In 1999, when technology stocks were promising unlimited growth, the steady 12 percent to 15 percent earnings growth of drug stocks looked rather dull by comparison. That was then. This year, with technology looking more and more shaky, the predictability of the drug stocks looks positively alluring. Like Switzerland in war torn Europe, the drug companies promise shelter from the storm. They do well in practically any economic environment.
Drugs are a big piece of the health care market.
But they are not the only piece that has done well this year. Biotechnology has had a banner year, largely on optimism fueled by the human genome project. The vast majority of biotech companies don't have earnings yet. In that respect, they are a little like the dot-coms. Still, the fact that they are part of a bona fide scientific revolution has impressed investors, at least until now.