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Over 30 years of investing in individual stocks. Extensive business experience with small to mid-size companies, including as CEO. Many hundreds of blog posts on financial and economic matters since 2008. Focus on value with catalysts for upside price action. Background as a physician and... More
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  • World Health Org Now Recommends All HIV+ Patients Get Treated And All High-Risk People Take Prophylaxis

    The world's HIV positive patient community and all high-risk individuals received some important opinion input from the WHO today. From Yahoo! Finance:

    GENEVA, Sept 30 (Reuters) - The World Health Organization (WHO) said on Wednesday that all people with the HIV virus should be given anti-retroviral drugs as soon as possible after diagnosis, meaning 37 million people worldwide should be on treatment.

    The WHO, in a statement expanding current guidelines, said recent clinical trials confirmed that early use of the drugs extended the lives of people with HIV and reduced the risk of transmitting it to their partners.

    All people at "substantial" risk of contracting HIV should also be given preventive anti-retroviral treatment, not just men who have sex with men, it said.

    This is medically important news. I have reported on the underlying clinical trial(s) previously.

    Also, this is a positive for Gilead (NASDAQ:GILD), which markets Truvada, a preventative for high-risk MSMs, i.e. men who have sex with men. GILD also, of course, is the world's #1 developer and marketer of combination drug products that effectively treat HIV/AIDS. I'm not certain, but I'm hoping that the roll-out of the "TAF-Truvada" product next year to replace Truvada will be labeled as Truvada is for prophylaxis for high-risk individuals. This is one very large untapped market where the public and individual good would mest very well with the financial interest of GILD and its shareholders.

    Sep 30 1:26 PM | Link | 6 Comments
  • Should Investors Be Concerned About The Biotech Sector's Price Action?

    Regular readers know that around mid-June, I began flagging biotech as ripe for a sharp sell-off, similar to that which Internet/tech stocks suffered in 1998, before going to the moon (and back again). Biotech was then around its high. Now that many stocks are already in their own private bear markets, we are seeing the trend-followers scare people some more. Optimistically, and per the 1998 scenario, this begins the bottoming process. An example, per a Barron's blog today:

    As we've highlighted over the last few weeks, we're getting more concerned about the Biotech stocks. The Biotech Index made fresh 3-month relative lows yesterday and recently closed below its 10-month moving average for the first time in roughly 5 years. Short interest is also very low, reflecting some complacency. Our best guess remains that a period of underperformance is likely ahead for the group - we would fade a near-term bounce.

    This is par for the course. As I see it, this sort of thinking implies that Gilead (NASDAQ:GILD) at 9X annualized H1 2015 GAAP EPS is less attractive now than when it was "acting well" with a stock price over $110 a year or so ago, or over $120 some months ago. It's pure mo-mo investing, aka short-term trading. As of 8/31, about 1.7% of GILD's shares had been sold short. I don't see that as evidence of complacency, simply good sense by investors not to pay a broker the call rate, then be out the dividend, to bet against shares of a great company that has long ago stopped being hyped.

    So I'm staying the course with my current allocation and have begun buying on dips. Likely I'll be early, but I just don't see better investments over the longer term.

    Sep 24 1:36 PM | Link | 11 Comments
  • Cat Falls, Rate Hike Off Indefinitely?

    My short suggestion from this winter, Caterpillar (NYSE:CAT), has announced more bad news - as I predicted. Unfortunately for me, I took a small loss on the short as I was a couple of months too early, and I'm not really a short-seller type. What I have done, though, as quietly mentioned, was trade back into Treasuries after rates backed up from their record lows on the long-term bonds (NYSEARCA:TLT). With another weak report on durable goods this morning, it is now looking as though the strong unemployment claims data is an outlier. Except for healthcare, I think that all segments of the economy are now under a cloud and that short-to-intermediate term Treasuries are more likely than not to trend lower in yield, and probably long rates as well. Getting back to stocks, it is during times of fear of a recession, or the reality thereof, that the overvaluation I have been writing about for years, going back to my blogging days, starts to matter. If we get a liquidation event as in 1987 or (heavens forbid) 2008, no equity is safe. Short of that, I'm looking at Gilead (NASDAQ:GILD) and AbbVie (NYSE:ABBV) as relative safe havens, i.e. that they should provide alpha if the market (NYSEARCA:SPY) is entering a bear phase from here; the economic issues continue to be centered far from biotech, which continues to innovate.

    I also think that smartphones are almost necessities now and begin to have the safety factor of household staples, but this applies to Apple (NASDAQ:AAPL) only and no other manufacturer.

    More on this topic later.

    Sep 24 9:36 AM | Link | 4 Comments
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