Friday, October 3, 2008

Selling without regard to fundamentals

There is a lot of indiscriminate selling in the broader markets, some of which may be due to hedge fund liquidation. In this environment, everything gets sold, even quality. One example today was Isis Pharmaceuticals (calls 5.7% of portfolio), which announced grants and contracts for the Ibis subsidiary. The stock fell in the regular trading session, however, as it was pushed down by a general downdraft in equities. This has happened to several other solid companies in recent weeks, including many with positive corporate developments. Until we see a return to equity inflows, all but the best (e.g. cash-based acquisition at a premium) scenarios will probably be sold.