Anavex Life Sciences Corp (AVXL)

[Investor2014]

Agree with that Raja.

I follow a fairly straight forward strategy to biotech investing, but it requires willingness and effort to do DD, as well as some discipline.

a) I research and at least try to understand the science

b) I examine pps history and the news events that drove price as well SEC filings and financials e.g. how much cash is available / possible dilution

c) Jump on conf calls to hear and feel the sincerity and enthusiasm of the CEO and senior staff. Take note of the Q&A sessions

d) Many biotechs fail, so I aim to keep a portfolio of a least two handfuls of stocks. I make sure my DD selects those firms with BIG potential for returns and accept several will fail. The simple notion here is that the few that win big will more than offsets the losses. I never short or use derivatives and so I know exactly how much I could and am prepared to loose

e) I try hard not to be super overweight in one stock (AVXL is breaking my rule a bit)

f) If I later learn I have misunderstood a stock's potential and it seems downhill all the way, I get rid of it.

g) Meanwhile, I am fine with the expected huge volatility of biotech. So I never use automated stops - sorry Plato7 for being a bit unsophisticated here.

h) When a stock goes high on no apparent news, I may swing trade a bit to reduce cost of the position

i) Likewise, when it goes really well I do cover my cost. I find this a hard discipline, especially with really good stock like AVXL, but longer term I believe in the statistics and try to stick to what I have learned from experience

j) When I decide to buy and sell, I use a little TA to at least not time it completely silly: Price movement, Volume, SMA and Chakin Oscillator. The latter I have found quite a reliable indicator crossing zero down for selling and zero up for buying, but always viewed in combination with the aforementioned data points.

I think that's about it, except to say the research DD is where most of my time/effort goes in before buying.

I completely understand and accept there are many and successful styles of playing the markets, including TA ,day and swing trading.

Interested in hearing the approach other folks take especially to Biotech.

GLTA