In the world of upstart pharmaceuticals and healthcare companies, timing is everything. These firms often struggle for an extended period of time before becoming profitable, but when they see success with a new product—or even clinical trial results suggesting a new product could be on the horizon—they can experience huge rallies in a very short period of time.
While timing the market is typically a losing proposition for investors, there is something to be said for tracking firms that other investors are interested in. Investors exercising caution should beware of the risk of entering a position in a trending stock too late after it has already peaked.
