A Healthy Investment Philosophy Towards Biotechs
How should one approach investing in a company? More specifically how should one approach investing in a biotech? We will use Cel-Sci as an example.
Here is the way I look at it – or at least try to look at it. Decide if you want to partner with the company to help them develop Multikine. Your investment shows confidence and helps support the price for when funds are needed. You need to decide if you are willing to stick with the company through the highs and lows while they slog through the trials, and data lock & analysis. Don’t look at it as a hopeful quick return on your money. If you do, you may get impatient and sell out before the big returns occur. I know a few big investors who have already sold out because datalock and analysis was taking too long, in their minds. It made them nervous and they are now out.
Imagine, if you will, that the stock market were to shut down for the next 5 years. You can’t sell your stock. Would you still want your investment to remain in Cel-Sci? If yes, then this is your place. If no, then sell and find a more noble place to invest.
By the way, do you know who else has this type of “market shutdown” investing philosophy? Yep – Warren Buffet. He picks his stocks in such a way that regardless of the share price, he loves the business.
Ask yourself if you want to invest in the pipeline, the management and the overall business philosophy. When you do you start to think like a professional investor (i.e. Warren Buffet) and your investment philosophy becomes refined for the better. It’s not about the quick buck (although that can be nice, it rarely leads to big returns). If Cel-Sci succeeds think of the profits as a bonus to helping the company develop life saving drugs for the betterment of humanity.
The potential profits are no doubt nice, but being a part of life-saving work should give you deep joy and gratitude.