Monday, January 31, 2005

Correction Over?

My gut feeling tells me that this correction is over. The voter turnout in Iraq and the OPEC news eliminated a lot of uncertainty in this market. Of course there's still the action by the Fed, but that's news the market can take in stride. Lots of companies will be reporting Q4 numbers and I believe they will be fine. I still hear a lot of pessimism in this market (that's a good thing).

There's just no let up on the bad news in the Pharma sector. Wyeth takes a beating for missing it's numbers and more potential adverse data on Pfizer's COX II drugs? This sector is so tempting right now from a valuation stand point. I'll start picking through the rubles...

Other than the Pharma sector, everything else did ok today. A good start to the week.

Friday, January 28, 2005

Give Merck a Break...

I'm starting to feel sorry for Merck. They just lost a patent dispute with their Fosamax drug. The patent will now expire in 2008 instead of 2018, that hurts big time. Just when you thought things couldn't get any worse, it does. Fortunately, I don't have any Merck.

Not really surprising that the market is in the gloom and doom mood today. Lots of potential market moving news over the weekend. The elections in Iraq, etc... I guess a lot of people want to enter the weekend flat.

I'm starting to take a closer look at Amgen's numbers. Their 0.02 miss wasn't that bad. The top line number was fine, but their expenses increased more than expected. They are also buying backing back a bunch of stock. There's a lot of uncertainty for Amgen in 2005, but this is where you do your research and look beyond 2005. I may add to my Amgen position.

Thursday, January 27, 2005

Dead Cat Bounce?

I'm actually starting to get bullish. I went to a CANSLIM investors meeting yesterday and the majority of the people there were bearish. They all had very high cash positions. On CNBC, they talk about people not putting money into mutual funds. So looks like there's plenty of money sitting on the sidelines. This will be fuel to the markets. This just looks like a normal correction to me, we'll probably test the 200 day moving average and maybe even retest then head higher. I'm still 90%+ invested in this market.

All in all, the Q4 numbers look pretty good. Not many big blow ups except for eBay. People really liked JNJ's numbers. Amgen reported today and missed by 0.02... I'll have to take a closer look at that one. At first glance, Microsoft's numbers look good. I'm just waiting for the other companies in my portfolio to report before making any adjustments.

Summary on my current holdings:

  • Fisher Scientific (FSH) - continues to act very well after breaking out of a year long base. Waiting for Q4 numbers and additional accretive acquisitions.
  • Johnson & Johnson (JNJ) - reported nice earnings and chart looks great.
  • Genzyme (GENZ) - reported strong preliminary Q4 earnings and another good looking chart.
  • Las Vegas Sands (LVS) - waiting for Q4 earnings. Should be good since all other gaming stocks reported strong Q4 numbers.
  • Invitrogen (IVGN) - stated that they will beat Q4 estimates. Looking for more accretive acquisitions.
  • Biogen Idec (BIIB) - should report decent numbers. All eyes will be on the initial demand for their new MS drug (Tysabri).
  • CYTYC (CYTC) - looking for inline numbers. A steady grower. Will be interesting to see how this stock reacts when Merck files for their HPV vaccine at year end.
  • Qiagen (QGENF) - this is a play on the future of molecular diagnostics. They dominate their niche (DNA purification kits).
  • Pfizer (PFE) - I'm not too confident in this one. This is a weak hold right now.
  • Genentech (DNA) - strong steady grower. Maybe a bit expensive (P/E wise), but you have to pay up for growth (expected 30%+ EPS growth for the next few of years).
  • Microsoft (MSFT) - a strong hold. It's a big mature company, so I'm not expecting miracles - just slow steady growth with a growing dividend.
  • Boston Scientific (BSX) - A strong hold. Looks like JNJ finally has their stent production resolved. BSX is starting to lose some market share to JNJ. I like their acquisition of Advanced Bionics.

Friday, January 21, 2005

Why So Gloomy?

I happen to have today off and I was able to catch some CNBC. Lots of gloomy talk about the market. Everyone is so negative; this is usually a good sign for the market. The market will turn around when you least expect it. Again, Fisher Scientific (FSH) holds up well in a down market and closes up. The daily and weekly charts look great; it just broke out of a long trading range. I'm not a market technician, but I do put some weight on the charts.

Well, enjoy the weekend. I'll be digging out from a snow storm.

Thursday, January 20, 2005

Looking for Strength

Well, it's another down day. Not exactly a surprise with the report from EBay last night. Like I said, this is the time to look for stocks that are holding up well. Most of my holdings were caught up in this decline, but one particular issue held up pretty well. Fisher Scientific (FSH) closed at $63.46 +0.98. Not only did it hold up well, but went up on higher than average volume. Hmm.. something going on that I don't know about???

Anyways, it's time to get ready for another season of the Apprentice.

Wednesday, January 19, 2005

A Red Day

What a difference a day makes! Just about everyone of my holdings is in the red. Looks like tomorrow is shaping up to be another down day with Ebay's miss. But this is just a little storm and we'll get over it. A company like Ebay was priced to perfection, that's why I tend to avoid company's with very high P/E's. If they miss, it's over... Ebay's going to go down more - the institutions will get any chance to unload. I like to use these corrections to scan for possible new buys. Stocks that hold up well in a correction tend to be the new leaders. I'm glad I have a little cash on hand.

Tuesday, January 18, 2005

A Green Day

When I took a peek at the market this morning, I thought I was going to be a down day. Oil prices was spiking and there was no momentum in the market. I checked the market again around noon and my portfolio was all green. It's nice to see something like that. Pessimism was really building up and maybe that was just what the market needed. The market looks good to me, breakouts to new highs are starting to take place.

Apple madness! I went with my sister to the Apple store over the weekend. She wanted to get an Apple Shuffle. Unfortunately it was not on sale yet, but it was a mad house. The store was jam packed and people just buying everything... I may nibble at some Apple if there's pull back.

Friday, January 14, 2005

Picks and Shovels

Well, the market finally closed with a nice gain. Overall it was a nice week. The JP Morgan Healthcare conference generated some positive news, which gave a boost to several of my holdings.

The are lots of consolidation going on in the picks and shovel companies (they supply kits and reagents for researchers). The picks and shovel companies in my portfolio are Invitrogen, Fisher Scientific and Qiagen. Both Invitrogen and Fisher Scientific have made nice moves over the past year, but Qiagen has not done much. Lots of companies are trying to enter Qiagen's turf (they make kits used to purify DNA, RNA and proteins). Qiagen dominates this niche and I really don't see how their rivals will gain much share. Scientist are a finicky bunch. If they use a reagent or kit and it works well for them; they are very reluctant switch to a cheaper rival. They are also moving into the molecular diagnostics arena. I think this maybe the year for Qiagen to make it's move. Q4 was a very strong quarter for these companies (Invitrogen indicated Q4 was above estimates and Fisher Scientific reiterated their numbers).

The markets will be closed on Monday. A well needed break from the market action.

Thursday, January 13, 2005

Keeping Track of the Market

I wish I had more time to keep track of the daily market action. Unfortunately, there's a thing called work. The only time I get a chance to check the markets is in the morning and lunch time. I'm tempted to get one of those blackberry's so I can keep tabs on the market.

So my prediction of a mini rally did not pan out. I guess the markets need to digest its gains from the November-December rally. I haven't initiated any new positions this year except for an IRA contribution to a mutual fund.

If you are serious about investing in the biotech / pharma sector, you really need to have access to some good research material. My favorite publications are BioCentury and BioWorld.

We'll see what tomorrow brings. It's a new day and a fresh start...

Wednesday, January 12, 2005

Don't Follow My Lead

In my first post, I listed my current holdings in my portfolio. Definitely do your research and don't buy the stocks just because it's in my portfolio. Believe me, I've been wrong many times. Let me think of my worst loss... umm.. it was at the top of the internet bubble in early 2000. I picked up a few shares of JDS Uniphase around $150 and it promptly went up to $200. And guess what? It went down, down and down in the grinding bear market. I finally bailed out at $10... ouch! Again fortunately, I did not have much money to invest during that time because I had tuition bills coming due. That loss taught me so much!

Today was a good day for the market. Market opened weak and came back strong - that's exactly what you want to see in a healthy market. Intel reported good numbers in the morning and this evening Apple just blew away the numbers. The IPods are just selling like crazy. I saw some pictures of their new $99 IPod and the Mac mini. I'm not too crazy about them. Although I can't wait for the Sony PSP (I want one now!!).

I think there's momentum in the market for a mini rally. We'll see...

Tuesday, January 11, 2005

First Entry / My Investment Strategy

My investment approach has evolved over time. I first started investing in stocks in college. I bought based on hype. A bad strategy! Fortunately, I didn't have much money to invest in those days. I actually remember my first stock purchase... It was a biotech company called Xoma and the company was expected to win FDA approval for a drug to treat septic shock. I bought some shares based on the hype. And guess what? The drug got rejected by the FDA.

Then I started to read some books such as One Up On Wall Street by Peter Lynch. The book that really influenced my investing style is: How to Make Money in Stocks by William O'Neil. He introduced a set of rules to follow and it has worked fairly well out over the years. I use his strategy for my initial screens, but I tend to hold the stocks for the long term. I find it amusing how people dismiss the buy and hold philosophy. As long as the company generates the sales and earnings, hold on and enjoy the ride.

I primarily invest in biotech and pharma stocks. I work in the biotech sector, so I feel like I have a little edge (the Peter Lynch philosophy). Anyways, my current holdings are: Amgen, Biogen, Genentech, Genzyme, Qiagen, Invitrogen, Fisher Scientific, Johnson&Johnson, Boston Scientific, Pfizer, Microsoft, Cytyc, QQQQ, and Las Vegas Sands. I know, you're wondering how does Las Vegas Sands fits in this picture?? I managed to get some shares at the ipo price and decided to hang on to it.

This week is the JP Morgan healthcare conference. Lots of companies making major announcements in this conference. Invitrogen announced the Zymed acquisition (good move) and Genzyme increased guidance. But Genentech sold off on the Avastin numbers.

Oh well, you win some and you lose some...