2Q Financial Markets Review: Identifying momentum

In the 1980s and most of the 1990s, investors looking to generate 15-plus percent, beat-the-NASDAQ-type returns didn't have to look much beyond the "A-B-Cs" of the industry - Amgen Inc., Biogen Inc., Chiron Corp. and the other top tier players, such as Genzyme General, Genentech Inc. and Immunex Corp. As the first profitable biotech companies, this group had a certain level of consistent momentum.

However, with the growing maturity of some of the top tier products, generating above average returns isn't as easy as picking the "ABCs." Indeed, the trailing 18-month performance of BioCentury's top tier companies - those valued above $3 billion - has been mixed. In fact, investors had less than a 50-50 chance of making money by placing bets on the 17 companies that were in that group as of Dec. 31, 1999...