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Reply #17: How Hyteria Kills the Market [View All]

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mhatrw Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-02-11 04:12 PM
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17. How Hyteria Kills the Market

By far, the swine flu the horrifying virus that swept the world two years ago is the most prominent media scare story of the past decade, leading investors down a rocky road of troubling investments.

On March 6, 2009, Novavax, Inc. (NASDAQ: NVAX) was trading at $0.56 per share; on August 28, the stock peaked at $5.89. Investors bought into the company because they believed that the swine flu would fulfill the fears of the media, requiring millions (if not billions) of people to get the H1N1 vaccine or face certain doom.

By October 2, Novavax had dipped to $3.43; two months later, the stock lost another 90 cents.

This, of course, is one of many instances where investors responded too quickly to the mass hysteria brought on by the media. Predicting the worst, investors turned their attention to the manufacturers of the H1N1 vaccine.
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