LOS ANGELES -- On Monday April 26, a panel moderated by CNBC anchor Maria Bartiromo including executives and leaders including Michael Milken convened to discuss Health Reform in a session focused on "Prevention and Cures". The primary focus of the discussion was the need for government policy and health reform to address "wellness" and chronic diseases such as diabetes. One of the conclusions from the panel is that the healthcare reform recently been enacted into law is "uneconomic" and has put prevention and wellness on the "back-burner" even though unhealthy living represents a major  cost to society. A lingering concern is that we are a few years away from price-setting of medical products and services.

  Although we are still technically in a bear market for early-stage biotechnology due to lack of speculative funding from both VC’s and investment banks syndicating IPO’s, many public companies have been doing well. As a result we have a more bifurcated market with larger caps stable or growing and smaller caps in a funk. Nonetheless there is plenty of money on the sidelines that will drive stocks of companies with compelling products and technology. At the recent Rodman and Renshaw Investment Conference in November of 2009  the buzzword was “cash runway” as smaller cap companies with weak balance sheets need to retrench until new money comes back into the market. Nonetheless, Rodman continues to fund PIPES in the biotechnology sector as technology is progressing and deals are being done. Negative articles and “hand wringing” abound in the biotech market citing clinical trial failures, political concerns, a dearth of funding and a “breakdown of the business model." But these critics miss the point: the universe of companies and universities in the biomedical sector are trading and investing in R&D programs that result in drugs, diagnostics and services with the objective of improving healthcare.

Brownie Boy has won! Scott Brown, Republican, is now a U.S. Senator, having won the special Massachusetts election. Democrats seem mystified about how a dark-horse Republican can take the senate seat of the late Ted Kennedy, one of the greatest liberal icons of all time -- in one of the most liberal states of all time. I'll tell you why: It's the cheesecake (see below, if you don't know what I'm talking about). What does it mean for the markets? The conventional wisdom is that the market will rally whenever Republicans take over because they're for business and lower taxes. I have some news today: the market is not rallying. It's getting whacked. This is disturbing on several levels. What does it mean? I think it means the market knows that it needs the government printing presses to keep it afloat, and without further government largesse, it may just all fall apart. The fact that Brown has won and reduces the Democrat's grip on the Senate by one vote means less chance for healthcare, less chance for more stimulus, and less chance for more debt. The market senses this, and wonders what it would be like to "fly naked" without the support of a U.S. government that looks almost certain to descend into gridlock. Scott Brown. But not the Scott Brown that won the Massachusetts election. The Republicans appear to be elated, wagging their fingers at Democrats, saying, "I told you so," dancing on the tables with lampshades on their heads. But why, exactly, I'm not sure. Sure, they might kill healthcare, but then what? The state of the U.S. Congress is a mess. The only thing that either party knows how to do is toss angry rhetoric at the opposition and then sign a huge pork bill for their state. Let's not get carried away. It's just one senate seat. Yes, that's enough to stop a filibuster, but not exactly a majority. And the market selling off on a Brown victory warns us to be careful.  Why's that? It's because the market knows that we're in a raging recession, unemployment is at 10%, we have huge multi-trillion-dollar deficits, and Scott Brown is not going to change any of that -- even if he does look good with no clothes on. Scott Brown the new U.S. Senator.

Nobody said investing, or trading, was easy. You can do all the work and the world and get the story right but still have a fatal flaw -- timing -- that screws things up. Cubist Pharmaceuticals (CBST) is a case in point for myself. Good company, making good progress, but trying to time the stock will drive you mad! The company announced on Monday that it met Wall Street's revenue forecast with $560.3 million in revenue, up 30 percent from a year earlier. It rallied on the news and is now trading at around $19, even though in the past few monts it has sold off as low as $16.  The company's primary product is an antibiotic called CUBICIN.  Here's the catch: Although it released the revenue numbers for the full-year 2009, it has not released its earnings yet. Those are due out on January 21. Strange, yes. This company comes up on a lot of value screens because it is a growth company with a relatively low P/E (12 based on next year's earnings). I want to buy small growth stocks with 30% growth rates in a recession, especially if they have P/Es of about 12. Cubist has some other impressive numbers: It's profit margin is 34%, it's Return on Equity (ROE) is 60%, and it has a five year growth rate of 159%. If you look at the stock chart above, you can see that the tricky part in this stock is picking your entry point! It's got a wide 52-week range of 13.81/23.40. It can sell off violently (20%) in a matter of days, or rally equally as powerfully. I must admit that I have traded this stock horribly and gotten chopped up in the past, but I'm looking to rectify that by going from a trading position to a longer term position. To correct my past abuse of this stock, I have resolved to build a long-term position. Eventually, if the company can sustain even 20% growth in 2010, the stock will break out. It's simply too cheap. Analysts estimates for 2010 have gone from 1.22 to $1.54 in the past year, according to Capital IQ, yet the stock has done nothing but chopped around. I think this is a $20+ stock.  Even if the earnings are disappointing next week, I would probably buy more on a correction down as low as $16, because I think it's rare that you find companies with these kind of growth numbers this cheap. My stop is at $15.50. (Disclosure: Long CBST)