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I've read some books and other resources on value investing (like this question)and fundamental analysis, but now I want more information on a specific sector: biotech. Is there a better way to start learning about a specific sector besides just googling stuff? I looked in the section of an index fund (IBB) prospectus that has things to say about the "principal risks", but that's just a couple of paragraphs.

Do I really just need a degree in biology or are there ways that investors who know more (maybe like people here) start learning about a specific sector before investing? I don't want investing recommendations because Im just looking for sources of info. Can anyone point me in the right direction whether or not you actually invest in biotech? Does anyone here know about the biotech sector?

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The important piece here is not necessarily understanding intimate details of biological engineering per se, but rather understanding how the business operates as a singular unit. It is also important to understand the business case for a firm, the evolution of demand for its products/services and the cost of its revenue.

To understand a particular sector of the market, you should begin by studying how that sector interacts with and is influenced by the larger market and economy as a whole, both domestic and abroad. From there, you should study individual companies and again see how they interact with one another, the sector, market, etc.

Many biotech firms have a different offering and meet different business and consumer demands. Some are near term solutions to existing problems, some long. It is important to see how the firms collectively interact with the consumer base and then differentiate on an individual level.

  • Hmmm ok. What would be included in "cost of its revenue?" Just the R&D costs and general business costs (capital expenditures, salaries, etc.)? – Michael A Nov 2 '13 at 18:20

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