Replies to post #104896 on Biotech Values

[linhdtu]

My explanation is even simpler than that.

Price is always set at the margin in a market system. And the margin is the retailers. And the retailers jump from one hot stock to another.

I look at arna,vvus and orex as an example. None of these companies have any earning, hence no p/e ratio to speak of. So tell me why did arna make a round trip from 3 to 8 and back (and then some); vvus was 12 and changes with no earning whatsoever and the same with orex.

To me psychological factors are more important than TA or I may even say that psychological factors help me make sense of certain TA rules.

[alertmeipp]

my post was misleading. let's put it this way.

Let's use your 60M #.

assuming growth rate of 5% and discount of 15%, that 60M income steam is worth about $600 million.

new competition may enter the market,etc but the counter argument is sole approval maybe here to stay.

i would argue at current price, we are not paying much for the rest of the company.