Todd Harrison: Biotech Leads Stocks Higher, but Will the Trend Last?
Musings on media, cannabis, and the world at large.
During my commute this morning, I noticed a man reading the newspaper. What struck me was that he was the only person holding an actual paper, as opposed to every other person on the train using a smartphone or tablet device.
Having already read the morning news, I turned to my smartphone, shuffled from Bill Withers to Eminem, and jumped on Twitter (NYSE:TWTR) to see what folks were talking about.
I looked out the window as the morning sun lit the Manhattan skyline, stopping to think about how the media space has evolved. Once upon a time, it was considered an honor to have your thoughts broadcast to the world; these days, all you need is Internet access and a desire to be noticed.
Tremendous benefit has emerged from the democratization of publishing. Tyranny has been exposed, hidden truths revealed, and valuable insights shared. These gifts have come with a cost, however; news and information has never been more scattered.
Everywhere you turn, someone is offering their view of the world, and the lines of distinction between opinion and fact have blurred in kind. It's a blessing and a curse, depending on where you sit on the media spectrum. Innovation has created a new category of exposure while simultaneously deflating the quality of content.
This will be my fifteenth year of writing about the financial universe in real time; when we started Minyanville, blogs and social media did not exist and the space has since become crowded in a constant battle for mind share -- brasher headlines, more outrageous claims. I contend that quality content has a place in the hierarchy, much like HBO to basic cable.
I often think about where these secular shifts will lead, and more importantly, how we can get in front of them. It's an ever-changing puzzle; one with downside traps and upside rewards. It's not always easy to navigate commercial relationships while maintaining an independent editorial voice.
That has always been a point of differentiation at Minyanville, albeit an increasingly complex challenge in an interconnected world.
We've often said, "In order to get through it, you have to go through it, and we're going through it now," and that continues to continue, which is a blessing in my book: By the time we get to where we want to go, the journey will have ended.
And in many ways, we're just getting started.
GW Pharma (NASDAQ:GWPH) is up 40% on the Morgan Stanley (NYSE:MS) initiation (overweight) and price target ($103). I'm told that CNBC ran with the story as well this morning, which contributed to the parabolic frolic.
While I'm operating with a longer-term lens on this one, I'll likely make partial sales or write upside calls against some of the common stock. I think this puppy is triple-digits at a point-- Bank of America (NYSE:BAC) has a $93 price-target -- but discipline is discipline.
- Biotech is outperforming today as M&A in the pharmaceutical space adds fuel to the fire. The iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB) is back above the 200-day, lending credence to the notion that some of the supply was tax-related selling. The bears could argue that a move to IBB $250 would put a "right shoulder" in, and perhaps they're right -- in an Igor sorta way.
- Wow, the VXO (INDEXCBOE:VXO) is pre-teen again. I wonder how long that will last; my guess is not long.
- The Russell (INDEXRUSSELL:RUT) also acts well today, although for purposes of perspective, it's still wrestling with "lower highs" since the breakdown below RUT 1182.
- As goes Goldman (NYSE:GS), so goes the tape? Not sure, but I do know that $160 is big for the stock.
- And finally, before we get too giddy, I've updated the Smart Money Index below as a tagalong to yesterday's column. Through this lens, the two most important words in the financial sphere right now are "Buyer beware."
- As always, I hope this finds you well.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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