Risk vs Volatility - I've been quietly watching CTIX and am thrilled with the progress on clinical trials and addition of Dr. Bertolino to the exec team. The company has made material progress on important fronts and I expect a big payday in the future (hopefully before I'm dead :) The stock price volatility makes many believe there is a lot of risk with this investment but I think the risk is actually much lower than is reflected by the general sentiment.
CTIX has yet to fail on any major trials or milestones, yet the stock is off 80% from its highs. Again this is volatility, not risk. I feel there is a high probability one of the compounds proceeds to the point where the stock price will better reflect the true opportunity and company value.
My comments above are based on a conversation I had yesterday with a friend who manages a 100M hedge fund (mostly his own money) and we were talking about the hubris of the markets and how it's hard to know what to do given today's environment. He mentioned that several of his big bets are way underwater but he doesn't consider those high risk plays but they are highly volatile as 50%-70% price moves are common. He is totally confident about where the prices will move, he's just not sure on the timing. As a money manager that is hard as most investors don't have the stomachs to watch and hold paper losses.
I think this line of thought is very relevant to CTIX - it is a very volatile issue in a volatile space but that doesn't necessarily mean it's a "risky" play.
I think when I first bought in 2012 and 2013 CTIX was a high risk play because there was a moderate to high probability of me losing my total investment. Given the progress of the past four years, I no longer see that as a significant risk. What I'm faced with now is trying to keep my fingers off the buy button as I already have significantly more CTIX stock than my allocations call for but the price and value are so compelling.
CTIX is doing very well on most measurements just not on stock price appreciation. That said I feel Leo is very serious about building value and seems to be learning from his past mistakes. I'm very positive on CTIX and continue to accumulate and hold.
