I've always hated biotech stocks. You can do the research and you'll see that about 80% of them do not have real income. All they do is prey on people's greed and hope that one day their miracle drug will be approved and be profitable. For the last 5 years, this thesis has worked and countless investors have become millionaires. But underneath the surface, it shows a different story.
20% of biotech companies ever manage to get a drug approved and of the 20%, about 5% really get profitable. BUT the idiots on WS and the analysts keep setting strong BUY ratings for these highly illiquid companies that the sheep keep falling for their lies over and over again. The biotech short has been a difficult short. It's because so many people keep buying the dips over the last few years. Only now have we really seen a big sell off in big names. We identified the pattern above around 360 and even sent out a premium trade alert to think about that level. Those who took it, though extremely brave, made at least $50 a share after several weeks or $30 a contract via selling $360 Calls and other strategies. It was by no means an easy short because this sector gets bought up so quickly by people expecting BTFD is back. Will BTFD ever come back? Maybe. But I was never part of that brazen bunch promoting the BTFD theory. But for now, if you've been burned, I hope you'll smarten up and get schooled. Peace out homies. G
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Multiple AuthorsTraders from Equity Sense will be writing on this blog on positions and other market-related things. Archives
May 2018
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