Biotech / pharmaceuticals

Reaper

Amarone wrote: »

Can I ask what a SMA is Ryan

I'm not Ryan but I can tell you he means a 200 day simple moving average.

Sometimes it can be helpful to illustrate whether the momentum is up or down. He is suggesting the mood may change and it could be the sign of a change of direction.

Voyager2002

Amarone wrote: »

the funds continue to perform well in a sector that , although volatile , should continue to perform due to an ageing population's need. Patents appear the big stumbling block as once they run out it's an open market and getting the drugs through approval is hit and miss.

There is a fund that invests in the Indian companies that manufacture generic ("off-patent") drugs. Following the logic of your analysis, that might be a sector for you to investigate.

BrockStoker

Ryan_Futuristics wrote: »

If a sector drops by 80%, you need it to gain 400% back just to break even

I don't understand this at all. It seems counter intuitive to me. Could someone please elaborate? How would this look like on a graph?

eskbanker

BrockStoker wrote: »

I don't understand this at all. It seems counter intuitive to me. Could someone please elaborate? How would this look like on a graph?

If you start with a pot valued at £1000 and it loses 80% then you're down to £200. If that £200 gains 400% (of the now reduced value of the pot) it would be back to the £1000 again.

JohnRo

BrockStoker wrote: »

I don't understand this at all. It seems counter intuitive to me. Could someone please elaborate? How would this look like on a graph?

Think of 100 dropping to 20, that's an 80% drop

so the 20 you now have left, how many 20's do you need to add to get back to the original 100. Bearing in mind each added 20 is +100%

BrockStoker

Thanks John. Looking at it that way it makes sense to me.

Edit: Thank you also eskbanker. Somehow I missed your post completely before.

Ryan_Futuristics

Amarone wrote: »

Hmm , Ryan you speak some sense there , I realise I've missed the boat in Biotech but the funds continue to perform well in a sector that , although volatile , should continue to perform due to an ageing population's need. Patents appear the big stumbling block as once they run out it's an open market and getting the drugs through approval is hit and miss.

Can I ask what a SMA is Ryan?

If I did go for one of the Axa funds I'm unsure which as the holdings appear similar?

Or may take risky punt in one UK biotech or Pharamceutical for a couple of grand one off payment.

Thanks for the advice , it is appreciated.

I'd certainly liken BioTech today to the 90s tech boom .. Great sector to be in, but investor madness can push prices ludicrously high, and when they decide they're too high, there can still be a clamber for the exits

Then again, prices had climbed to even more ludicrous levels prior to the tech crash, so there could still be great profits (just at the expense of greater risk)

Richard Driehaus (father of momentum investing) famously said: "far more money is made buying high and selling at even higher prices" ... If you were to use the SMA 200 to time when to exit the market, you'd have to hope the sector doesn't crash or correct in the next 5 months or so to break even - but I suspect a correction as we've recently seen in Roche is overdue



Personally, I think UK/European biotech is at better valuations than US, but still on the expensive side

You get 10% exposure to biotech through a FTSE 100 tracker, or almost 30% through Woodford Equity Income (with a manager who has a good track record of selling positions when they get too expensive)

planteria

Ryan_Futuristics wrote: »

You get 10% exposure to biotech through a FTSE 100 tracker, or almost 30% through Woodford Equity Income (with a manager who has a good track record of selling positions when they get too expensive)

that is interesting Ryan. do you have info that breaks that down to hand? a portion of AstraZeneca, GSK etc?

Ryan_Futuristics

planteria wrote: »

that is interesting Ryan. do you have info that breaks that down to hand? a portion of AstraZeneca, GSK etc?

If you mean for the Woodford fund, this is what it launched with - or you can get an upto date portfolio if you register on their website

Position
Company Sector Weighting
1 AstraZeneca Healthcare 8.3%
2 GlaxoSmithKline Healthcare 7.1%
3 British American Tobacco Consumer Goods 6.2%
4 BT Telecommunications 6%
5 Imperial Tobacco Consumer Goods 5.3%
6 Roche Healthcare 3.9%
7 Imperial Innovations Financials 3.6%
8 Reynolds American Consumer Goods 3.6%
9 Rolls-Royce Industrials 3.5%
10 Capita Industrials 3.4%
11 Allied Minds Financials 2.9%
12 BAE Systems Industrials 2.9%
13 HSBC Financials 2.8%
14 Sanofi Healthcare 2.3%
15 Legal & General Financials 2.1%
16 Novartis Healthcare 2%
17 Centrica Utilities 2%
18 AA Consumer Services 1.9%
19 SSE Utilities 1.8%
20 Reckitt Benckiser Consumer Goods 1.8%
21 Philip Morris International Consumer Goods 1.8%
22 Prothena Healthcare 1.7%
23 Next Consumer Services 1.7%
24 Altria Consumer Goods 1.3%
25 Smith & Nephew Healthcare 1.3%
26 BTG Healthcare 1.2%
27 Provident Financial Financials 1.1%
28 Drax Utilities 1.1%
29 Alkermes Healthcare 1%
30 Gagfah Financials 1%
31 G4S Industrials 0.97%
32 RM2 International Industrials 0.93%
33 Redde Financials 0.9%
34 Utilitywise Industrials 0.62%
35 Serco Industrials 0.59%
36 Meggitt Industrials 0.59%
37 Lancashire Financials 0.58%
38 Velocys Oil & Gas 0.55%
39 e-Therapeutics Healthcare 0.54%
40 Vernalis Healthcare 0.49%
41 ReNeuron Healthcare 0.48%
42 Cobham Industrials 0.48%
43 Burford Capital Financials 0.44%
44 Catlin Financials 0.43%
45 Benchmark Healthcare 0.43%
46 Amlin Financials 0.43%
47 4D Pharma Healthcare 0.43%
48 Oxford Pharmascience Healthcare 0.35%
49 Revolymer Basic Materials 0.31%
50 Hiscox Financials 0.31%
51 Beazley Financials 0.29%
52 Gigaclear Telecommunications 0.29%
53 Paypoint Industrials 0.25%
54 Homeserve Industrials 0.09%
55 Retroscreen Virology Healthcare 0.09%
56 Xeros Industrials 0.07%
57 NetScientific Healthcare 0.05%
58 IP Financials 0.04%
59 Circassia Healthcare 0.03%
60 Stobart Industrials 0.03%
61 Cranswick Consumer Goods

http://www.fool.co.uk/investing/2014/07/14/neil-woodfords-new-portfolio-in-full/