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WHY I HAVE NEVER BOUGHT A DRUG COMPANY

Like the products they produce, drug stocks can be exhilirating to own.  Their growth can be fantastic and short-term gains are often through the roof.  Unfortunately, these companies can also be incredibly risky.  Investors learned that today when shares of Matrixx Initiatives imploded:

mtxx

Buying and selling stocks is hard enough as it is.  If you give me a company that makes paper (a relatively simple product) it will take me days or weeks to break down their balance sheet and thousands of other variables before I can decide whether it is a decent investment.  And even after that the odds of that stock outperforming its industry peers are still pretty low.   Give me a company that even doctors have trouble understanding and we’re talking about nothing more than full on gambling.  Investors in Matrixx Initiatives found that out the hard way today….

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