Who can forget Radient's business deals with a dead Indian prime minister or pseudo-partnership with the Mayo Clinic? Then there was Radient's massive loan default, the reluctant disclosure that its India joint venture was a bust and the delisting from Amex.
I use the Mailbag to teach investors how best to vet biotech and drug stocks, and most importantly, how to avoid losing money in the scams, frauds or stories too good to be true. Penny stocks like Radient look cheap and therefore less risky to many investors, but as Radient proved all too well in 2011, these stocks are more often money-losing black holes. Your investing dollars go in, but they never come out.
As for Chucky who wrote me back in April to crow, "Looks like you got Radient wrong you [Bleep.] [Bleep] you [Bleep.]"
Not so much, Chuck.It doesn't happen often enough but the Mailbag can sometimes discover promising, under-the-radar biotech and drug stocks. Case in point: Amarin, which was highlighted in May 2010 when the stock was trading for around $2.50 per share. My Amarin coverage continued into 2011, highlighting the company's takeout potential following the release of strong phase III data for the lipid-lowering drug AMR101. Unfortunately, even I, the biotech skeptic, can become blinded to the downside risks as I did in August when I too blithely dismissed the early warning signs of a big Amarin sell off fueled by concerns about AMR101's patent problems. If Hep C was the biggest biotech investment story of 2011, shorting new drug launches was the biotech-trading story of the year -- and a successful strategy, to boot. It seems so cruel and counter-intuitive, but in 2011, getting a new drug approved was often the worst thing that could happen to a biotech stock. The Mailbag in 2011 spent a lot of time discussing and warning investors about the perils of new drug launches, from Somaxon Pharma's (SOMX) Silenor sleeping pill and Avanir Pharma's (AVNR) Nuedexta to Cadence Pharma's (CADX) injectable acetaminophen Ofirmev and Human Genome Sciences' (HGSI) lupus drug Benlysta. This Mailbag from May was overstuffed with some of the craziest, mouth-breathing hate emails I received all year. Stuff like this almost always marks the top of a speculative biotech bubble market. The same Mailbag, by the way, demonstrated how wrong I was this year with Spectrum Pharmaceuticals (SPPI) and its cancer drug Fusilev.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV