ARROWHEAD PHARMA

ChesterDog

Richard, would you mind indicating what your net returns have been from your portfolio manager investments?

Genuinely curious to know how they've compared with a global index tracker over a few years.

Richard1212

mattywallace121 said:

Hires portfolio manager who completes large amounts of research, yet comes on a public forum asking for advice...............?

No, not at all, matty---just tossing a few thoughts around and gauging other people's views : it's one of the purposes of this site.

BrockStoker

Hello Coach and all, hope you are well.

I still have very high confidence in Arrowhead. I must admit I was probably a bit naive at first, not having much experience with stocks, and I was expecting Arrowhead to "take off" sooner than it has. They did make the decision to pull their CF therapy, but that is because they know they have a better/upgraded CF therapy. While this is a setback, and it means going back to square one with CF, it also means that they will have a stronger therapy which will have a better chance of keeping it's top spot (assuming it gets there) as best in class therapy, which is good for the long term.

Arrowhead's competitor Alnylam is an excellent comparison that shows what RNAi can achieve, and suggests where Arrowhead can be in a few years time once it has an approval or two. Although Arrowhead is playing catch-up at this point, it's approvals, when they come, will be much more aggressive/lucrative than Alnylam's.

This is a long term story, and I think buying at current prices will eventually pay off in a big way. First approvals should be around 2023/2024, so it could still be a while before Arrowhead becomes profitable, but when it does, I'm confident it will do in a big way.

This is a very basic analysis, skipping over many positives that Arrowhead will benefit from, eventually, but as usual, Wall Street is stuck in it's old ways, and will not see it coming till the last minute. My opinion of course!

Richard1212

ChesterDog said:

Richard, would you mind indicating what your net returns have been from your portfolio manager investments?

Genuinely curious to know how they've compared with a global index tracker over a few years.

Forumites shouldn't really give out actual figures on this site, Chester, as it tends to bring out the regulars whose sole aim is to disparage.....but what the heck !

Last 5 years (within a couple of months ) net returns = +22% ( as at November 2022).

My portfolio manager's biggest coup was probably getting me to buy 1,000 Amazon shares in early 2015 ( at $17.7 )  and telling me to sell three-quarters of them in summer 2021 (at $174 ). I still hold  250 shares and last time I looked at price they were standing at about $80.

Of course there have been failures along the way---many of them, given the number of shares I hold. Off the top of my head Facebook/Meta springs to mind as I bought 500 at $370ish in Summer 2021 and they now stand forlorn at about $100. I'd need to get out all my statements to do better than these couple of examples but they give a gist of my ups and downs; and the overall advantage of a portfolio manager, who with his 6 assistants and 6 researchers , plus a few clerical and reception staff , has ben invaluable to me for many years. Merry Xmasy, Chester.

 

Richard1212

BrockStoker said:

Hello Coach and all, hope you are well.

I still have very high confidence in Arrowhead. I must admit I was probably a bit naive at first, not having much experience with stocks, and I was expecting Arrowhead to "take off" sooner than it has. They did make the decision to pull their CF therapy, but that is because they know they have a better/upgraded CF therapy. While this is a setback, and it means going back to square one with CF, it also means that they will have a stronger therapy which will have a better chance of keeping it's top spot (assuming it gets there) as best in class therapy, which is good for the long term.

Arrowhead's competitor Alnylam is an excellent comparison that shows what RNAi can achieve, and suggests where Arrowhead can be in a few years time once it has an approval or two. Although Arrowhead is playing catch-up at this point, it's approvals, when they come, will be much more aggressive/lucrative than Alnylam's.

This is a long term story, and I think buying at current prices will eventually pay off in a big way. First approvals should be around 2023/2024, so it could still be a while before Arrowhead becomes profitable, but when it does, I'm confident it will do in a big way.

This is a very basic analysis, skipping over many positives that Arrowhead will benefit from, eventually, but as usual, Wall Street is stuck in it's old ways, and will not see it coming till the last minute. My opinion of course!

Coach ? I don't understand, sorry. But I was told that you were THE main man concerning Arrowhead, a company which burned me and make me scared stiff of the biotechs sector . Although I have sold all my shares at a modest loss, I was interested to know why such positivity about the company turned so sour. Your post shows continuing positivity but it just does not tally with how the markets have reacted over the past few years to the company and its wannabe drugs. I'm all for being " in for the long term" but Arrowhead looked to me after a couple of years as though it was always promising a lot but never delivering. There is still no drug on the market and yet the company disingenuously calls itself Arrowhead Pharmaceuticals. 

You do not actually mention why there is absolutely no sign, after years, of an uplift in the company's fortunes. Even its TRiM platform doesn't attract interest anymore. 

I'm glad I sold, even with a noticeable  loss, but I sincerely wish your optimism results in your share holdings bringing you joy. Thank you very much for your post which gives food for thought : anything can happen in the dreaded biotechs sector. Best wishes. 

kinger101

Richard1212 said:

ChesterDog said:

Richard, would you mind indicating what your net returns have been from your portfolio manager investments?

Genuinely curious to know how they've compared with a global index tracker over a few years.

Forumites shouldn't really give out actual figures on this site, Chester, as it tends to bring out the regulars whose sole aim is to disparage.....but what the heck !

Last 5 years (within a couple of months ) net returns = +22% ( as at November 2022).

My portfolio manager's biggest coup was probably getting me to buy 1,000 Amazon shares in early 2015 ( at $17.7 )  and telling me to sell three-quarters of them in summer 2021 (at $174 ). I still hold  250 shares and last time I looked at price they were standing at about $80.

Of course there have been failures along the way---many of them, given the number of shares I hold. Off the top of my head Facebook/Meta springs to mind as I bought 500 at $370ish in Summer 2021 and they now stand forlorn at about $100. I'd need to get out all my statements to do better than these couple of examples but they give a gist of my ups and downs; and the overall advantage of a portfolio manager, who with his 6 assistants and 6 researchers , plus a few clerical and reception staff , has ben invaluable to me for many years. Merry Xmasy, Chester.

 

A global index tracker is up by more than 50 percent over five years.

kinger101

Richard1212 said:

BrockStoker said:

Hello Coach and all, hope you are well.

I still have very high confidence in Arrowhead. I must admit I was probably a bit naive at first, not having much experience with stocks, and I was expecting Arrowhead to "take off" sooner than it has. They did make the decision to pull their CF therapy, but that is because they know they have a better/upgraded CF therapy. While this is a setback, and it means going back to square one with CF, it also means that they will have a stronger therapy which will have a better chance of keeping it's top spot (assuming it gets there) as best in class therapy, which is good for the long term.

Arrowhead's competitor Alnylam is an excellent comparison that shows what RNAi can achieve, and suggests where Arrowhead can be in a few years time once it has an approval or two. Although Arrowhead is playing catch-up at this point, it's approvals, when they come, will be much more aggressive/lucrative than Alnylam's.

This is a long term story, and I think buying at current prices will eventually pay off in a big way. First approvals should be around 2023/2024, so it could still be a while before Arrowhead becomes profitable, but when it does, I'm confident it will do in a big way.

This is a very basic analysis, skipping over many positives that Arrowhead will benefit from, eventually, but as usual, Wall Street is stuck in it's old ways, and will not see it coming till the last minute. My opinion of course!

Coach ? I don't understand, sorry. 

I do.            

Richard1212

JohnWinder said:

I get the sense that you don’t need my advice with your investing, but you’ve raised an interesting point.

‘I have no doubt that constant research by my manager makes "skill" more significant than " luck"’

Recall that over the last century 96% of USA stocks returned no more than a savings account would have. Only 4% of stocks made the US stock market as good as it was. Two thirds of US stocks gave a negative return over the last few decades. This suggests that ‘luck’, if it means choosing haphazardly or without deliberation, will fail badly as a stock investing approach since you’re more likely to choose a loser each pick. So your advisor’s skill will need to be much MUCH more significant than their luck. It probably is, but is it enough to get you above market returns, taking the same risk? This is why not, according to the cognoscenti (which I’m not)…

The price of any/all stocks reflects all the knowledge which all stock traders have; everything known about that stock is reflected in the price. We can say that because if any trader(s) knew something suggesting the stock was more (or less) valuable that no one else knew, they would buy (or sell) thus moving the price until it reflected their knowledge of its value. So, to claim you can trade stocks to get better than market returns is to say you have more knowledge of those stocks than all or nearly all traders in the market!  Someone on the planet has to be the best I suppose, but why should it be your advisor (or why not, I suppose)? It’s a ‘big ask’. The challenge for your advisor, doing all his research, is that he’s up against not just me or you with limited knowledge whom he’d make a killing out of, but up against the best professional investors and fund managers on the planet with all their resources. Is he better than all or almost all of them? That would take luck on your part, or he needs luck to make up for any gap between his knowledge and the total of everyone else’s.

You hitch your wagon to luck more than you need to in chasing market returns which we can get with a broad cap weighted index fund; or are you after more than that, in which case consider leveraged market buying.

I always need advice, John ! 

I found your post exactly what this forum really needs----a well thought out concept that is complex but made simple by your way of setting it out in your original way, written so as to make it understandable and interesting. I'd vote for it to be "post of the month " if asked. 

I've given a lot of thought as to how to reply but I cannot find the right way to do so. I could try and write a pseudo-philosophical/intellectual rambling post but I don't think that is the right approach for your specific thoughts you shared. 

So would you mind, please, if I answered in simple terms which sum up my own views on the whole concept you are raising whilst at the same time trying to comment on your own views.

The analogy which jumps to mind is poker ( laughable to many, I'm sure). Luck is a major part of the game but amateurs like me tend to lose over any reasonable period of time. But there are individuals ( facing the same degree of luck) who are professional poker players and earn a very lucrative living ( the top 75% of pro poker players in USA make about $200,000 pa on average). I see my portfolio advisor and his 6 assistants and 6 researchers as in the same sort of category. If they were amateurs , they would soon be out of business. But, starting with their CV which is a good base  The more research they do, the more experience they get, the more thoughtful, patient, determined and visionary they are...... the more the element of luck is lowered-----and the aim is never to be the only person in the world who knows what the markets are going to react to one company or one sector or many more than that; it is to do so much work with so much experience that the "luck factor" is made less and less. All an investor needs from a manager is someone who cuts a factor of being affected by 80% luck to being affected by 30-40% luck ( or less if that is possible?). Starting with looking at their CVs , background and how close they are to the markets and /or researching...........and then their track record over some years of advising clients ........a picture emerges of whether or not they inspire trust. I can only talk about my own portfolio manager and his small band of staff  ----but they have shown me that professionalism and in-depth research on a personal basis ( which cannot be matched by, for example, global index tracker or DIY ) really works. Perhaps I have just been lucky ( that word again) in choosing my manager/advisor......but even so, I believe in the overall view I have tried to convey in a clumsy way in this post. Thx so much, John---really enjoyed your logical thoughts. All the very best and....Merry Xmas.

Cus

@Richard1212 I am all for using portfolio managers if the right circumstances permit but you should have your own benchmark to compare how they perform. You are paying them a lot of money, you should be ruthless. 22% cumulative gain over 5 years, when investing solely in equity is on the low side, with additional risk.

BrockStoker

Richard1212 said:

BrockStoker said:

Hello Coach and all, hope you are well.

I still have very high confidence in Arrowhead. I must admit I was probably a bit naive at first, not having much experience with stocks, and I was expecting Arrowhead to "take off" sooner than it has. They did make the decision to pull their CF therapy, but that is because they know they have a better/upgraded CF therapy. While this is a setback, and it means going back to square one with CF, it also means that they will have a stronger therapy which will have a better chance of keeping it's top spot (assuming it gets there) as best in class therapy, which is good for the long term.

Arrowhead's competitor Alnylam is an excellent comparison that shows what RNAi can achieve, and suggests where Arrowhead can be in a few years time once it has an approval or two. Although Arrowhead is playing catch-up at this point, it's approvals, when they come, will be much more aggressive/lucrative than Alnylam's.

This is a long term story, and I think buying at current prices will eventually pay off in a big way. First approvals should be around 2023/2024, so it could still be a while before Arrowhead becomes profitable, but when it does, I'm confident it will do in a big way.

This is a very basic analysis, skipping over many positives that Arrowhead will benefit from, eventually, but as usual, Wall Street is stuck in it's old ways, and will not see it coming till the last minute. My opinion of course!

Coach ? I don't understand, sorry. But I was told that you were THE main man concerning Arrowhead, a company which burned me and make me scared stiff of the biotechs sector . Although I have sold all my shares at a modest loss, I was interested to know why such positivity about the company turned so sour. Your post shows continuing positivity but it just does not tally with how the markets have reacted over the past few years to the company and its wannabe drugs. I'm all for being " in for the long term" but Arrowhead looked to me after a couple of years as though it was always promising a lot but never delivering. There is still no drug on the market and yet the company disingenuously calls itself Arrowhead Pharmaceuticals. 

You do not actually mention why there is absolutely no sign, after years, of an uplift in the company's fortunes. Even its TRiM platform doesn't attract interest anymore. 

I'm glad I sold, even with a noticeable  loss, but I sincerely wish your optimism results in your share holdings bringing you joy. Thank you very much for your post which gives food for thought : anything can happen in the dreaded biotechs sector. Best wishes. 

Richard, apologies if I mistook you for someone else

There is an obvious disconnect between what the market thinks about Arrowhead and what the Arrowhead bulls like myself think. I'm I bit tied up at the moment, so please bear with me, and I'll set out the bull case hopefully in 24-48 hrs, when I should get a chance.