Answers - Finance

It always amazes me how much stock market investors resemble horse track bettors. Some are very conservative, willing to trade low returns for relative safety. Others bet with both hands, looking for the big score. In this article, I'd like to int

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

roduce you to a few characters I've met at racetracks. Then we'll see what they can teach us about investing.

CONNIE CONSENSUS - Connie is easy to spot. She's the lady with the table buried in paper. Connie thinks picking horses is too com

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

licated for her to learn, all those numbers and such. So she relies on the experts - all of them. Before she sits down, Connie buys all the tout sheets. She adds these to the predictions from the daily newspaper, the handicapper at the track and t

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

he Daily Racing Form. If they all agree on one horse, Connie heads for the windows.

As you might expect, Connie wins more often than she loses. Too bad the horses she wins with carry the shortest odds (smallest payoff) at the track. It takes Conn

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

e a lot of winners to make up for her occasional losers.

Connie takes the same approach to investing. Before she buys or sells anything, she checks the money shows on cable TV, as many financial papers, newsletters and magazines as she can get he

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

hands on, and then asks her broker. By the time Connie is ready to make a move, she's acting on old news. She may pick good stocks, but she's so late she misses most of the gains and takes most of the losses.

ARTIE ACTION - For Artie, bei

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

ng in the game is more important than winning or losing. Artie just has to bet every race. Ask him how he did, and he'll recite his list of winners for you. Many days, Artie will tell you he won $200. Add up the tickets on his table and you'll fin

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

it may have cost him $350 to do it. Artie doesn't care that he lost $150, as long as he has new winners to talk about.

Artie plays the market the same way. He's in and out, up and down. He wins some and loses others. Talk to him and you'll think

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

he's a genius. Ask him about losers and he can't remember any. In fact Artie thinks he's so good, he's thinking of becoming a day trader. He generates so many short-term capital gains and losses, he has a love/hate relationship with his accountant

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

.

ED EXOTIC - Ed loves the exotic wagers. Daily Doubles, Exactas, Trifectas, Pick 6 all get his blood moving.They all promise huge payoffs for small wagers. Ed's not dumb; he knows the odds of winning any one wager are pretty slim. He make

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

up for it by betting a lot of combinations. You can pick Ed out of the crowd after any race. He's the one busily shuffling through a deck of betting tickets to see if he won.

When Ed decides to invest, he takes the same approach. He buys a bunch

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

of penny stocks, a few junk bonds, maybe even takes a flier on an IPO or two. He has a stack of buy and sell confirmations on his desk. It takes Ed an hour to answer one simple question - "How ya doin', Ed?".

"CYA" CHARLIE - Charlie never

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

loses - much. And when he does, it bothers him to death. You see, Charlie is much more interested in _not losing_ than he is in winning. In a two horse race, Charlie will bet on both horses. Win and Place.

When it comes to investing, Charlie is a

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

real belt-and- suspenders kind of guy. FDIC-insured savings account? Yup, even though it only pays 2%. U.S. Savings Bonds? Charlie has those, too. Bought them for a walk on the wild side. What Charlie hasn't realized yet is that, in his quest for

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

otal safety, he takes a big risk of being left behind.

Now that you've met our cast of characters, do you see yourself in one or more of them?

Are you like Connie, who likes the idea of winning, but doesn't trust herself to make her own decision

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

s? Your task is to learn enough to at least choose an advisor you can trust. Lacking even that, go out and buy a good no-load index fund. That way, you can take advantage of the collective knowledge of the whole market.

Are you like Artie, who li

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

es being able to talk about his latest "hot deal" more than making maoney on "boring" investments? Your task is to put most of your money into vehicles that will earn you the returns you need in relative safety. Go ahead, take 10%, and go have fun

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

Are you like Ed, who has so many irons in the fire he doesn't know if he's ahead or behind? Your task is to simplify your investments, concentrating on the ones you understand and have real confidence in.

Are you like Charlie, so afraid of losi

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ng money that you lose out on higher returns? Your task is to understand that you are trading capital risk (risk of losing money) for inflation risk (risk of losing buying power). Find a mix of investments that will generate higher returns and sti

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

l let you sleep at night.

Whether you choose to take up these tasks is totally up to you. You are in charge of your financial life. Ask yourself one question, and act accordingly.

Do you want to make money, or would you rather fool around?

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Answers - Investing: Do You Want To Make Money, Or Would You Rather Fool Around?

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