Today's Wall Street Journal kicks off, right in the pole position above the fold, with an article about the total profit/loss figure for publically traded biotech firms, 1990-date. Care to hazard a guess? I surveyed lab colleagues today, and most guesses were something like "Hmm. . .must be a loss, I reckon." One optimist thought they might have been even, or running to a slight profit ("Mostly because of Amgen," he explained.)

Well, the figure is indeed a loss, a 40 billion dollar loss so far. And keep in mind, that's not counting all the venture capital money that's evaporated when companies vanished even before floating stock. An impressive figure!

The natural question is why investors continue to throw money at the sector, and the answer is, as the Journal puts it, "boundless optimism." Reminds me of the chapter title in the stockbroker's classic "Where Are the Customer's Yachts?", titled "Customers: That Hardy Breed." People remember the Amgens of the world, few and far between though they are. As the article points out, a dollar put into Amgen when it went public is worth $165 today. (For comparison, a biotech index fund would have returned 8-fold over that period, and the Dow about 20-fold.)

But there have been a lot more than 165 biotech companies to invest in during that time, so (on the face of it) that 165-to-one payoff is something of a sucker's bet. Of course, we're not just throwing money down on a huge roulette wheel. Biotech stocks are subject to analysis, to a cold-eyed appraisal of their technology and their finances, their burn rates and scientific boards, their patent portfolios and licensing deals and FDA filings. Right? I invest in them too, you know. We're not just buying lottery tickets. We're investing. Right? Anybody?