4 Undervalued Bargains To Buy In Biotech

“Bravery is the capacity to perform properly even when scared half to death.” – Omar Bradley

To say the markets have a had a rough start to 2016 is like saying the playoff game between the Arizona Cardinals and Green Bay Packers Saturday was an entertaining match up. It is damning with faint praise or in the former’s case not acknowledging the fear that has gripped the markets in the opening weeks of 2016. The S&P 500 is already down some 8% year-to-date and the Nasdaq has dropped more than 10% in the worst opening two weeks to start the year in the stock market’s long history.

Many sectors are doing much worse than the main indices. Energy and commodity stocks have corrected more than 60% since oil began its long painful decline in the summer of 2014. Those pullbacks have accelerated their declines in early 2016 with major miners like Anglo American selling at all-time lows. There is also talk about some major bankruptcies in these names if commodity prices continue to remain in the doldrums in coming years.

Not as badly as hurt, but still in “official” bear market territory are myriad other markets and sectors. These include Europe and China as well as domestic small cap stocks, high yield bonds, biotech, and transports to name a few. In short, it is one ugly market that some investors feared might be a replay of the 2008/2009 debacle.

My regular readers know I was far from sanguine going into the New Year and had built up my cash allocation in my portfolio to 30% as 2015 came to a close. However, as much as a skeptic as I am I don’t believe this is a 2008 scenario. It feels more like 2011 when events in Greece rocked our markets temporarily or the Asian financial crisis of the late 90s. The banking system is on much firmer footing than it was in 2008. In addition, banks have much lower exposure to the energy sector than they did to the mortgage market prior to the financial crisis. In addition, job growth remains strong as does the domestic auto and housing markets.