In Memoriam -- James Michaels :: Michael Shulman's Biotech Blitz

In Memoriam -- James Michaels

I never met the man but he has greatly influenced my view of what I do. And his credo is something any financial analyst or adviser can never stray from: "We may be wrong, but are never uncertain."

And that is the key to making an investment, recommending a company or challenging someone -- do not be uncertain. You may be wrong and have to take a loss, change a position or eat crow at the next cocktail party or family gathering, but certainty is the key to successful investing. If you get into a position you are lukewarm about, you are going to mismanage that position.

I learned this when I ran institutional research at ChangeWave, calling on more than 200 hedge and mutual funds. The prospect or client wanted certainty. I remember being thrown out of one sales call for saying Cisco (CSCO) would not hit previous highs until my grandchildren were out of college; I lost a sale because I continued to insist Apple (AAPL), then (split-adjusted) at $8, was a screaming buy.

And, of relevance to biotech, I had it out with a hedge fund manager who did not like generic manufacturers because of an "uncertain business model" five years out, due to competition. Of course, he did not own a company that could produce revenue in anything less than five years. Or the biotech analysts who defended her investment in Genta (GNTA), at $14, because "they have so many trials, one will work." It trades below a buck and she trades somewhere else, I believe.

I was certain Cisco would not grow, on average, fast enough top its previous highs; the ChangeWave surveys told me all I needed to know about Apple; Teva's (TEVA) mixed model of generics and proprietary drugs was far better than anything in that bozo hedge fund manager's portfolio; a physician familiar with Genta's drugs told me that when a patient prefers to die than be subject to the toxicity of a drug's trials, that drug has problems.

I was certain, the way James Michaels would have demanded I be certain if I had worked for him.

My best wishes to his family.

Comments

A great, if unknown, leader of the financial press died this week -- James Michaels, the former editor-in-chief of Forbes. He was an iconoclast, a ground breaker, a contrarian -- and now you know why I liked and admired him so much. When the rest of the press were printing company press releases and copying each others' business stories in the early sixties, Michaels turned Forbes into an aggressive, contrarian, leading-edge publication that set the tone, and the bar, for quality, terrific financial reporting for decades. I never met the man but he has greatly influenced my view of what I do. And his credo is something any financial analyst or adviser can never stray from: "We may be wrong, but are never uncertain." And that is the key to making an investment, recommending a company or challenging someone -- do not be uncertain. You may be wrong and have to take a loss, change a position or eat crow at the next cocktail party or family gathering, but certainty is the key to successful investing. If you get into a position you are lukewarm about, you are going to mismanage that position. I learned this when I ran institutional research at ChangeWave, calling on more than 200 hedge and mutual funds. The prospect or client wanted certainty. I remember being thrown out of one sales call for saying Cisco (CSCO) would not hit previous highs until my grandchildren were out of college; I lost a sale because I continued to insist Apple (AAPL), then (split-adjusted) at $8, was a screaming buy. And, of relevance to biotech, I had it out with a hedge fund manager who did not like generic manufacturers because of an "uncertain business model" five years out, due to competition. Of course, he did not own a company that could produce revenue in anything less than five years. Or the biotech analysts who defended her investment in Genta (GNTA), at $14, because "they have so many trials, one will work." It trades below a buck and she trades somewhere else, I believe. I was certain Cisco would not grow, on average, fast enough top its previous highs; the ChangeWave surveys told me all I needed to know about Apple; Teva's (TEVA) mixed model of generics and proprietary drugs was far better than anything in that bozo hedge fund manager's portfolio; a physician familiar with Genta's drugs told me that when a patient prefers to die than be subject to the toxicity of a drug's trials, that drug has problems. I was certain, the way James Michaels would have demanded I be certain if I had worked for him. My best wishes to his family.