I wonder if anyone is still here.
I am emerging from a month of nonstop, mind-numbing class and travel. All I want to do is sleep and realize with glee every half-hour or so that I'm not in class. It feels good.
Jim Cramer's Mad Money has been on TV the last few nights, as it is every night, and I've been home and able to watch it. But right now I could care less. I don't want to watch it. I don't want to hear about stocks. I don't want to hear about the economy. I don't want to hear about oil, or China, or the housing bubble for the umpteenth time.
It's OK, though. I've been in this frame of mind before - enough times now to start to recognize it. Unlike ten years ago when I used a theatre class project to symbolically burn posters and memorabilia from a play I had just produced, so worn out was I with caring about it, there will be no bonfire of textbooks in the backyard's fire pit. I did that once, too - burn a Physics book. Should have saved it, for the third time I took the class some 7 or 8 years later.
No, this time I recognize this for what it is: a break in an intense relationship with something I do care deeply about. A hiatus. A shifting. Not an abandonment. I will have my nose in Bill O'Neil's book again soon enough, and that subscription renewal to the Journal is already sitting sealed in an envelope. But I also recognize that I will not be a stock analyst, or a financial genius, or a lawyer by the time I'm 35. And that's fine. Check a few more things off the damn list.
I still watch Squawk Box in the morning, but am only half-interested in the news. It is more fascinating right now to watch the dynamic between Becky Quick and David Faber. I think that Becky feels like she has something to prove - like she's nervous about being at the table with the big kids. David is smart, charming and at ease, and seemingly always finds an angle to something that puts Becky on the defense. When this happens - which is often - the rest of the table, including the guest host (who is a man 99% of the time) devolves into a rowdy boy's club of sorts. Even when David's not there, Becky speaks so quickly and scripted that she finishes her speech, takes a breath, and the dead air swallows her whole. So I feel sorry for Becky, because she's probably pretty good at what she does and pretty smart. But she comes off as desperate, because the people around are just, well, better.
Maybe I'm sexist. But I don't think so. Maria Bartiromo could kick my ass.
Happy summer, everyone.
Wednesday, June 29, 2005
Friday, June 17, 2005
The FDA Should be Dismantled to Encourage Economic Growth
Well it has been a while since I've had a chance to post. Most of the delay was caused by a class I am taking called Securities Analysis. It has been a good experience, and I have learned a lot about valuing companies and using current events to estimate a company's present value, and hence share price.
I did two projects and presented the results to the class. The first project was about Pfizer. They are a large drug company that manufacture a number of well-known drugs including Viagra. The second project was to summarize and report on the Biotech industry and then value Genentech, a biotech company in San Francisco.
One of the interesting things I came across as I put together these reports was the amount of reliance these companies, in both the Pharmaceutical industry and Biotech industry, have on the Federal Government for their fortunes. If a drug is approved by the FDA, it has the potential to bring in revenues of more than $1 billion dollars a year!
While most people would say that the FDA is necessary to prevent harm to be caused by bad medicine, I would propose a revision to this line of thinking. I think the the FDA should be dismantled and drug companies themselves should be responsible for the quality and effectiveness of their drugs. This would cut out, on average, 2 years of testing time in the development life cycle of an average drug. Just think how many people suffer because of this archaic bureaucracy.
I know what you're thinking: "James, are you mad? If the FDA doesn't put its stamp of approval on the drug, then we would be at tremendous risk for harmful side effects, not to mention the potential for drug companies to sell us snake oil at high prices!"
Let me address issue. Drug companies like making money. That is why they produce drugs (or phramaceuticals if you prefer). Every time a drug is found to be defficient or having unknown side effects, they lose a tremendous amount of money by recalling that drug and they are liable for the inevitable litigation. It does not make sense, economically or financially, for a drug company to release a medicine that it knows to cause harm. Their reputation would be damaged, and so would their profits. One bad drug could basically eliminate a company. Just look at the recent news about Biogen Idec.
I like the idea of an "underwriter" putting their seal of approval on the medicine. Right now, another industry, consumer electronics willfully submit their products to underwriters to test and garauntee. Without that seal, people tend to be wary of the product. Moreover, if a product fails, say a TV explodes under normal usage, the underwriter covers a portion of the liability.
This would speed up the process of bringing the drug to market and thus save lives or at least increase the quality of life for millions of people. In turn, this would encourage futher research and potentially encourage economic growth.
A great article by investigative reporter John Stossel goes into some detail on the subject. For the most part I agree with him. Read the article (he also wrote a follow up here) and let me know your opinion.
I did two projects and presented the results to the class. The first project was about Pfizer. They are a large drug company that manufacture a number of well-known drugs including Viagra. The second project was to summarize and report on the Biotech industry and then value Genentech, a biotech company in San Francisco.
One of the interesting things I came across as I put together these reports was the amount of reliance these companies, in both the Pharmaceutical industry and Biotech industry, have on the Federal Government for their fortunes. If a drug is approved by the FDA, it has the potential to bring in revenues of more than $1 billion dollars a year!
While most people would say that the FDA is necessary to prevent harm to be caused by bad medicine, I would propose a revision to this line of thinking. I think the the FDA should be dismantled and drug companies themselves should be responsible for the quality and effectiveness of their drugs. This would cut out, on average, 2 years of testing time in the development life cycle of an average drug. Just think how many people suffer because of this archaic bureaucracy.
I know what you're thinking: "James, are you mad? If the FDA doesn't put its stamp of approval on the drug, then we would be at tremendous risk for harmful side effects, not to mention the potential for drug companies to sell us snake oil at high prices!"
Let me address issue. Drug companies like making money. That is why they produce drugs (or phramaceuticals if you prefer). Every time a drug is found to be defficient or having unknown side effects, they lose a tremendous amount of money by recalling that drug and they are liable for the inevitable litigation. It does not make sense, economically or financially, for a drug company to release a medicine that it knows to cause harm. Their reputation would be damaged, and so would their profits. One bad drug could basically eliminate a company. Just look at the recent news about Biogen Idec.
I like the idea of an "underwriter" putting their seal of approval on the medicine. Right now, another industry, consumer electronics willfully submit their products to underwriters to test and garauntee. Without that seal, people tend to be wary of the product. Moreover, if a product fails, say a TV explodes under normal usage, the underwriter covers a portion of the liability.
This would speed up the process of bringing the drug to market and thus save lives or at least increase the quality of life for millions of people. In turn, this would encourage futher research and potentially encourage economic growth.
A great article by investigative reporter John Stossel goes into some detail on the subject. For the most part I agree with him. Read the article (he also wrote a follow up here) and let me know your opinion.
Wednesday, June 01, 2005
The Contest Is Over: Congratulations Agentdisco!
A lot of blood and sweat was lost over the last 3 weeks during the Cashtalk Stockmarket Contest. After the dust settled, Agentdisco is a resounding winner with over $117k of equity! Thanks everyone for playing. We'll be planning another contest for sometime in the future. Keep checking Cashtalk for details.
Also, if you are interested you can continue to follow your portfolios from this game, you just can't trade anymore.
Also, if you are interested you can continue to follow your portfolios from this game, you just can't trade anymore.
Calpine, take me away...
If anyone's been following the Investopedia game the last couple of weeks, you'll see that I bought and held shares of Calpine (CPN). To be honest, I didn't even know what they did when I bought the stock - it was purely a speculative play based on a news report on CNBC. The perfect example of an amateur-hour strategy everyone always advises against.
But I got a little bit lucky, and CPN's gains pretty much drove my portfolio higher all by themselves. Even after an initial bump last week, they shot up another 10% this Tuesday. I couldn't believe it. I've been busy and haven't had time to check into why they moved again, but today I found this article on smartmoney.com that explains everything very well.
It's a fairly short article, and an excellent example of some of the criteria analysts use to value a company.
But I got a little bit lucky, and CPN's gains pretty much drove my portfolio higher all by themselves. Even after an initial bump last week, they shot up another 10% this Tuesday. I couldn't believe it. I've been busy and haven't had time to check into why they moved again, but today I found this article on smartmoney.com that explains everything very well.
It's a fairly short article, and an excellent example of some of the criteria analysts use to value a company.
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