With the major stock market indices at record highs, the average guy who doesn't know much about the market is sure that all investors are getting rich. I'm certain that most of you are well aware of the huge divide between large Cap stocks and the rest of the field. Nowhere is this more apparent than the Biotechs, which by and large have had the hell kicked out of them.

This is particularly ironic in view of the fact that this will be a record year for the number of Biotech drugs receiving FDA approval. It is particularly disgusting to see the Internet stocks go through the roof, when some of them will need to sell their services to everyone in the world in order to be profitable. Biotechs are pretty immune to the goings-on in Asia and offer potential profits to those with the guts to buy them, and more importantly, the guts to hold them.

This is a great time to get into these stocks, but it is certainly not for the faint-hearted. Most of the group are far from their highs, and a number of them are great buys in my judgement, as long as your investment time horizon is at least 3 years. To illustrate how beat-up these stocks are, I am listing those stocks that are reasonably priced and have promising drugs under development. Some of these are not strictly Biotechs; but they are very interesting as they are either into genetics, or some unique drug or therapy. The following list shows today's close, and the 52 week low and high. I have indicated which ones I own with an asterisk (*)

As it is not possible to predict with great accuracy which stocks will be the big winners, I have created my own Biotech mutual fund of sorts. There is no substitute for doing your homework, but it should be rewarding. The Biotechs are fraught with danger, but in my judgement their potential is great. Stay tuned.

The Market Pro - July 20, 1998