AverageJeremy

My two cents about the Fed and other things....

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Well, I guess since everyone else has stated their opinion about the Fed rate cut I might as well state what I think as well. I certainly did not expect the Fed to cut the rate at all, let alone 50 basis points. I am concerned that the Fed has now thrown the baby out with the bath water with this move. Inflation is already above the Fed's 1% to 2% comfort zone for the year and the dollar is extremely weak and by lowering the Fed rate we are not helping matters for the long term. I think that Representative Ron Paul asked a very valid question when he asked "My question is going to be around the subject of how can it ever be morally justifiable to deliberately depreciate the value of our currency?" He was asking Mr. Bernanke about moral hazard. I would like to thank Paul for asking this question for the hundreds of millions of pensioners, savers, poor, fixed income beneficiaries, laborers, gasoline, bread, milk, and egg-buyers who weren't able to ask Mr. Bernanke why he - like every Fed chairman before him since 1913 - screwed them for the benefit of the top 5% of the population of this country. This country could certainly use more politicians like him to ask these difficult questions. There was an excellent article on MSN the other day by Jon Markman about the possibility of an epic bear market. I highly recommend reading it. He gives us some great insight on where the market may be headed soon with his interview of Satyajit Das, a credit-derivitive insider. Go to http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx.

Well, enough of my ramblings about the Fed and the rate cut heard round the world. It's time for me to discuss another of my stock picks and why I chose it. This week I am going to talk about Isis Pharmaceuticals (ISIS). There are several reasons that I picked this stock. Isis develops "antisense" drugs for cancer, diabetes and heart disease, along with drugs for allergies and HIV symptoms. Isis is another buyout canidate that I chose based on Pfizer's need for a quick fix to make up for the loss of their new cholesterol drug Torcetrapid.

Isis has strong intellectual property patents on its technology, which uses small, artificially created DNA strands to bind with and eliminate the RNA encoding that cause disease. Isis was
the first company to bring an antisense, the microbiology term used for the RNA-binding
strands, drug to the market (in a partnership with Novartis). The company's Vitravene is FDA approved and treats blindness in AIDS patients.

Isis has a large number of drugs in its pipeline, with a diabetes drug, one for ulcers, a second for
multiple sclerosis and a cancer drug all in Phase II testing right now. And of course, there's the
company's cholesterol drug, which is also in human trials. Pfizer could be looking to Isis'
cholesterol candidate to replace the time and cost it spent on its failed Torcetrapid. It would be
the fastest solution for the pharmaceutical giant.

I don't really have a target sell price but if a buyout of the stock happens I would expect an excellent return on my investment in the next 6 to 18 months. Right now the stock has gained close to 50% in 7 weeks. As always I keep a 20% to 30% stop loss on all of my stocks depending on the amount of actual losses and the risk I'm willing to take that the stock will rebound. I try to keep stocks for the long haul unless they look to have too many problems keeping the stock from performing well. That is why I recently sold my shares of Qualcomm (QCOM). Qualcomm is a solid company that makes chips for cell phones and other electronic devices but due to their legal woes I felt it was best to cut ties with the company until they can get beyond the numerous patent infringement lawsuits they are currently involved in.