So that happened. More correctly; so, that finally happened.
“Geron (GERN) Gets ODAC Votes for Blood Disorder Drug”

Disclosure up front. I own shares of GERN. I’ve owned shares of GERN since 1999. I am a fan of LTBH, Long Term Buy and Hold. (Details in my book, Dream. Invest. Live.)

When I bought the stock, I thought Long Term referred to years. Today, I read quotes in online forums where someone proclaims themself a Long because they held a stock for months. The concept of decades doesn’t seem possible to someone who has only been investing for a few years. After about 25 years, Geron (GERN) finally received some significant, positive, but not-yet-quantifiable news – except in its stock price. Within a few minutes of Thursday’s announcement after hours, the stock was up about 80%. Success?

(For those unfamiliar with Geron, aka GERN, I’ve been writing about the company for over a decade. There are links below to help summarize my opinion of the company and its technology.)

Step one: Celebrate the good news. Even for people who aren’t invested in the stock, biotechs can announce progress in treating ailments and injuries. That’s worth celebrating, especially for patients needing treatment. For people who are invested in the stock, there’s usually that price appreciation to celebrate, too.

Step two: Breathe, relax, repeat. After the emotional high, remember this is an investment which can benefit from some rational thought, and possibly responsible actions.

Step three: Decide what this really means in the short term and the long term.

Okay. I raised a toast last night, so step one is complete. I watched the stock during the regular trading hours, which let my rational side kick in.

In the short term:
This is great. I’m not going to complain about an almost doubling within a day. This is better than normal (#massiveunderstatement), but GERN has seen spikes of 140% before. I’ve experienced other stocks rise 240% in a day, and know of one that hit 640% in a day. And even that understates the nature of the rise. News items can be discrete events where the rise happens in minutes. The rest of the day may be simply details as the market collectively decides what the news is really worth.
Just look at that stock chart.

Until a small company reaches such a milestone, it is difficult to estimate the company, and therefore the stock’s, value. That shifts the points on that line on the chart. Rational estimates move them one way. Market sentiment moves them, too. Some will buy or sell based on market potential, optimism, and pessimism. Some trade just to trade, ignoring the goods or services provided by the company. They just watch numbers go up and down, then they (mathematically) guess where they are going next.

In the longer term (looking forward):
What’s the potential for the company? How large is the market? What’s the competition? How much is it needed? The calculations get more complex and are more likely to be grounded in analyses than gossip. Will this make this company viable and sustainable, and hopefully, profitable?

And then here comes the multiplier. If the treatment works for this ailment, will it work for others? If so, how far can it go? That can take longer to estimate.

In the long term (looking backward):
For where the stock is now, compared to when the stockholder bought it, has the investment had a good enough Return On Investment? What’s the stock price for personal breakeven? What are the personal long-term goals?

The stock has already hit the cocktail party criteria. It is easy to brag about holding a stock that went up 90% in a day. Spread the cheer. Cheers!

But, did it make sense to have bought it then? If so, great. If not, how much more does it need to go to reach that Return On Investment target, and what are the chances it will get there or higher?

In the present:
Geron has issued so many shares of GERN that the power of those initial shares is greatly diminished. I’ve bought several times, so each has its own ROI targets; but, I don’t worry those details. A stock has this value now. Except for taxes, it doesn’t matter when it was bought. What are the likely value and limits that the stock will have in the next few months or years? The next few days and weeks will likely be chaos. What’s the longer picture?

In the near future:
The celebrations and such are anticipatory. As I understand it, this was the decision of an Advisory panel. Any full FDA approval isn’t expected for months, and is not guaranteed. Risk remains. Risk also remains after a treatment gets approval, but that’s normal biotech business.

History:
A lot of the near-term chaos will be fresh investors and long-term lurkers deciding to buy in now. They’re playing the strategy of purposely missing the first dramatic rise because they’ve used their money somewhere else in the meantime. I’m bad at guessing when that first dramatic rise rises, so I buy in early. My style is more relaxed and patient. For the last 25 years, Geron has had opportunities to announce breakthroughs, and I didn’t want to miss them. Unfortunately, the company sold off many of the technologies so it could survive. It looks like it has.

LTBH is Long Term Buy and Hold, but is not Hold For Infinity. To me, stocks are there to enable a life. If GERN can be sold at a high enough price, I may do so to get out of debt, enable a nicer lifestyle, do some pilanthropy, or even invest in something else.

And history echoes.
I own stock in a company pursuing one of Geron’s spinoff technologies. That stock, LTCX, was languishing as a startup can, until about noon the day after Geron’s announcement. Suddenly, the stock started moving almost as if someone made the connection. It ended up 11%. That’s pretty good too.

Now, the waiting game.
LTBH is defined by patience. Patience holding. A celebration. Now, patience waiting for FDA approval. Then, a few more milestones later, begin treating people, making money, and seeing it meets or exceeds or fails expectations. It ain’t over, and looks more likely to go on for a long time, which should also be true of the patients.

A few links

• My posts about Geron (GERN) – https://trimbathcreative.net/tag/gern/
• My posts about Lineage Cell (LCTX) – https://trimbathcreative.net/tag/lctx/
• My End Of Year Synopsis (which links to stock comments) – https://trimbathcreative.net/2023/12/29/semi-annual-exercise-eoy-2023/
• My video (~17 minutes) about Geron – https://youtu.be/su1AMjPEkLI