Dear Mr. Berko: I am 32 and recently got a doctorate in French history. After 14 years of attending classes, I will apply for my first ever job at UCLA, which would pay me about $55,000 a year. But first I will take nine months to go on a needed vacation and live with three friends in Marseille. I have about $173,000 in student debt but managed to save $21,000 while borrowing. While I’m in France, I’d like to invest $10,000 in biotechnology stocks because my sister, a high school science teacher, says biotech stocks could triple in a year. I want to make money fast. Do you have any recommendations for low-priced biotech stocks?
I also need to find a brokerage firm. I’ve searched social media — because they have interactive, personally shared, honest, community-based, non-commercial information — for the best brokerage firm. I got five recommendations — namely, TD Ameritrade, Charles Schwab, E-Trade, Merrill Edge and Fidelity. Please advise and tell me which is the best firm to invest with. — PD, Portland, Ore.
Dear PD: Something’s terribly wrong here. How can a system allow you to accumulate that much debt? And how can you justify owing that much money (unless you don’t intend to pay it back) for a job that pays $55,000 a year? Meanwhile, never ever use social media for important financial information. In the past several years, social media have morphed into a public display for personal perversions and become a marinade for the human brain and a cause celebre that revolutionizes rather than evolutionizes changes in the landscape of our American culture.
It doesn’t make a tinker’s dam’s worth of difference which brokerage you use, because there’s not an iota of difference among those five firms. They execute trades equally well. They’re all adequately capitalized. All have good investment tools, provide competent stock research data and issue easily readable monthly statements. Their trading costs are nearly identical. Fourteen years of college may have taught you what to think, but you seem to have failed to learn a more important skill — how to think. You should pick the broker, not the brokerage, because the broker is the person whose knowledge, wisdom and experience will help you select the best investments for your goals. For example, Merrill is a darn fine firm. However, it, like all others, has its share of incompetents with room temperature IQs, and if you stand close enough to them, sometimes you can hear the ocean roaring.
Because I know little about biotech stocks, I called Swami Sammy Sosa, who has always been a font of information for me. Swami Sammy was Bernie Madoff’s personal golf caddie and claims to have a doctorate in finance from the University of Samoa. His biotech recommendations are as follows:
Sangamo Therapeutics (SGMO-$14.75) is into groundbreaking genomic therapies using proprietary platforms in genome editing, gene therapy, gene regulation and cell therapy. Swami Sammy and Piper Jaffray think this could be a $30 stock by 2019. ImmunoGen (IMGN-$5.50) is engaged in the discovery of monoclonal antibody-based anti-cancer therapeutics using its proprietary antibody-drug conjugate technology, which binds to a target found on tumor cells. Swami Sammy and RBC Capital Markets think this could double in the next 19 months. Finally, Neos Therapeutics (NEOS-$9.50) is a favorite of Cantor Fitzgerald and Swami Sammy’s. It develops, manufactures and commercializes products for the treatment of attention deficit hyperactivity disorder, using various delivery technologies that improve the efficacy of ADHD drugs. This could be a $17 stock in 18 months. You could invest $3,300 in each, and if you used Schwab, the total commission costs would be $15.
Be mindful that these issues are horribly speculative and may decline in price before they rise in price, if they rise at all. I think you’d be nuts to speculate with these issues, even though each is prominent in the growth portfolios of BlackRock, Goldman Sachs, State Street, Vanguard, Fidelity, Morgan Stanley and others. Biotechnology is a volatile sector, and fast money will be made and lost — mostly lost. But you’ve nothing to lose, because that’s not your money.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.