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THE SELECTION, ADVICE, HISTORY, PREFERENCES WILL BE ALL IN THE NEW YEAR'S PROHOST LETTER

Prohost Biotech - Friday, December 28, 2012

While searching for news about great accomplishment, we encountered a variety of interesting and strange news – most having nothing to do with biotechnology. Some of the news was expected to be unveiled years ago and some useless news of the “none of anybody’s business” type of stories i also occupies the media-assigned biotech industry’s space.

Of the news that must have been divulged years ago, the most frequently posted concerns the security companies’ and funds’ executives who are accused of inside information, defying the law and order and making tons of money at the expense of law abiding investors. Reading the same news every day, but about different institutions and different people, it crossed our mind that If, for one reason or another, the authorities were, for decades, reluctant to indict and convict greedy criminals, why then didn’t it occur to them to let those zealots at least pay taxes on their illegitimate incomes and pay some more taxes on the legitimate income, if the latter happens to exist.

Other more interesting and exciting news we encountered of the kind that is “none of anybody’s business” and, of course, has nothing to do with the biotech industry, includes the story of an executive of a large pharmaceutical company who forced a female employee to have sex with him in his hotel room during various conventions. The woman said that she accepted to do what he demanded for fear of losing her job. This story makes us greater believers in the value of a book one of us is writing that partially deals with women's slavery in the Ottoman Empire during the 19th century!

The news dedicated to the biotechnology industry on Thursday was not news. It was a war of words, called opinions, that is increasingly raging between the bullish and the bearish. In these wars, the warriors are not those who are usually wounded or killed by the silver-plated bullets fabricated with care inside the high-tech hypocritical minds of the debaters. The real victims are the majority of investors, especially in the biotech sector. The casualties occur mainly among the spectators who continue to believe that the irrational, misleading storywriters hold the knowledge and read the future, and that they mean what they say and believe it themselves. WOW.

We do not have to imagine the frustration of the believers when the hour of truth comes. As a matter of fact, we do not need to imagine anything because it has happened hundreds of time before, causing the victims to feel they are being robbed, not only of their money, but of their intelligence. The strange phenomenon that we fail to understand is: Why do investors still fall in the same trap time and time and time again?

Bearish analysts’ distortion of reality, their irrational analyses of clinical trials and their underestimation of the values of the biotechnology firms have caused harm, sometimes fatal, to the development-stage biotech companies. Those most affected are firms known to be pursuing great goals, advancing products demonstrating great potential as breakthroughs and blockbusters. Some of these firms have already disappeared, while others are struggling with financial troubles that make it hard for them to advance their products in clinical trials towards approval.

The irony is that the same bearish analysts who are behind the small firms’ troubles take further advantage by warning against investing in these financially troubled firms! As a result, large pharmaceutical and large biotech companies have acquired many of these small firms at ridiculously low prices.

Counting the texts, which are not news, that are posted on the media websites, we concluded that the negative opinionated articles exceed, by far, the real news announced by drug developers and academicians at important meetings. The negative propaganda, without a doubt, outweighs positive analysts’ efforts to correct the false claims and, thus, protect investors from being misled into selling their shares in excellent accomplishing firms. 

Some of the articles filling the media raise skepticism while taking the readers nowhere. They contain no straightforward advice, no preferences, and no direction. All you find at the end of the articles are invitations for free subscriptions that would enable the investor to find the authors’ advice, preferences and direction. You do. Guess what you get? Still no advice, no preferences and nothing but a new invitation to pay for the same nothing.

Do Not Miss

The Year In Review

NEW YEAR’S

Issue # 332

Of The Prohost Letter

FORWARD-LOOKING: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

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