GTX Inc (GTXI) has been trading since 2004. In the 2000s, it traded as high as $234. At those highs, it gave the company a $5 billion+ market cap. This in spite of the fact the company has never had any sales…not earnings…sales. Fast forward 14 years to yesterday. The stock closed just over $23, still giving the company a market cap of over $500 million even though in those 14 years, the company still has never had sales. This morning, the stock will open down 95% as it looks like the drug did not do well in trials. Moral of the story? We guess you know the moral.
That said, we have also missed the many no sales, no earnings BIOTECHS that have soared throughout the years. We have never felt comfortable going to sleep at night owning a company knowing that if the placebo did better than the drug in trials…that the next day it would be cut in half. And to be clear, there have been many…in the hundreds.
As always pick your poison but know your poison.
Strong day yesterday. Noticing a bunch of pundits not believing the move. We have news for them…price is smarter than them.
As we told you, we thought a decent low was being put in for the REST OF THE WORLD. It has been the rest of the world that have been holding back markets. We never know how long it lasts or how far it goes but breakouts of indices are usually meaningful.
As we do our scans, we notice the weakest of DOW names have turned the corner. Names like even IBM seems to have put in lows. When the weakest put in lows, that is another good sign. Also, notice BA on the verge of a large base breakout. That had been the leading DOW name before the correction started.
We still believe growth may be losing its relative strength. This is not end of the world news. It [probably just means rest time. Growth has blown away value for a good while. Also, commodities are so under-owned and under-loved…most in a long time…so we think that is in play. Just realize it is mostly things off the lows and suspect retests or at least partial retests can occur.
Another changing of the guard day as money flows out of growth and into all the areas that were lagging. FINANICALS, COMMODITIES and all the COUNTRIES we were telling you to avoid. This is why you see the DOW now leading and other areas lagging. We suspect this is going to continue. When you have a chance, look at EEM, EFA, FXI and other areas and see that a decent low may be in. The same for GLD/GDX and XME.
Again, on the other end…growth has become extended, over-owned, over-leveraged, over-loved…may need some time to build new bases.
As far as TLRY…it is expensive at the IPO price. Good luck! Don’t be the last one in.