Investing 102

[GregWeld]

RE: ABOVE POST


The point - which I failed to include in the above post..

Companies that come to market -- or are in the market already - who's SHARE PRICE are built on HIGH GROWTH EXPECTATIONS... need to have every metric GROWING not "decelerating". They can fail to make a profit for quite a few quarters and still be rewarded with a high P/E share price... but high growth needs to be high growth or you get your ass handed to you. That's pretty basic fundamentals.

[sebtarta]

Greg what do you think about this company Mannkind being approved on their insulin inhaler for diabetes? MNKD

[GregWeld]

Originally Posted by sebtarta

Greg what do you think about this company Mannkind being approved on their insulin inhaler for diabetes? MNKD

I don't -- because I don't know anything about the company. Plus I don't do recommendations about when - who - what - how much - etc.... I'm more or a "how to think about stuff" kinda guy.

Only names that really get discussed on here are the ones just used as examples or what to think about and here's why kind of discussions.

[JKnight]

As an addition to the "way of thinking" discussion as it pertains to boutique pharma companies...I would never want to invest (remember investing and gambling differ) my $$ with a firm whose revenue, income, hopes and dreams are riding on the FDA approval of one product. Not saying the one you mentioned is, as like Greg, I know nothing about the company.

These firms are not valued the way most best-of-breed companies you've seen discussed in this thread are. So might you miss out on a 400% gain when the new product gets green lit through the final stage of FDA approval? Sure...but you might also miss out on a 50+% loss when the thing dies on the vine since the market knows their product pipeline had nothing else in it.

[GregWeld]

Good reply JK...


I looked at the company after the OP... Just because I love this stuff.


So to use them as an example... MannKind (MNKD).


Over the long term chart - they're DOWN 27% -- and that's AFTER a 58% run up in the stock prior to getting the FDA approval for the newest drug.

No dividend. And the stock was at $20 in '07 then dropped like a rock to $3 and less for about 5 years. A couple short term blips to the $10 range when I would ASSume some news about stage this or that trials were favorable. Then sold off right back to the bottom.


Here's the investing 102.

I can't possibly spend enough time to be up to date on the latest greatest drug trial - or who has a competing product in the pipeline... Not to mention I hate Yo-Yo stocks. Rich one day broke the next. No dividend. No knowledge. No investment.

There's no doubt that if you can stay on top of this stuff - there's HUGE money to be made... There's also huge money to be lost when your picks fail to get approval - or get sued because somebody did something which is blamed on the drug or treatment. I'm not being negative -- I'm just being truthful for what happens to 9 out of 10 investments like this.

If you're in the business -- up to date -- understand the MARKET or the product that is ultimately brought to market... Then maybe you can make some money in these.

But this is INVESTING 102... not "let's pick the next hot stock to lose money on"... and I would think that unless a guy is playing with several hundred thousand dollars -- he should steer clear of the "next hot thing".

I play with some of this kind of stuff... but I don't discuss it in this thread because it's just not appropriate. That would need to be a different thread titled --- What rich guys do with their play money -- or something along those lines... Or Stock market gambling how to lose money overnight. :>) Maybe "I went to bed rich and woke up broke"? I kinda like that one. HAHAHAHAHAHAHA

[CamaroMike]

Maybe its just me but whenever I hear something about pharmaceutical stocks I think of JP Marlin and Stratton Oakmont lol

[toy71camaro]

Originally Posted by GregWeld

Maybe "I went to bed rich and woke up broke"? I kinda like that one. HAHAHAHAHAHAHA

lmao. Thats a good one. That could be a bit interesting!

[toy71camaro]

Oh, and a side note:

7/1 = DISTRIBUTION REINVESTMENT: KO
7/2 = DISTRIBUTION REINVESTMENT: KMB
6/27 = DISTRIBUTION REINVESTMENT: LMT

Woot! Paydays.

[GregWeld]

Originally Posted by CamaroMike

Maybe its just me but whenever I hear something about pharmaceutical stocks I think of JP Marlin and Stratton Oakmont lol

I had to look that up to see what the reference was. I never saw the movie. But yes --- the parallel could be made there. And not just pharma stocks - but any company where there is similar "amazing upside" but little in actual real business to back that up except a lick and a promise.

To be clear --- with all due respect to Sebtarta (the OP) I mean no disrespect for his question. If you're new to the thread -- without reading about half a billion pages -- you would have missed the full idea behind the thread. So - Sebtarta - please don't take our pokes at this type of investing as a personal shot. But this type of investing is EXACTLY what this thread is about in a 180* way. The thread became a blog almost - but about how to safely invest - how to get started investing - how to stay invested without gambling or stewing about big quick losses etc. So unfortunately for your questing -- it played right into the "WHAT NOT TO DO" that this thread has tried to cover.

Originally Posted by toy71camaro

lmao. Thats a good one. That could be a bit interesting!

It happens all the time....

Originally Posted by toy71camaro

Oh, and a side note:

7/1 = DISTRIBUTION REINVESTMENT: KO
7/2 = DISTRIBUTION REINVESTMENT: KMB
6/27 = DISTRIBUTION REINVESTMENT: LMT

Woot! Paydays.

Don't ya just love getting paid like that! It's just such a satisfying feeling. Regardless of the AMOUNTS --- just seeing those credits to your account brings a smile to a guys face.

[GregWeld]

So let's just stay on this question about MannKind (MNKD) for another post.



A couple days ago -- the big news was about the FDA approval of a new product for them --- which created the question from Sebtarta. To which I responded that "I don't know anything about them".

That quote is really larger than just about the one single company. I have often stated in this thread to stick to what you know and understand. To do otherwise is a tar pit trap. You buy based on something you've heard - or buy because something is going up and CNBC is talking about it... But you really have no GD idea what the larger picture is - competitors - revenue - growth potential - management... etc.


So this is TODAYS news on MannKind (MNKD) --- and bam! Down 4.5% from yesterday. When I'm trying to earn 4.5% or 5% in dividends (and get capital growth on top of that) I don't need to be down that much in one day. And these kinds of stocks are purely NEWS DRIVEN or event driven. UP DOWN UP DOWN... Personally... my stomach can't deal with that.

Now -- the stock could shoot to the moon.... and many people could make a killing on it. But you could also just as easily get killed. I don't want to invest in that kind of risk. I'd rather be like Albert and roll out my dividend calendar! LOL



Cut and pasted:



MannKind Corporation (NASDAQ:MNKD)’s inhaled insulin drug Afrezza won the USFDA approval on Friday, June 27 for type 1 and type 2 diabetes. Though it’s a positive for the biopharma company that doesn’t yet generate a revenue, there are some big concerns around potential commercialization of Afrezza. That’s the key reason JPMorgan’s biotechnology analyst Cory Kasimov still has a Neutral rating on the stock with $6 price target, reflecting about 40% downside potential.