I spent the last post talking about stable biotech investments. The majority of these investments are in the pharmaceutical sector. In general, stable biotech investments are few and far between, as biotech investing is seen as one of the more risky investment strategies available. Fact is, many biotech firms fail: they fall quickly and fall hard. The flipside is that there is also a huge potential in biotech investment, but if you don’t have a fallback plan with other types of investments, don’t be surprised if you lose a mint.

What makes biotechnology such a risky investment is that the investor has to know how to read scientific reports. It’s not enough to read sales reports – for new biotech opportunities, these may not even be available. The trick is to not get too excited too quickly when you see that a drug or scientific discovery has passed a hurdle, such as a successful clinical trial. It can take the talents of statistician to understand a clinical trial: how many people are represented in the trial, what age, what gender, etc. Even a good sample size does not necessarily guarantee that a product is going to sell well or even work effectively.

If the stock market falls overall, you can expect biotech to fall even lower: it’s just that volatile. Also, it’s expensive to run a biotech company. Clinical trials cost a fair sum, so if the biotech company is testing out something new – and doesn’t have another high-performing product – the company’s going to take a major hit: and so are you. Though there’s a higher payout for stocks that aren’t rich with other investors, you are in greater danger of taking a fall. So riskier stocks are those companies that don’t have a diversified product base.

The Riskiest Biotech Investments

They say, “You can’t rush art.” Well, you can’t rush science either, so if you are an impatient investor who likes a simple form of investment, biotech is not the way to go. Some forms of biotech are wide open with limitless possibilities, but also seem to take forever to enter the mainstream. How long have we heard about “virtual reality” but there is no mainstream application of this technology. The same goes for something like Nanotechnology. It’s a hugely open field, but also in its infancy. You’re likely not going to see a return on your investment by next Wednesday. As fast as the world of technology moves, some investments could take decades to materialize, albeit for a whole lot of money.

Another shaky investment possibility is genetically modified food. Though the industry touts genetic engineering as potentially a way to solve world hunger, there is a limited – and dwindling – consumer base for these types of products. Put simply, there’s a backlash against GMO’s, as people become more health-conscious and more concerned about the safety of GMO’s.

Genetically-engineered medications are also problematic. Though they have great potential and the possibility of cutting down on clinical trials, the reality is that it can take 10 to 15 years for a genetically modified drug to gain FDA approval. Gene therapy has not yet panned out as a stable money-maker after being heralded as a revolution in medical biotechnology. Many gene therapies replace current drugs with a differing list of side effects, which has cut into their earning potential.

The trouble with biotech is that you cannot begin to predict how a new advancement will perform. So while in this day and age, green technologies offer great possibilities, there is the prospect that one green product will succeed and another will fail. This is true for every wing of biotech: pharmaceutical, agricultural, environmental, and so on. Not all biotech investments have the long-term prospects of nanotech. Some are plenty volatile in the short-term.

Writer Auditions – Author Henry Brown – Offer Your Feedback

If you read my primer yesterday on biotechnology investing you found out the basics of what comprises biotech and probably thought, “That’s great, but where do I put my money?” I’ll tailor this to those investors who aren’t independently wealthy or otherwise come to investing with a lot of capital. Those investors can’t afford to fail. Obviously, no one wants to lose money, but there’s a certain caliber of investor who’s more risk-averse than others, and because biotech investment is a particularly risky sort of investment, it can be a difficult prospect for a lower-roller investor.

Let’s take a look at the top biotech investments out there: good places to start if you’re an investor who’s a little gun shy. For every hot investment in biotech, there are countless poor-performers, so these stocks are a good way to get your feet wet. One thing to mention is that biotech is a pretty narrow field for investment. In no form of investment is “buzz” so important. At any one time only a few companies are performing or overperforming, so you’ve got to be extra careful.

Medical Biotech

Pharmaceutical biotech investing is the most stable of all the biotech fields, so this is where you should start. Though Genentech had some negative press recently which investors feared would send the stock tanking, it remained stable. Generally, Genentech is considered the standard-bearer for medical biotech investing, and the projections for the second quarter are healthy.

In pharmaceutical investing, cancer treatment is a big avenue for investment. However, there are some biotech companies, such as Northfield Laboratories, that focus on one type of therapy. Though this could be lucrative, you should be looking at a biotech firm that has a diversification in the medical field – as not all therapies take off and some can even be met with lawsuits. So not only should your own investments be diversified, the investments themselves should be diverse.

Genentech is a diverse company, and with the pickup of cancer drug Avastin, it is expanding at a healthy clip. Avastin is set to take in 0ver $660 million in sales. As mentioned, not all pharmaceuticals pay out to such a degree, so Genentech does have its share of underperformers, but this is balanced by the success of other drugs and new acquisitions.

Another solid investment is Biogen Idec, which had first-quarter earnings that exceeded expectations. Another pharma stock, Biogen is selling a lot of pharmaceuticals. Partly the profits are due to prices going up, but not entirely – this is true across the board for the big pharma biotech corporations. In a fairly unstable investment sector, you can feel confident that people are always going to want to find ways to stay healthy and new advancements in the industry are guaranteed.

Rounding out the top performers: Genzyme, aka Isis Pharmaceuticals, and Cephalon. Amgen has recently fallen on some harder times, as has Gilead Sciences.

Writer Auditions – Author Henry Brown – Offer Your Feedback

What on earth is biotechnology? Think of it as ways that man controls nature. That could be read negatively, but it doesn’t have to be. Biotechnology comprises all of the ways that humans try to overcome natural limitations be more cost-efficient. Examples of biotechnology are pest-resistant crops, new animal breeding, or pharmaceutical research. Certainly some wings of the biotech industry are controversial – such as cloning – but humans can “manipulate” nature in positive ways as well: producing more nutritionally-complete crops on a larger scale, aiding third-world countries. Really, something so simple as fermenting grapes into wine is a form of biotechnology, so biotech casts a wide net. It’s not all about playing God with nature and trying to turn a profit.

Of course, what’s a burgeoning industry without talk of profits. Biotechnology is also one of the fastest-growing forms of investment. Chances are that a new investor wants to get involved in the new developments in the biotech industry. Sure, investing in wine can reel in some money, but that’s not what is commonly referred to in biotech investment. True biotech investment is based around new technologies, such as gene manipulation. Some of these methods are already being used and some are yet to be discovered: which is why it’s so wide open for investment.

Where is Biotech Today

The new wave of biotechnology is mainly centered around health issues and extending human life, though agricultural advancements are also a large part of biotechnology investing. But whereas the issue of manipulating crops is fairly straightforward and understood, human life extension via gene manipulation has a much larger ceiling. For instance, imagine a product that would reverse aging – this would be hugely profitable in a short amount of time. So while agriculture biotechnology (green biotechnology) is potentially lucrative, medical biotech (red biotechnology) has even more potential, as so many techniques have yet to be discovered. Gene therapy is in its infancy.

Other forms of biotechnology are white biotech, which is biotechnology applied to industrial practices – such as creating and utilizing an enzyme that will break down harmful chemicals. Blue biotechnology refers to ocean and water-based biotech, but this type of biotech is less prevalent. Put that all together and you get the Bioeconomy.

Investing in Biotech

Like all forms of investing, there are riskier forms of biotech investing than others. Generally, biotech investing is higher risk overall than other types of investing – but again, like other investing, the higher the risk also means the higher the payout. Are you interested in stock investing or becoming a major venture capitalist in the biotech industry? There are penny stock options available that can be found through a broker, or you could do this yourself if you’re not a newbie. It depends on the investor, but you’re going to want to choose a biotech company based on location, industry, proof of concept, niche market, good history, and lucrative potential.

The less risky stocks are established companies, like large pharmaceutical companies. This is recommended if you’re also going to be investing in riskier ventures, as big pharma stocks are a more stable investment. Investing in biotech does take some significant research. A biotech research company is likely dealing with some very technical information. You want to make an informed decision about an investment and you need to make sure that a biotech’s company’s goals are achievable. They could rattle off a long list of technical details that sound impressive, but may actually be far-fetched. You need to be able to know what you’re reading, so a partnership with a science-minded investor may be necessary.

To get you started, here’s a list of the top 100 biotech companies, ranked by revenue. Here are the top biotech buzz stocks for 2008. As mentioned, you may want to invest in a start-up because these have the most earning potential per dollar (and also the greatest risk) but this of course means that the company does not have an established history. If this is the case, go with a biotech company run by people who have had proven success in the past. As with other forms of investing, diversification across industries and types of companies is recommended.

Check back tomorrow when I’ll talk about where to start investing in biotech.

Writer Auditions – Author Henry Brown – Offer Your Feedback

Paypal is becoming a more-ingrained part of the Internet. If you’ve ever been worried about security problems using Paypal, keep reading. The service is pretty invaluable, but it’s also had some ups and downs.

What exactly is Paypal: it’s a online payment system allowing payments online without having to deal with money orders, checks, or inputting your credit card on a new site. More and more vendors are incorporating Paypal into shopping carts. For vendors, this is a cheaper and easier system than creating a merchant account for credit card processing. For spenders, it’s easier to have one type of payment system. Paypal users enter in a credit or debit card number and the funds are taken out that card. This is a free service for the majority of users, but people with a very active account, such as top eBay sellers, will need to get a higher-end Premier account to process additional transactions.

Paypal also accepts payments for individuals, rather than businesses. Each user can be paid through an email address – though basic accounts are limited to 5 debit card transaction and $500 per month. Once the funds are uploaded to Paypal, the user has a number of choices. Most commonly, users transfer these funds directly to a bank account. This is free, though a bank could charge for the transfer.

There are some fees associated with Paypal – but these are normally associated with online vendors selling a product, rather than people making purchases. There can be increased fees depending on the country of origin, type of currency, and the amount of money sent. Currently, Paypal has 164 million accounts and operates all over the world in 190 markets.

Problems with Paypal

Paypal is not without its problems, as exemplified by the site, Paypalsucks.com, which is on a crusade against the money transfer company. Their main complaints against Paypal are:

1. Limited fraud protection. Unlike credit cards, if someone uses your Paypal account, you could be liable to those charges. However, if the Paypal account is connected to a credit card, you could dispute a purchase directly. In addition, Paypal offers increased anti-fraud and chargeback protection now than when these types of charges were first made.
2. Paypal is vulnerable to identity theft, such as phishing scams, in which scammers set up dummy, look-alike sites to get financial information. If you’re the victim of one of these scams, Paypal has limited protection for users.
3. It is at Paypal’s discretion to freeze or unload your account if they feel there has been unethical or fraudulent activity. This has happened to people who were entirely innocent, or they were penalized because someone paid them with a stolen credit card, which is entirely out of a person’s control.

This post doesn’t mean to shill for Paypal, but none of these issues appear to be too drastic. Take #2: any web surfer should be well aware of phishing and spam email schemes, so the surfer does bear some responsibility. A couple of years ago there were a lot of spam Paypal emails phishing for info, but these have fallen back a bit recently. A way to avoid #3 is to transfer funds as soon as their received in the account. However, if you’re using those funds to buy things, rather than attaching the Paypal account to a credit or debit card, then you’re going to have to leave the funds standing. The recommendation: attach the Paypal account to a card with some consumer protection.

Finally, a MAJOR caveat to those complaints. The PaypalSucks site links to a Paypal alternative called National Merchant Bancard, so there is something slightly duplicitous about the site itself. That said, the site does raise some issues that you should look out for. Generally, you should feel pretty secure using Paypal. The value in Paypal is that it is actually more secure: instead of plugging in sensitive financial info on an unverified website, you can pay through Paypal and feel more secure about the transaction.


Writer Auditions – Author Henry Brown – Offer Your Feedback

Writer Auditions – Author Henry Brown – Offer Your Feedback

Here’s a little something about me: I was an expert on credit cards before I was an expert on my own credit card situation. A few years ago, I got hired to write a series of articles about credit cards. I was deemed the credit card expert and I wrote anything and everything about credit cards: articles about how to get a low APR on a credit card, the best way to transfer a balance, ways not to be stupid when you use your credit card, etc. Here’s the rub: at this time I was $15,000 in credit card debt on a card with high finance charges and a terrible APR. A sham, I was. My dirty little secret. I was a writer in need of work who’d written about a bevy of other financial products, so I thought I’d try my hand. But I was deemed an expert publicly before I was a good organizer of my credit privately.

That’s my confession. Does this mean you can’t trust a word I say? I don’t think so, because even though my own credit card situation was fairly bleak during that period, I’d like to think that the advice I gave out was pretty thorough and helpful. Especially to myself – because soon after writing a litany of advice to people facing high credit card debt, bad credit, and all of the other credit problems that becoming more and more common, I followed my own advice: transferred the debt to a series of balance transfer cards with long-term low interest (12 months instead of six), as well as a decent APR after the year was over. I also made certain that I never added a dime to the balance transfer cards and just used them for the transfer.

Finally, I knew my window for paying 0% APR was short-term so I wanted to pay well above the minimum during that period. That meant budgeting like a madman, down to every cup of coffee I bought, and put that money towards my credit card debt. Not easy, by any stretch because the end result was inevitably that I was spending more every month on three separate credit card bills, as opposed to one. Good news, though, was that as soon as a transferred a fair portion of my credit card balance from the terrible credit card to the new cards, I was able to negotiate to get better terms on the card. Credit card companies hate if your balance is over 40% of the limit, so I was rewarded for getting the card under $10,000.

All this was necessary because bad credit card debt is a terrible weight to bear. You always feel it there, even if you like to believe that you’ve pushed it out of your mind. It was no easy task, believe me. I mean, if I could afford to easily pay balances on three credit cards at once, I wouldn’t have fallen into the kind of debt I did (new computer, new tires on my car, eating out, no REALLY dumb purchases). But basically I was running in place every month – maybe shaving some money off the balance, but nothing significant. I felt guilty for putting it off for so long but now its taken care of and I can claim to be an expert on credit cards from direct personal experience!