I recommended shorting Avanir at $4.62 on 5/31/2011. Friday, 11/25/2011, the shares closed at $2.00, or -57%. This is annualized return of 146%. Even if shorting Avanir was a small position in your portfolio, you would be having a good year on this trade alone. Congratulations if you joined me in shorting.
Avanir is not a compelling long just because I am no longer short. When I invest, I am acutely focused on the return profile of the proposed investment. Quite simply, I have to have some idea of what the return profile is, and the risks associated with that profile. Funding of the trade is relevant as well -- most of you don't operate insurance companies or other businesses that bring in cash. Don't mistake the ways others invest for things that you should do unless you fully understand their "setup".
One silly myth I'd like to dispel is that it's difficult to make large returns shorting stocks like Avanir. The 146% annualized return generated in this trade is a building block to some of the best returns you can get in the market today.
I'm not here for page views. I'm here to make readers money. Why? I have my reasons - suffice it to say, it does not involve manipulating your thinking. A sucker is born every minute, and the supply of people who want to get rich quick will never dry. One person could never combat these waves of ignorance.
Let us recap the performance of my ideas thus far:
Martin Shkreli Idea Performance
| Entry | Price | Exited | Price | Days | Return | IRR | Comment | |
| Neoprobe (NEOP) | 6/1/11 | 5.25 | 8/5/11 | 2.00 | 65 | 62% | 1401% | I will never make this much money this quickly again. |
| Oncothyreon (ONTY) | 7/25/11 | 10.00 | Ongoing | 6.66 | 123 | 33% | 133% | I will hold this until Phase 3 blowup. |
| Avanir (AVNR) | 5/31/11 | 4.62 | 11/25/11 | 2.00 | 178 | 57% | 152% | Good trade. |
| Mesoblast (MSB AU) | 8/18/11 | 7.95 | Ongoing | 6.80 | 99 | 14% | 62% | This is my favorite idea. |
| Biomarin (BMRN) | 6/8/11 | 27.12 | Ongoing | 32.25 | 170 | 19% | 45% | I may hold this very long-term and I would refer you to the paragraph regarding "setup" above. |
| Chelsea (CHTP) | 7/29/11 | 5.08 | Ongoing | 4.35 | 119 | -14% | -37% | I still like my lone loser, Chelsea. |
| Zalicus (ZLCS) | 7/6/11 | 2.60 | 11/9/11 | 1.16 | 126 | 55% | 256% | Easy money. |
| Human Genome Sciences (HGSI) | 8/28/11 | 12.63 | Ongoing | 7.03 | 89 | 44% | 346% | Close to closing. |
| Star Scientific (CIGX) | 6/5/11 | 5.26 | Ongoing | 2.55 | 173 | 52% | 142% | May close. |
These results are great, but the IRR assumes you can continue to find high quality ideas routinely. If you do this full-time, like me, you might be able to. I haven't published a lot of new ideas as I've been busy with some other major projects. However I promise to give you a fresh batch shortly!
Happy trading.
Disclosure: I am short MBLTY.PK, ONTY, CIGX, HGSI, NEOP.
Additional disclosure: I am long CHTP and BMRN. I may change my positions at any time without notice.
