Soros on Innovation

Recent interview with George Soros (referred to as “The Smartest Man in Europe”)

…SNIP

"But if you want to make real money investing, you will have to do it by picking stocks in technology and biotechnology, and I would emphasize the latter.

Most people still don’t recognize the gigantic implications of this phenomenon. Major breakthroughs are going to be taking place in cancer, heart disease, Alzheimer’s, diabetes, multiple sclerosis and other diseases. Picking the right companies can produce impressive returns in a difficult overall market environment. Right now there are literally hundreds of small companies working on significant products. Many of them will fail, but a few will change the world the way Google and Facebook did. Most are located in California and Boston, but there are also some in Europe and Asia. The United States is dominant, however. You should spend your time trying to understand what these companies are doing. The returns for picking the winners could be huge. What’s more, the pace of innovation is quickening. The rewards for proper asset allocation will be very modest. I like Facebook; Salesforce; biotech ETFs; an industrial company, CF Industries; Visa; Apple, of course; Alibaba; and Palo Alto Networks. I am out of Google."

http://tinyurl.com/nrgjkpv

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He did not mention a single biotech stock. Hmmmm.

lovepeace

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That link is a must read. Thanks for finding it.

Soros does know investments whatever you may think about his other ideas.

He didn’t get to be super rich buy sharing anything actually actionable. But he is pointing toward stock selection over asset allocation.If this turns out to be true it will nicely with the Saul methodology.

Re biotech - I have been an overall winner in biotech stocks, but that probably was due to luck with one huge winner, Dendreon.

Biotech is a very hard place to find an edge, all the Wall Street analysts hire the best scientists to check out the odds of success. And this is reflected in the price
Even if the drug study results are great, there are the FDA hurdles to get through.

.Most drugs fail, in fact I have often wondered if a strategy of shorting every drug company near an announcement would be succesful. You would win more often than you lose.

I have a strong science and medical background and still seldom find an edge. IOW , knowing something others don’t know.
Exception are non medical events. like the panic in GILD when competitors cut a reduced price deal. Another exception may be right after a drug is approved, it takes time for analysts to issue buy recs. If you have been following closely you will have a better idea of the potential market size and competition than the average investor.

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http://seekingalpha.com/article/3296195-gilead-sciences-a-ra…

Biotechnology stocks, as measured by the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), have outperformed the market, as measured by the SPDR S&P 500 ETF (NYSEARCA:SPY), by over a 3:1 ratio over the last five years, and by over a 6:1 ratio over the last ten years. I believe biotechnology stocks are in a bubble,

I don’t know whether they are in a bubble or not, but one can’t ignore those outperformance charts. Either the overall market is undervalued or biotech is overvalued. Compared to each other.

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Considering Sauls philosophy, Wouldn’t all biotech companies that are not currently making money and have new drugs in the approval pipeline be considered story stocks?

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Biotech is a very hard place to find an edge…
I have a strong science and medical background and still seldom find an edge.

I do not really follow biotech, it is too complicated for me. But I have looked into it.

As far as I am concerned, anyone serious about following biotech needs to follow a board over on Investors Hub: http://investorshub.advfn.com/Biotech-Values-1418/. Of course it takes a while to figure out who is worth listening to there. I suggest paying special attention to what user DewDiligence has to say.

A couple of years ago Dew was an occasional visitor to the free TMF boards as DewDiligence0. His final post was to say he was taking a large position in Enanta (ENTA): http://discussion.fool.com/enta-30853529.aspx?sort=whole#3085352…. (I followed along and up up 130%.) As of late January Dew said ENTA was his largest position and he was holding with high expectations.

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Considering Sauls philosophy, Wouldn’t all biotech companies that are not currently making money and have new drugs in the approval pipeline be considered story stocks?

Yep

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