Friday, March 23, 2007

Money to be Made

Amgen (AMGN) is getting beaten up again today. It was released that they will discontinue work on a cancer drug that they were hopeful on. So you see Amgen and Genentech (DNA) get hurt on the news. Imclone (IMCL), who is working on a competing drug, is coming out great on this news. But as an investor, or a trader, you've got to look at this drop in Amgen as an opportunity. It is trading 4 to 5 percent below its previous 52 week low, and it is true that this news was a setback, but you have an opportunity to step into a seriously good company at a serious discount. That is how value investors like Warren Buffett have made fortunes in the market over the years. One of my favorite Buffett quotes is "Be fearful when others are greedy, and greedy when others are fearful." In the case of Amgen, others are fearful. I'm not saying that this company perfect. They decreased their stock buyback in FY 2006, which I didn't like to see. But from a fundamental standpoint, they are a great company, and I see some serious upside with a purchase at these levels.

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