What It Took to Win

Get Jim Cramer's picks for 2006.

In 2005, fortune favored the brave.

Stock investors who played it safe in 2005 had lackluster results, with the S&P 500 headed for a 3.8% gain for the year -- well below the current 4.4% yield on the 10-year Treasury bond. Meanwhile, the stars were aligned for risk-takers who made the boldest bets and lived to tell about them.

The get-rich-quick crowd found the stock market's monster returns in drug development, oil speculation and energy drinks, among other things.

Two obscure drugmakers, ViroPharma (VPHM Quote) and Myogen (MYOG Quote), staged eye-popping rebounds as their prospects improved after suffering rejections in the government's high-stakes drug-approval process.

Elsewhere, a little-known oil and natural gas company, GMX Resources (GMXR Quote), became a gusher as oil prices skyrocketed. And with Congress calling for oil companies to build more refineries, Dynamic Materials (BOOM Quote) caught a bid, not all of which can be attributed to its ticker symbol.

A better-known moonshot was Hansen Natural (HANS Quote), which, with its caffeine-laden drinks, took on Coke (KO Quote) and Pepsi (PEP Quote). A large band of speculators went along for the ride.

Swelling

Shares of ViroPharma vaulted almost 500% this year as demand for Vancocin, its government-approved antibiotic that treats inflammation of the mucus membrane of the intestine, increased dramatically. The company announced three separate double-digit price increases on the drug this year, ratcheting up sales. It's expected to post an annual profit of 85 cents a share for the year -- its first profitable year on the books.

ViroPharma bought the rights to Vancocin from Eli Lilly (LLY Quote) in late 2004, after a clinical setback for a would-be cold treatment sent its shares into the single digits.

"There is a public relations issue with raising the price substantially for a product that is used to treat serious infections," said Adam Cutler, analyst with JMP Securities. "It wasn't worth it for a huge company like Eli Lilly to take on that public relations challenge, but it has definitely been worth it for a little drug discovery firm like ViroPharma."