[itchypickle]

Originally posted on 08/26/2012:

you say no biotech. but ARNA looks really nice to me. its now at 8.x but I do believe it will go up to +11. and obesity is a huge problem in the USA.

Biotechs and other similar trades 'look' nice using those metrics but you can't use the same logic with how many times earnings they get as you do with the larger companies like Wal Mart or Monsanto. Be careful. "earnings" and "profit" on income statements are not the same as 'cash' profits. This is how people lose money in these types of trades along with the fact that if you buy 50K @ .54 and it DOES happen to explode and reach 3.50 then remember that every trade has to have a buy and a sell, so finding a buyer to dump the larger price on at the new level is not a given...its now a higher cost and why would you want to buy AFTER the catalyst has bumped it up to a peak?

If you are really serious about wading into the biotech waters I would advise you to wrap your head around the basics of financial statements/accounting in business...not saying a company is pulling a Tyco or WorldCom every time, but its best to know a true valuation of a company and not just the 'symbol price' and 'multiple' as it relates to the market.

Best of luck