The first full week of market trading in 2012 began this morning
with a big Pharma acquisition dominating the headlines.
Bristol-Myers Squibb (
decided to spend $2.5 Billion of its cash hoard
on biotech company Inhibitex, which boasts a promising hepatitis C
treatment. The market for hepatitis treatments is lucrative, but
the road FDA approval is a long, tenuous process. The purchase will
hurt BMY's earnings for the next couple of years and we are
currently evaluating our favorable stance on the company's shares.
Similar to a pro sports team signing an elite athlete straight out
of high school to a multimillion-dollar deal, BMY's move is
speculative, and the odds of success are far from certain.
Elsewhere, other biotech names shot higher as traders wonder who
may be next in line for a potential takeover. Biotech investing
tends to go through cycles where one big takeover premium can set
off exuberant stock activity. I've been around the game long enough
to know that in biotech investing, the risks are extremely high. A
stock price can shoot higher, only to be obliterated overnight on
failed studies. Keep this fact in mind as the media parades biotech
analysts out in droves amid their never-ending quest for
Wall Street analyst calls were a catalyst in moving shares today
as well. Positive commentary helped shares like Ralph Lauren (
) and Broadcom (
) end the day higher. On the flipside, negative comments pulled
down several names, including Aflac (
), CME Group (
), and Costco (
Your "Day in the Sun" Will Come and Go
As you probably know by now, I'm a big sports fan. This past
weekend in the NFL, we saw the New Orleans Saints use their
experience to beat a Detroit Lions team that had not been in the
playoffs for many years, and whose franchise has suffered with
several seasons of poor performance.
After the loss, one particular Lions player, cornerback Aaron
Berry, took to Twitter. Apparently incensed by negative online
reactions to his team's play, Berry tweeted that Detroit fans can
now go back to being "broke & miserable."
Berry is just the latest in a string of pro and college athletes
to pull verbal gaffes in social media circles. The "power of the
pulpit" can be both a blessing and a curse if not handled properly.
For athletes or anyone else in the public eye, developing a thick
skin is a requirement in my opinion. Feeding into negative comments
online will almost always land you in hot water. Can you imagine if
I insulted readers in my daily newsletter each time someone
criticized my work?
Athletes are some of the highest-paid professionals on the
planet, and at the end of the day, they can use their positions of
popularity to achieve a lot of good in the world. The magnifying
glass these men and women play under is only getting bigger, but
some players need to bear in mind that the spotlight won't last
forever. So even if winning isn't in the cards,
certainly shouldn't be.
Perhaps 19th century author Elbert Hubbard said it best: "To
avoid criticism, do nothing, say nothing, be nothing."
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I hope everyone had a chance to check out our
members-only weekend articles , including new features that
highlight some of the biggest winners and losers from the week that
was, such as analyst upgrades/downgrades and earnings/story stocks.
These articles are a great way to catch up on the week that was in
the markets. We also have a rundown of how various Dividend ETFs
performed on the week.
Thanks for reading everybody. I'll see you tomorrow!
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