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Stop Swinging For The Fences With Biotech Stocks


Many individual biotech stocks have a great story, but many don’t pan out.

Stop trying to swing for the fences when victory can be found by hitting singles and doubles.

Use ETFs for diversification and victory in the biotech sector.

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Buying a biotech stock thinking that it will turn into a home run can cause more disappointments for investors than victories. This reminds me of baseball players that try to swing for the fences rather than strategically aiming to put the ball in play for a single or get on base or to advance the runners.

As a Phillies fan, I have suffered watching Ryan Howard try to swing for the fences at every at bat, rather than strategically putting the ball in place. The opposing teams know how predictable Howard is and so they shift to the right side of the field where he typically pulls the ball. I always wished that Howard learned how to hit the ball down the third base line when the shift was on.

Howard strikes out quite often at about 30% of his at-bats. I still love him as a 2008 World Champion and for what he accomplished especially during the 2006 - 2011 time- span with over 30 home runs and more than 100 RBIs in each of those seasons. However, I think that he could have more effectively lived up to his $25 million per year salary by learning to hit for singles or even bunting at strategic times.

Perhaps by doing so, Howard would have had more seasons with a batting average exceeding .300. He may have had more all-star appearances and contributed to more wins for the Phillies.

With stocks, investors can get caught up in the frenzy of trying to...