GSK has a terrible chart but Buffett just took a stake - what do you think an investor should do?
This is an "opinion" question but I'd like you to make the most compelling case you can for either going long GSK or shorting it. Include why and make sure you address Buffett's stake in the company.
Best Answer
379 points
dustbusterz answered one year ago …
wel reading the answer above tells me there is some rick in this investment. however, one drug that might not make it through the FDA ,certainly isn't reason enough for me to walk away from a stock. If this company has solid management(and i"m sure they do) cause Buffett won't invest his money unless they have an A++ management team in place. I would do further research and get my own opinions as to where this company is headed, and i'd hold off till I could see how this Lawsuit (if there is one ) would affect them financially before I wade in. certainly, I 'd want to know that they have plenty of other drugs in the pipeline . I know a development like this can cause a sudden drop in share price(but that could provide an opportunity to buy a quality company at fire sale prices too).
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3680 points
MNSL answered one year ago …
I think following two events should take seriously with regard to GSK.
Berkshire Hathaway, the company run by billionaire investor Warren Buffet, revealed in filings late Thursday that it has made a significant investment in GSK.
After this investment there was a study that GSK’s rotavirus vaccine, called Rotarix, is associated with an increased risk of convulsions and pneumonia-related deaths in children taking it. It is reported that an expert panel at the FDA will weigh when deciding whether to approve the drug.
It is very difficult to suggest for shorting this stock. Definitely there will be some short term affects on stock prices due to latest developments.
Recently two research firm upgraded one to buy and another one to neutral. There is a long term value in this stock. However it is better to buy whenever market becomes weak.
Basically there is a demand for health products of this company throughout the world. In addition some of there investment ratios are quite attractive.
152 points
happyfeet answered one year ago …
An excellent question that requires an easy answer.If you are an educated investor and read a lot about Mr Warren Buffett and you become an apostle of this guru s style well close your eyes and buy GSK. He did the homework for you and his fortune was built by taking advantages of the misfortunes of others. If you buy the stocks he has acquired make sure you are aware of his next moves because at times he might add ,reduce to his position or even sell all his position.
The stock market is made of predators and preys and if you do not want to become a prey join the predators.
Happyfeet
