Biotech just went negative
Amid all of yesterday’s red numerals and sad-trader stock photos, biotech slipped into the negative for 2018, just months removed from setting an all-time high.
The XBI, a closely watched index of biotech stocks, is now underperforming the S&P 500 for the year, as the chart above illustrates. That, historically speaking, is bad. Investors have been consistently pouring money into biotech this year, but generalist interest tends to dry up when the drug industry can’t demonstrate returns that beat benchmarks, and the S&P is a pretty commonly benched mark.
But The Wall Street Journal’s Charley Grant argues that the latest slumplet is no reason for investors to bail on biotech. The sector’s last downturn was painful, with indices falling 40 percent, but it didn’t entirely staunch the flow of IPOs, and it was swiftly followed by a rally. If a repeat of that correction is in the cards, it’s unlikely to be a dot-com-style doomsday.
The XBI, a closely watched index of biotech stocks, is now underperforming the S&P 500 for the year, as the chart above illustrates. That, historically speaking, is bad. Investors have been consistently pouring money into biotech this year, but generalist interest tends to dry up when the drug industry can’t demonstrate returns that beat benchmarks, and the S&P is a pretty commonly benched mark.
But The Wall Street Journal’s Charley Grant argues that the latest slumplet is no reason for investors to bail on biotech. The sector’s last downturn was painful, with indices falling 40 percent, but it didn’t entirely staunch the flow of IPOs, and it was swiftly followed by a rally. If a repeat of that correction is in the cards, it’s unlikely to be a dot-com-style doomsday.
.png)
No hay comentarios:
Publicar un comentario