SquidpopBiotechs in general can be a difficult investment. We...

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Biotechs in general can be a difficult investment.

We usually all try and invest within our "circle of competence" based as Warren Buffett says on the area you understand and hopefully perhaps have some advantage over other investors.

Even with a medical background, lots of Biotechs can sound fantastic on fundamentals - but it is never that easy. These is some security in the bigger biotechs like CSL, Cochlear and Resmed, but for many biotechs it is trying to establish their market and product.

Pharmaceuticals are even more difficult especially when they are undergoing drug trials. That can make or break them - (see story of Metabolic).

Chemgenix was always going to have some risk, as the FDA was the first peer review of the trial data, and as became apparent there were some trial conduct issues.

If you are going to enter shares like CXS you need to take a leaf from the guys who do lots of TA, and set a stop loss, and not get too emotionally sold on the story and share - and that is easy to do especially when you look at company announcements. The TA guys go one better and buy it when it starts to move, so they dont get left holding the share with money tied up while it is staying level or even falling.

To get a feel of a good biotech that is still working its way up - read the story of CST. It is nwo the only biotech I hold (having sold CSL as I wasnt so comfortable with the class action now that the Mayo Clinic is involved).

Plenty on CST on:

http://quantiferon.blogspot.com/

and

http://www.forrestthinks.blogspot.com/