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So I bought ELN recently when it dropped 80% on a product scare. *I though "hey, 8 bucks a share, probably can re-introduce the drug, they voluntarily pulled it off the market, sitting on 1.5 billion cash, not going to go bankrupt anytime soon, no debt maturing until 2008, value play!" ......a third patient dies on the drug, it drops to 3 dollars a share, and I'm out 3 grand. *
Soooooo, lessons learned, I should stick to (gasp) mutual funds, index funds, etc. since even this small dent in my portfolio left me gasping for air. *I'm holding the shares anyway, not much more to lose, and the company could always turn around in the long run..... :P
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Elan is a tougher sell.
With something like Merck, there is enough cash to pay the 4.5% dividend. So you can compute that into the return and reinvest it if the stocks gets any cheaper & if you're not living off your investments yet. Elan does not pay a dividend so you have to rely on what happens to the capital value. In the short term this means news will move the stock more. How an investment performs is hardly indicative of bad news and a fall in price. Depending on circumstances that often presents a better buy-in price.
Petey
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