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Sunday, December 14, 2008

2009 Predictions

There are not many companies left in Seattle. There are more than the CCS is aware of but many of the big players went down or were at least knocked down a peg last year. 2007 was already covered at the beginning of 2008. Dismal. But what about the upcoming year? I know that people will have a bias that the CCS is optimistic about the upcoming year of scientific discovery among the scientists of Biotech. But wait, I've got to admit that I can be a little negative from time to time. For example:

Gilead is expanding and hiring:

I predict they will grow in the most foolish ways imaginable. They have the brass from the ruins of Corus and they have no idea what they are doing. They do have a lot of money to spend however and they will do so for the sole purpose of creating a Cargo Cult Airport. It will be a nice facility with lots of promises presented on all of the lastest equipment available from Dell and software from Microsoft.

But I can also be positive. For example:

Amgen will rebound.
It's an untestable osteoporesis drug. No harm means no foul. Lots of money will be handed over and the leadership will go back to spending the profits on their own Cargo Cult airports within the organization. Their RNAi projects will quietly start to fade and antibody work will be pumped up using new technologies bought from smaller companies.

I'm not an insider. I'll find out what is going on nonetheless. It makes life in the biz much more interesting.

Sunday, December 07, 2008

How Can You Lose?

"Harry is an experienced portfolio manager who has a proven track record of success."

So says Adam Banker, a spokesman for Fidelity Investments. Harry Lange runs Fidelity Investments' Magellan Fund. The Magellan Fund has seen assets decline 83 percent since reaching a peak eight years ago. The 18.6 billion dollar fund declined 52 percent this year, trailing 99 percent of competing funds.

Somebody had to finish towards rock bottom. It makes you wonder what funds trailed the Magellan Fund. Did their managers also have a proven track record of success?

My interest in the financial worlds folly is directly tied to Cargo Cult philosophy. Clearly the world has seen behind the Wizard of Ozs' curtain. They didn't see failure coming anymore than they saw success in the past. These are the same people who invest in Biotech. Someone points out that RNAi is a hot investment because SIRNA sold for over a billion dollars. Fund managers get their clients checkbooks out and go looking for RNAi companies. Meanwhile it is no certainty that any of these people know what RNA is, let alone RNAi.

I'll end with a funny story about a biotech investor. This person was looking for investments in a hot biotech field he had just heard about. He called the investor relations department. A very nice lady who had just started in the department answered the phone. She had just been promoted up from her previous position as receptionist. Before that she spent 7 years as a secretary at the local high school. The investor spoke authoritatively to the nice lady. "Yes, can you tell me if you have any research taking place involving monoclonal antibiotics?"