Great ideas rarely run smooth. Geron, a biotech with disruptive ideas that could redefine medicine and health, is probably years from proving itself, except that it suddenly looked like it would, just as suddenly looks like it won’t, and yet no one can predict the future.

How’s your risk tolerance? Mine’s been exercised so much I think I’d qualify for the investor’s Olympics. Few should attempt what I do. I’ve even had doubts myself. The buzzword version of my style is small cap startup LTBH. Want details? I wrote a book about that.  The short version in words is long term buy and hold in small companies with big ideas that may not be worth much when they start but could be worth incredible amounts when they succeed. Patience and acceptance are required. Research is a good idea too.

This seems to be a critical year for the markets and me. For several years the markets were scared, then timid, then began their confident climb (that may have been fueled by quantitative easing, and marginal managerial relaxation.) Profits are up. Corporate cash is accumulating. Big investors were buying big positions in big companies. The small companies languished for lack of financing and their customers’ adherence to convention. Things are changing.

Geron had some stellar news that almost tripled the stock. It’s new drug looked like it treated blood disorders and possibly even returned damaged bone marrow back to health in some cases. Then, the FDA gave them a call, a verbal communication, to place a hold on Geron’s clinical trials. The livers of some patients were experiencing abnormalities that might be chronic if exposed to the drug for a long time. “Verbal”, “some”, “abnormalities”, “might be”, “if” are the cautionary words being used that could soften a harsher truth or could be an overreaction from an overly-cautious regulatory agency dealing with technologies that are revolutionary. Dendreon has similar clinical and corporate upsets during its tests of disruptive (though eventually clinically successful) technology. Geron’s stock dropped 60%.

Those quick with math will already know what I’m about to show. GERN tripled, up over 200%, then dropped just as much by falling about 60%. At the end of June 2013, GERN’s market cap was $196,000,000. With the autumn news it jumped to close 2013 at $611,000,000. Last week it dropped back to $236,000,000. Yes. After GERN’s bad news, the stock is up 20% in less than a year. Rather than try to read anything into the specific numbers and percentages, I take the action as proof that the market’s error band is enormous. Especially with startups there is rarely a consensus of a stock’s value – despite strong declarative statements. Check around. There will always be an opposing, yet equally confident opinion.

Because this is such a critical year for the economy, my stocks, and me I decided to add a quarterly review to my semi-annual reviews. (Some of the data I’ve referred to can be found in my mid-2013 and end-2013 reports.) The news from GERN, MVIS, AMSC, and RSOL convinced me to do a quick check.

• AMSC (market cap was $0.106B is $0.142B) up 34%
• GERN (market cap was $0.611B is $0.236B) down 61%
• GIG (market cap was $0.033B is $0.038B) up 15%
• MVIS (market cap was $0.042B is $0.075B) up 79%
• RSOL (market cap was $0.110B is $0.1151B) up 37%

Even with a “down 61%” a portfolio can do well with so many other large “ups”.

• AMSC had good news about its court case in China, which is far from resolved, and if resolved in AMSC’s favor could be a very good catalyst.
• GERN had bad news, which may just be cautions that are eventually outweighed by impressive positives.
• GIG really had nothing to report – except that their disruptive technology may be pushed to even more impressive levels.
• MVIS had – something – to report. And while there is great debate about what they actually said, the optimistic picture continues to be very optimistic.
• RSOL even changed their trading symbol to RGSE as they became a player in the solar energy industry consolidation, which is also an expanding market.

None of my stocks have released the key story that propels them to my valuations (present value of future revenues discounted for risk), and yet they’ve seen impressive increases. We’re still a far way from my second semi-retirement, but it is closer.

My portfolio has been in a rough phase. GERN just hit a rough phase. My dreams of relaxed and easy retirement hit a rough phase. And yet –

How about you? Could you handle the occasional very rough “Ouch”? Listen to your answer to that. You may have just told yourself something about how you do or do not want to invest.

Ouch. Ah, it’ll get better.