Explaining The Rationale Of My GERN – GERON Position

by Olivier on January 31, 2009

Some thoughts explaining the rationale of my GERN – Geron position.
First of all this is a biotech company. Biotech is inherently risky. You need to be aware of the risks. Then again that pretty much applies to every single stock position. Trading is about knowing and evaluating risk.

While I am at it I want to direct your attention to one of my favourite books: ‘The Nature of Risk’ written by Justin Mamis which I highlight in my recommended books section.

It’s been more than 12 months I haven’t found a single compelling ‘story stock’. GERN does qualify as a super stock for several reasons.
There are only so many fields where you want to be a leader if you are aspiring to be a leading nation. A few of those fields IMO are:

  • 1. Internet technology
  • 2. Energy
  • 3. Biotechnology
  • 4. Preserving wealth

Right now I don’t see any rule breaking companies being able to redefine the Internet emerging.

Energy dependency is something everyone wants to avoid. The future is about secure energy sources. This obviously includes alternative energy sources, technology and nuclear power. Some rule breakers are going to emerge from that sector. Maybe some uranium related companies. That’s why I am watching them closely.

Biotechnology. This is going to be THE sector where highly developed nations will want to consolidate their lead over less developed nations.

Preserving wealth. This is the reason why I monitor the precious metals sector so closely.

GERN is the leader in one area being able to redefine biotechnology. It has a higher market cap than its competitors and is the only one associated with embryonic stem cell research as opposed to adult stem cell research. It has no debt and the chart looks awesome.

I am not doing all this research to understand the technology. There is no way to understand it and one doesn’t need to. All I am doing is a sentiment analysis. I try to gauge what people think when it comes to the stock market and specific stocks.

The GERN chart looks like a huge short squeeze is coming. When people think about GERN they are willing to have dreams. This is the stuff that can propel stocks to higher grounds.
All I can say is: Stay disciplined and as long as the chart is acting right – stick with your position.

Have a great weekend!

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