Yes, you can invest in biotechs without the “fear factor”.
We interviewed SA authors and seasoned biotech investors Terry Chrisomalis and Jerome Verony, who explain how they and their Marketplace communities do it.
Read to the end to find out about their current top ideas: CNAT (for Terry) and MRNS (for Jerome).
There is a widespread perception – perhaps more aptly put, a misperception – that investing in the biotech sector is “scary.” Sure, like anything, if you don’t know what you’re doing, there’s going to be some fear involved. However, if you do choose to wade into biotechs’ murky waters, be sure to diversify, and know your limitations.
That’s some sage advice from two Seeking Alpha authors who focus on biotech and helping members of their private investing communities on Marketplace to make better-informed decisions in the space: Terry Chrisomalis, who runs Biotech Analysis Central, and Jerome Verony, who heads up Second-Level Investing. Both are newer authors to the Marketplace, but they are veteran biotech investors. Terry is a buy-and-hold biotech investor, and Jerome is a prolific SA Pro author who’s made some highly successful calls, including Achaogen (AKAO) and Marinus Pharmaceuticals (MRNS), which he discusses in more detail below.
Terry and Jerome share their take on the biggest events in biotech in 2017, their outlook for 2018 (hint: more M&A, a focus on tax reform and its impact on the sector, and potentially pending patent cliffs), and their approach to investing in biotechs – especially the good ones – without any fear (thanks, John Lennon).
Seeking Alpha: Barron’s published this article on December 11th with the headline: “Why biotechs are just too darn scary!” You don’t find biotechs “scary,” otherwise you probably wouldn’t invest in the space. What do you know that you think other investors should know about biotechs, and how do you help your members overcome the “fear factor?”
Terry Chrisomalis: Biotech investing is a scary place to be, but it doesn’t have to be. There are ways you can avoid from completely failing when investing in this space. First, one should diversify into multiple biotech stocks. There is no set goal on how many you should split into, but I would recommend at least four or more. Remember, all you need is one to hit to make it big.