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Financial Post
July 19, 2000
William Hanley whanley@nationalpost.com
All That Glisters
Those people holding biotechnology stocks may or may not want to know what
Bob Hoye and his colleagues at Institutional Advisors in Vancouver have discovered in poring over their charts: The American Stock Exchange biotech index 1999-2000 graph bears an uncanny resemblance to that of gold in 1979-1980.
For those too young to remember, gold peaked over US$800 in late 1979 after a parabolic rise. It consolidated, then made three major drives to peak at just over US$700.
That fits right in with the biotech index's pattern, which Hoye suggests is right at that 700 peak. "This group has been phenomenal, both in its parabolic rise to early March as well as in its recovery to date," he says. "However, it's a market mania and very similar to previous examples. Whether the conviction is in a commodity or stock, the signposts of emotional excess have been reliable." |
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