Cramer is merely pointing out the obvious........Pricing fears lead to panic selling. When investors realize this has been overdone , buyers will come back into biotech. Regn is an amazing company with a strong pipeline. Im tempted to add to REGN today, but I'm thinking tomorrow might be better. Hard to decide so close to Xmas.
its obviously from the Abbvie, ESRX deal. hurts the whole sector ( in the short term). "sell the sector" sentiment.
I might add that there may be some liquidity issues with those ETF's. So in effect in the short run a few people have undue influence on a group of stocks. This can also happen on the upside giving people a false sense of security. Long term revenues leading to earnings rule the day.
Yup, as soon as the hot/dumb money is out, and the MM's have picked their pockets, we'll be back to business as usual. The play here is to be long term, don't sweat the day to day. We are after our MRK valuation, and have the assets to get there.
Did you not write this on December 22, 2014? How timely: for Dec. 23, 2014. Look at it!
The Dow is over 18,000 points. Up over 100 points today on December 23, 2014. and biotech is struggling. This biotech "bump in the road" could be more than such. We could have the next "David" to overwhelm these Goliaths, with the massive ones being focused upon. No matter how great one is, he/they/it, are not indispensable and not immune to inauspicious circumstances. This "dip" has nothing to do with the end of the year window dressing. This is what should be in the mutual funds prospectus for the end of the year, but this is working in reverse. Why would they churn now and take a tax hit so close to the conclusion of this year.
There are other underlying aspects to biotech and this is just a harbinger of the future of the stock and biotech markets. Even though Regn has seemingly a sexy pipeline, the real-deal numbers could render them impotent in the future.
Same old story, when momentum players get spooked they sell in a flash. Thinking is that the Gilead issues will spread to the rest of the industry. It is not individuals selling REGN, but hedge funds selling the ETF's in which REGN is a big percent. Find one of those ETF's and chart it against CELG, BIIB, AMGN, GILD & REGN and they pretty much all track.
Actually he said to lighten up until you know if the Gilead issues spread. The problem with these stocks is that the few momentum players here can kill them quick and ETF's are poison because you cannot separate the wheat from the chaff. I actually sold some, taking some real good profits. The run up in both celg & regn had gotten my % of portfolio way beyond what I want it to be. Trimmed a little around the edges.
Trevor: The aspect of window dressing is that the fund managers want to place certain outperforming stocks into their prospectus in order to show that they possess them. Buy selling now they will get hit will tax ramifications in the near term. So this is not the reason. There are other underlying aspects. Many of the other biotechs are dropping also. These things were overly bloated and overpriced many months prior and are now losing their cache/vogue/appeal.
Probably some end of year stuff too, but the ESRX, CVS concern/scam is what's making all the press/social media etc. "end of biotech, no ability to price, no profits", etc., etc., same story, different day. PBM's and exclusives have been around a long time, this will pass, eventually.
U may be partly right although the deal/price competition story cannot affect the whole biotech industry! Me thinks there's some consolidation going on.