The Biotech Investing Penalty Box
Started on Friday, 4-April-2014
When it comes to biotech investing, I’m a big believer that three-fourths of the battle isn’t deciding which companies to invest in, but knowing which ones NOT to invest in. Given that there are literally hundreds of stocks out there, I've always felt it’s best to play it safe and just move on when red flags do crop up. Life is too short, and money is too precious, to invest in something if you are not 100% comfortable with all of the risks associated with it.
Below is a list I’ll update as I come across examples of what I believe are deal breakers that make companies uninvestable. I'm not talking about ticky-tack stuff, but items so egregious that I would likely stop right there and take the stock off my radar for good. Everyone should create their own set of investing rules, so the goal of this is to share real examples and insights into mine. You can click on the company name to see a brief description of the infraction and why I think it is important.
A few points: First, all of this is obviously just my opinion. I'm wrong about companies all the time. You might disagree about some, and that’s okay. Second, it doesn’t mean names on the list won’t turn out to be good stocks or trading opportunities. What it does mean is that I personally won’t lose sleep about missing out on them if they do. The risk of getting burned is not worth it. Third, this obviously will never be an all encompassing list. I'll try to periodically add things as I nontice them. I’m always interested in suggestions, so please tweet me and let me know if you find a company that deserves to be added.
Without further adieu, here we go...
Update: I quckly learned that this project was taking too much time to keep up. A good idea, which maybe I will revisit in the future.
Who Am I?
I'm an individual investor from Kansas City. My focus is on biotech stocks, but I enjoy investing in all industries. I'm an old-school, buy and hold investor who believes the best way to outperform and grow capital is to own innovative companies with good management teams over the long-term. more>>