Rolling the dice!!
Old 03-01-2005, 12:57 PM   #2
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Re: Rolling the dice!!

Quote:
O.K., I think somebody has said before that they are prudent/conservative with the bulk of their investments, but have a play fund to feel like a Manly Investor with......

.....so when I saw Elan Pharm. (ticker: ELN) get destroyed for pulling it's MS drug off the market, I thought "now this puppy is oversold!" and bought about 600 at $8 per share....what do you all think? *Wish me luck!
I think that if that's your investment thesis, you might as well have put it all on red.
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Re: Rolling the dice!!
Old 03-01-2005, 06:01 PM   #3
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Re: Rolling the dice!!

Hey, hey! I'm playing with nickles here! Most of my money is in index funds diversified etc. etc. This is my gambling fun, I can afford to lose it, but it's got better odds than Vegas!
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Re: Rolling the dice!!
Old 03-02-2005, 06:54 AM   #4
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Re: Rolling the dice!!

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Hey, hey! *I'm playing with nickles here! *Most of my money is in index funds diversified etc. etc. * This is my gambling fun, I can afford to lose it, but it's got better odds than Vegas!
You don't need to defend your actions. I know you're not the only one here that does this.
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Re: Rolling the dice!!
Old 03-02-2005, 11:57 AM   #5
 
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Re: Rolling the dice!!

Hi Laurencewill,
I have to admit I bought 1000 shares at $8.50. I wish us both luck. In retrospect we probably should have bought BIIB instead, it's already up $5 from it's low. I think we'll do OK though.

K. B. Sharkstooth
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Re: Rolling the dice!!
Old 03-02-2005, 01:39 PM   #6
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Re: Rolling the dice!!

The only reason I didn't buy BIIB is the share price was still too expensive for me to buy many (probably a good thing). It's got more products in the pipeline....basically, if the drug gets put back on the market with just a relabel, we'll be doing quite well. If not, well, we might still have half our money!
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Re: Rolling the dice!!
Old 03-02-2005, 04:18 PM   #7
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Re: Rolling the dice!!

I love bargains - looks like you got a pretty good one! I've been putting off buying in general with the high P/E's. Basically, our portfolio is in good shape.

A couple weeks ago I read that Pfizer was at a 7 year low so I checked it out - bought 1000 at 24.895 in a DRIP - Last trade today was 26.70. I think I'll sit on this a while.

JohnP
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Re: Rolling the dice!!
Old 02-16-2006, 11:35 AM   #8
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Re: Rolling the dice!!

I thought I'd bring this back up since I bought at $8.50. 70% in a year's not bad. How bought you Laurence still holding. BTW I used to be kbsharkstooth.

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Re: Rolling the dice!!
Old 02-16-2006, 11:55 AM   #9
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Re: Rolling the dice!!

Drug stocks are still depressed for many reasons. One is that the market has overly optimistic expecations for new blockbuster drugs with atmospheric margins like used to be the rule in the past. The generic drug industry is growing by leaps and bounds and Medicare Part D along with the huge drug distribution companies like Cardinal Health etc. are all demanding lower prices. Add to that the costs associated with R&D for new drugs and the fact that all the easy stuff has already been found and you have a ramping down of the overall profitability of major Pharma.

Add India and China to the mix and you have very low factory costs for generic drugs and a disregard for US patents (China, Brazil, Africa etc.) The result is lower costs of drug ingredients and final doseage forms that are making very strong inroads into the US and EU markets lowering prices and margins. This will continue to be the case for the next several years. Low cost producers of generics will force the US and EU major pharma. companies to move operations to lower cost areas (already taking place) and forging "deals" with the Chineese and Indian producers. Meanwhile, the US and EU phama companies still account for most of the R&D for new drugs and devices. They hold the patents but the legal costs to defend the patents against the generics companies is growing more each year. In the US alone, FDA is sitting on over 300 generic applications, each with an 18 month average approval timeframe and many of these are from non-US sources.

OK, back to my point...
Some smaller drug and medical device companies will continue to do well with 8-15% annual growth. Merck, Pfizer, JnJ etc require some pretty huge drugs to gain that much year to year growth based on their current size. The smaller companies may be fluctuate more but may also have the better longer term returns. Also, look at India and China generics companies. Dr Ready is one that is growing fast. Do some research and see if you want to dip your toe in a couple of these stocks.
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Re: Rolling the dice!!
Old 02-16-2006, 12:01 PM   #10
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Re: Rolling the dice!!

I don't find most of the research-driven pharmas attractive simply because of the aggressive generic competition and the dearth of new blockbuster drugs to replace those coming off patent. Its also a little spooky to see Dr. Reddy (?) aggressively challenging patents in court. The other thing that bothers me is that it seems like the pharmas have gone as far as they can in boosting drug prices and the pain for payors is great enough that they are fighting back.

I like the distributors better. My second largest position is PLMD, which is executing very, very well on Part D (unlike just about everybody else).
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Re: Rolling the dice!!
Old 02-16-2006, 05:22 PM   #11
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Re: Rolling the dice!!

Sold at a ~20% profit some time ago, I have a tendancy to take my money off the table too soon. (I'm Vegas' worst nightmare).
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Re: Rolling the dice!!
Old 02-16-2006, 07:08 PM   #12
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Re: Rolling the dice!!

Hi Laurence,
I almost always pick good companies but don't always take money of the table soon enough. I tend to hold and buy back into companies to lower my cost basis. It's worked well for BRCM,CSCO, CREE and SPLS, but not so well for JNPR and MSFT. I'm going to sell 1/2 of the ELON when it doubles if it does. If it doesn't I guess I'll buy back into it. I kick myself for not buying back into ELN when it went to $4.

kbst
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