This was an excellent thread that first appeared in happier...

This was an excellent thread that first appeared in happier times. We were bubbling with excitement waiting for blast off into a clear blue sky. @gerzensee was responsible for many of getting in touch with our amygdala for the first time and that original post was much appreciated judging by the large number of thumbs up and lightbulbs.

Since the original post the share price has more than halved and there are many (including me) who are sitting on large paper losses. We have held those shares (I’ve even added on the way down, increasing my loss) for I expect two potential reasons.

1. We have made a rational decision based on our long term view of the company, accepting the volatility that history has taught us is almost guaranteed with this company and this sector. Or
2. We are irrationally clinging on, driven by a refusal to acknowledge that we made a poor investment decision (judging by outcome at this time) and not being prepared to crystallise that loss (face reality).

There has been a build up of the short position, with that it seems an increase in posts on this forum that are quite forcefully telling us it’s number 2 and it’s time to “smell the coffee” so to speak. I believe it was @Cato who made the comment “the first loss is the smallest loss” when he told us that he had sold up as soon as we had bad news. However, IMO, @Cato being an accomplished Trader was only following his trading strategy that I am sure has served him well over the years and therefore was acting rationally by following it. So this action was firmly in the first category.

We are awaiting the announcement on the CLBP, it is overdue. On another thread “MSB short position reporting” I did speculate whether this build up, which we had seen before was with the benefit of “inside” information. Was I being irrational? I don’t know, but I could not understand why anyone would have gambled on the FDA decision to ignore their expert panel recommendation. Then of course we had the missing of the primary endpoint on Heart.

On both these major corrections, I would be lying if I did not consider that I was in 2 land at times. It was this thought that prompted me to post this.

I did not sell, because I believe that the data that has been presented has confirmed my judgement that the long term prospects of Mesoblast as a company with a platform therapy offering and a share price to match will emerge. It is my judgement that srGVHD will be approved and extended to adults in time. It is my judgement that Heart will result in a major partnership and will revolutionise how heart patients are treated. It is my judgement that as the data from this trial, CLBP and ARDS and the benefits of treating inflammation are fully understood, then not only will “Mesoblast” take its place in these area (perhaps as a combination treatment) when the “sweet spot” dictates, but other conditions will also make use of this.
My concern is that with our current share price we might be taken over on the cheap.

I say this now because I am also acknowledging that while cash flow is an issue it will be dealt with, and if CLBP misses its primary endpoint, it does not change the exciting results from Heart and the greater understanding that we have on what we can and cannot do, which we did not have when these trials started.

So if we get some bad news in the next few weeks, or if the shorters are trying to panic us into that thought now, I will not be selling. This is just the volatility I was prepared for when I made my investment.

If the careful analysis of the heart data comes out and joint venture talks are concluded and it shows that the company does not have a therapy with a clear pathway to market then I will sell.

Shorting as @bedger (and who doesn’t follow him?) I believe said was a perfectly reasonable trading strategy but it does come with its own “psychology of trading” which it appears includes trying to turn a 1’s into 2’s with posts on this forum and questionable “broker” or “financial journalist “ reports.

As everyone says DYOR, but until the data says otherwise my view on any up and coming news is my reason for investing has been strengthened over the past few weeks and that remains unchanged and I will remain very firmly in the 1 whatever the price it may fall to in the next month or so. I don’t trade as I don’t want to be caught out on the upside.

regards
Yelrom