Tuesday, November 08, 2005

Bad Analyst Call / Condo?

Yesterday an analyst from Bear Stearns downgraded Genzyme (GENZ) because of reimbursement concerns for Synvisc, which is used to treat osteoarthritis for the knee. The stock fell ~ 4.5% on this downgrade. This was definitely an over reaction by investors and simply an excuse to take profits. Synvisc makes up only ~8 % of total revenues so any reimbursement reduction would have a minimal impact on earnings. This morning Genzyme announced that the Medicare reimbursement rate for Synvisc would remain unchanged from the prior year. The stock recovered 1.8% on this news. This analyst basically blew the call and was simply wrong. Analysts are often lagging indicators; they usually upgrade a stock after it has made a huge increase or downgrade a stock after a steep decline. They follow the crowd and there's very little value added in their analysis. I enjoy reading analyst reports, but I do not make trading decisions based on their opinions. I just wish analyst would just own up to their mistakes...
Note: I have a position in Genzyme.

Ohh... I finally received the condo docs today! It must close to 100 pages a legal mumbo jumbo and I'm supposed to decipher it. Fortunately I know a lawyer, who deals with real estate law so I'll probably give her a call and hopefully help me decipher some of this stuff. So I have 10 days to decide. It's really a tough decision, real estate prices are falling and there are some good values starting to pop up. hmm... ???

4 Comments:

At November 08, 2005, Anonymous Jane Dough said...

I purchased my current house in Spring 2004 and at the time the pressure was interest rates rising.

I have noticed that a lot more inventory is hitting the market now, but when I look at the prices vrs what was available 1.5 years ago - they are still higher.

If the condo is in a good location, you can comfortably afford the cost, and the condo association is fiscally sound - go for it.

Trying to time a market almost never works (as I am sure you know from your stock investment).

 
At November 09, 2005, Blogger Money Turtle said...

I'm going to meet with the sales rep this weekend to clear up any questions I may have. As of this minute, I'm leaning towards it, but we'll see after the meeting.

 
At November 10, 2005, Blogger mmb said...

Make sure you meet with your RE lawyer first to go over the papers before the 10 days are over. As for prices falling, if you are buying to live in it for at least a few years the bubble shouldn't affect you one way or the other. It's no different than the stock market really -- or anything else in life -- give it enough time and things will turn around. Good luck!

 
At November 10, 2005, Blogger Money Turtle said...

Yep, I definitely plan to see a real estate lawyer. Thank's for the comments: Jane and MMB - It definitely helps in the decision process.

 

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