Ebb & Flow

Wall Street has an adage that it's best to take some skin out of the game during the summer months, when trading volumes diminish. But biotech investors adhering to that theme would have missed some pretty robust summer rallies going back to 1993. And if the tech markets are poised for a rally - a scenario to which many of the pundits had been warming prior to last week's tech selloff - biotech investors should double down rather than lighten up on the bet.

In the past two summer sessions - as measured by the period between Memorial Day and Labor Day in the U.S. (the last Monday in May to the first Monday in September) - the BioCentury 100 has doubled the performance of the NASDAQ Composite. Not that two years make a trend, but the gains are worth noting. Last summer, the NASDAQ's 32.1% upswing was eclipsed by a 67.2% move in the BC100. And in 1999, the BC100 moved up 36.8%, more than double the 15.1% move by the NASDAQ (see "Summer Trading"). ...