Selling everything when the market reaches a new all time high

ChesterDog

Chuck, FWIW, pretty sure you took very personally something that was not personal at all.

He didn't call you anything at all, even though you interpreted it that way.

Oh !!!!!!. Now I have contributed to the nonsense as well.

Pincher

I was told once that it's bad manners to talk about money.
That was when I positively had no money.

Looking forward to the day when I am so rich I don't need to talk to rude people who talk about money all the time.

See, that's how you insult people, without using swear words.

BrockStoker

Ray_Singh-Blue wrote: »

I predict that despite pharmacological breakthroughs, human mortality will remain stubbornly at precisely 100%.

If that's the case, we should all be investing in graveyards, mortuaries, and crematoriums! Healthcare and healthcare property is unlikely to get a boost due to mortality!

Ray_Singh-Blue wrote: »

Advances will result in more treatment years, not less, as patients live longer with more concurrent diseases which previously would have hastened their demise. That care will have to be delivered somewhere. And technically complex care requires a specialised environment for delivery. If anything, I think as healthcare becomes more complex and technical, the demand for premises to deliver it will increase.

I do agree with most of your prognosis here, BUT only in the short/medium term.

Even now though, we are starting to see treatments that are taking pressure off the healthcare system/freeing up beds. For example, in the treatment of HIV/AIDS the condition can be managed with drugs prescribed by a GP. 15 or 20 years ago a patient with HIV/AIDS would be expected to spend weeks or months in hospital. Now they are expected to spend 0 time in hospital for the treatment.

This is what the biotechs are aiming for with treatments for other illnesses, and as the tech advances, sooner or later we will see cures for all the illnesses. I think that point may come sooner than many suspect. Perhaps as soon as 10-15 years, but could be longer.

Granted that complex surgery will still need hospital facilities (at least in the short-medium term), but most surgery is due to illnesses that will become easier to treat as I mentioned above. Innovations in surgery are also starting to have an effect on how long hospital beds are needed, and where it can be done. Less invasive technology will eventually result in patients being operated on in small clinics, with little or no time needed taking up a bed. There is already a trend in this direction with minor surgical procedures.

It's not science fiction any more. We are on the threshold of living in a world more or less free from illness (at least for those with money) where people will live into their 100's (perhaps even longer!), and today's healthcare will seem like butchery in comparison.

To take another example, which I more or less glossed over in my previous post, Ilumina is at the forefront of a revolution with it's new affordable gene sequencing tech. For just $100 a person will soon be able to find out which illnesses they are predisposed to, and armed with that information preventative measures can be taken to prevent (or at least slow the progress of) an illness that would otherwise require complex/lengthy treatment in a hospital.

This is already underway. 49 of the new devices have already been sold: http://www.fool.com/investing/general/2017/01/13/will-2017-be-illuminas-best-year-yet.aspx?source=eptcnnlnk0000002&utm_campaign=article&utm_medium=feed&utm_source=cnnmoney

Granted we may have the tech to identify right now, but many effective treatments are still to be found. Remember, gene sequencing tech is actually quite old tech that is only just now coming of age. The cutting edge technologies of today which could have huge impacts in curing illnesses (nanotechnology springs to mind) are at the stage gene sequencing tech was at 10-15 years ago, but we are developing new technologies at increased rates of pace now, so we could see revolutionary tech feeding through in as little as 5-10 years.

In the short term though, I'm noticing that a lot of R&D is going into age related illness like alzheimers, dementia, and parkinsons, which together probably use up the vast majority of healthcare resources. There's much optimism in the industry that real progress is being made in those areas right now (positive early stage trial results), so I can see real savings in resources in the near term being possible, and the possibility that profits for investors could sky-rocket. As Donald would say "It's not that far off folks"

bowlhead99 wrote: »

Sure, great return, and we always hear about stellar returns from biotech - but biotech is very far from being defensive and its proponents are less vocal when it's tanking

That is true. Whilst I can't speak for other proponents, I sold all my biotech before it tanked the year before last, and then bought back in the dips (taking the opportunity to switch from Axa Framlington to BIOG). So far it's worked out well!

bowlhead99 wrote: »

There is a growing bulge in the ageing population no matter how you look at it. If people don't die of one thing, something else will get them in the end, but meanwhile the extra 20 years they have on this earth due to not dying prematurely of cancer age 75 means they have another 20 years of ailments to treat. That's more beds needed. And then they can go in a care home for their last three years from age 92 before passing on- rather than not needing a care home for three years from age 72 because they were happy looking after themselves as a relative youngster.

I do agree with you over the short-medium term as I mentioned above in reply to Ray, but at some point I think we will see things start to go the other way. Obviously I can't say exactly when that inflection point will be reached, but I do think it's inevitable.

bowlhead99 wrote: »

There's always potential blockbusters just as there are always potential headwinds. I don't currently have a biotech fund but used the biotech growth investment trust (BIOG) for several years. It was somewhere between £2.50 and £3 when I was first on here in 2012 saying I'd bought it for my new SIPP and hoped that its rise of about a pound from the year before was not going to reverse. I sold most of it in 2015 for between £7.50 and £8.50 after the too-good-to-be-true returns. It went below £6 the following year and would have then had some nice currency gains to bring it back up again, and I see it's now back in low to mid 7s.

Everyone thought Clinton would get in and be tough on pricing, then everyone was elated that Trump got in because he allegedly thinks anything that restricts business is horrible. That's good for bio and pharma and if you were buying last November you will have been paid handsomely by catching that upwards wave.

But biotech generally is about taking risks to find the one diamond in the rough that can make it through the trials. Which means investing is speculative. When the markets fall, which they do, and people are in 'risk: off' instead of 'risk: on' mode, the price of defensive cash generative firms with inelastic demand for their products always bear up *much* better than the price of biotech firms - who are trying to invent the next big thing but in a lot of cases don't actually have a current big thing to bring in money, and don't have investors to fund their research and trials because they're in risk: off mode.

So, some people would say that if you think US shares are relatively expensive anyway on historic levels (even disregarding GBP weakness) and biotech has had a good run, and then shares generally and biotech specifically all get another boost fuelled most recently by promises made by the incumbent president - but we know promises are not always kept... then sooner or later some of those gains will get given back, when US shares stop being so expensive, which is something that has to happen at some point, especially with rising interest rates and so on. The market does like a good crash every so often and it has been a while since we had one.

Of course, if you get another 200% off a biotech fund in the next couple of years then you can afford to lose 67% of its then value, in a crash.

The more I delve into investing, the more I'm starting to appreciate a good tanking in a particular sector. Not only for the buying opportunities, but also because it weeds out the weaker/potentially toxic stocks, much like the crash in oil prices has done for the drilling companies, leaving behind much leaner/profitable stocks.

Although it probably hasn't happened to the same extent as in oil/energy stocks, I don't think the past few months has been a bad time to buy biotech compared to other recent times. I don't doubt that there could be more turbulence ahead for the sector in the near term, but IMO, the tail winds look significantly stronger than they did last year. Whilst Trump is the main unknown factor in the equation, I doubt he will have time to take on the drug pricing issue, and even if he does, I think he will be limited in what he can do because he does not fully understand the way things work in the industry - his comments on the subject have shown that to be the case.

To draw a parallel, do you believe him when he says he will bring back coal? IMO he may as well be promising to bring back hunting for food with clubs and stones. The rest of the world will be moving in the opposite direction, making any realistic progress impossible. I've learned not to put too much faith into pre-election promises, even from seemingly respectable entities, and Trump in no way comes close to that definition.

Basically he has promised to move multiple mountains, and while I believe one or two MIGHT be possible, drug pricing is further down the pecking order, so there's a good chance it won't even get a look in. I'd argue that it's also one of the larger/more difficult mountains to move given the strength of the pharma lobby and the need for developing effective treatments.

On the other hand, if he carries through on his promise to repatriate overseas funds to US companies (pretty easy to implement without too much fuss or opposition, unlike the former proposition), many of the big biotechs would benefit.

Then there is the M&A activity, which was basically non existent in the sector last year, but has already shown signs of picking up at the start of this year. It's one of the main reasons I wanted to hold the Polar Capital Biotechnology fund, which has multiple top ten holdings that could easily become takeover targets. Indeed, the top holding (Actelion) has already shot up because of takeover talks with J&J. And all the M&A activity won't just benefit funds like Polar Capital which hold target stocks - the whole sector should benefit.

So there are multiple potential catalysts that could drive the sector up significantly this year, and if that starts to happen than the institutional investors would start to pile in, pushing the sector up even more.

It is true there are risks that come with biotech. It's not for the fainthearted or the short term, but those that can stomach it will likely be richly rewarded for the "risks" they take. I personally don't see it as a huge risk over the long term, especially if I can take profits when things are high, top up when they are low, or move the money into more defensive sectors close to draw-down.

Edit to add link relating to Trump: http://www.fool.com/investing/2017/01/14/donald-trump-just-leveled-drug-companies-with-thes.aspx

Ray_Singh-Blue

BrockStoker wrote: »

If that's the case, we should all be investing in graveyards, mortuaries, and crematoriums! Healthcare and healthcare property is unlikely to get a boost due to mortality!

I don't think mortality will rise above its current level of 100%! That trend has been flat since Elvis.

But population rise will feed through to more deaths in absolute terms, so I agree with you broadly.

Pincher

They will only dig you up to build apartments, in the UK.

Egypt has plenty of land, though.
No damp.

They do a nice line in mummification.
Dressed for Death.

The Trump Mausoleum
==============

Build a pyramid, with 10,000 berths.

Leasehold or freehold.

Buy a 50 year lease, so your descendants can visit.
when they die, you become fertiliser.

Side line in flowers, fruits, underworld money, paper mache goods (Chinese thing, you burn them).

Plus beach resort, cruise the Nile, see the pyramids.

Ray_Singh-Blue

OK, confession time. Having established the clear superiority of a buy and hold strategy, I thought sod that and had a little flutter instead.

I sold 404 units of VWRL last week, intending to find a point to buy back in within 2 weeks. Today, for almost exactly the same money - about £23,500 as it happens-I bought 409 units.

I realise this possibly casts me as a bad investor. Or a gambler. But it makes me a bad investor who is about 1% better off than a good investor. Or at least it would, if that was the sum total of my investments.

This is not the first time I have done this- it is the fifth or sixth over a few years. The common thread has been a period of rapid price increase accompanied by significant volatility, and a yearning to take a punt. It's kinda fun, but is it wrong?

Pincher

But you can do both.

You could have sold 204 units, and bought back with the cash.

I just like whole numbers, it makes quickie calculations easier.

In fact, I would have bought 200 units back, so I end up with 400 units, and spend some money, just to remind me what it's all for.

le_loup

Whole numbers. Bain of my investing life.
I can't make a purchase that's not whole numbers.
I should see a psychiatrist I know but they start a charge in whole numbers and then add VAT ........... I'm f*ck*d.

le_loup

............ then it gets worse.
I can only buy in round thousands.
If the unit stock price is too high, I can't buy unless I can manage at least a thousand shares ...............
There is no hope!

Pincher

Then try this for a screeching blackboard.

I set a limit sell order at 64.31p, on a whim.
It was so right on the limit, that it took about ten trades to sell about 80 percent of the shares. And then nobody bought at that price that day. So I was left with some partially unsold.
Next day, the number of shares was so unsightly, I had to sell the rest at any price. Fortunately, they went at 63.994p.

I knew somebody who likes to buy and sell very distinctive looking number of shares, so he can see the trade appear on the ticker.
I look at the London Stock Exchange Trades with 15 minute delays, but very rarely do they match up with my trade statement, which does have a time stamp. HSBC traders appear to do some combining, and proudly claim they beat the quote they gave, whatever that means.