Dana Dlott: “I do buy the Fidelity biotech in my retirement account and don’t pay the 3% load. Michael Burns’s suggestion for avoiding it – that you consider Rydex Biotechnology instead – is great, however.”
Tom Jewell: “Ah, but Michael Burns forgot to mention that Rydex Biotechnology (RYOAX) has a $25,000.00 minimum initial investment. What about exchange-traded funds as a quick way to diversify? Say, Biotechnology HOLDR (BBH), with a 100-share minimum (albeit $153 a share), or the iShare Healthcare exchange-traded fund (IYH), which holds about 80% drug and biotechnology stocks? IYH only requires a minimum 1 share purchase.”
☞ I don’t know anything specific about these two exchange-traded funds (EFTs), but it does sound as if they are worth a look.
Dana, again,on the bioterrorism nightmare that L.J. Kutten conjured: “I did question the young ‘artificial virus’ faculty applicant about visions of ‘The Andromeda Strain.’ One of his proposals was to make a virus covered with molecules that inhibit the body’s immune system from attacking it. I said that sounded scary– not in his hands, perhaps, but maybe in his Iraqi graduate student’s hands.
“He had taken this into account, he said. It is the replication of the virus that leads to exponential multiplication with time (like compound interest) that makes it dangerous. The virus with the artificial coating contains regular DNA. The DNA cannot code for the artificial coating. So only the first generation of viruses that attack the cancer cell is protected. Any viruses that are subsequently produced will not have the artificial coating and can be attacked in the usual way.
“There is quite a sizable community of people who have knee-jerk reactions to biotechnology. Yesterday I was driving onto campus in my car. I stopped at a busy cross walk. There were a dozen young students crossing the street. Just 1 pound of pressure on my accelerator pedal and my car would have jumped forward and killed them. Just one pound! We should ban all cars, and possibly all students as well. Do you know why all those students weren’t killed? Because I didn’t do that.”
☞ I am against knee-jerk reactions to biotech, and see no way to stop scientific progress even if we wanted to. But I think we still need to be very afraid of that one graduate student in a million or 10 million, whether Iraqi or just plain irritated, who isn’t like most people. In the old days, the most a guy could do was hit another guy with a rock. Now, with a little fertilizer and a very bad attitude, he can kill hundreds. But when could a single scientist kill billions of people before? I think Kuttner’s point is that, theoretically, at least, that day could be coming.
Quote of the Day
That I'm their competition.~Famed hedge fund manager Michael Steinhardt, when asked the most important thing an investor could learn from him.
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