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  • E-Articles - The Effect of Human Emotion on Investment Decisions and the Overall Economy

    Economics is simply "the study of life" and the choices we make. Human emotion is perhaps the strongest force in the economic and financial environment. It gets its appropriate level of respe
    According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
    ct in the real world--and a very short shrift in the land of academia. Human emotion...the need to stay up with the Joneses...the drive to get a great deal...the drive to make a killing on an
    ; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

    Examples of combination products may in
    nvestment or a property...all can contribute to positive or negative developments in the economy.

    Fear & Greed...Stocks

    Emotion at times can be the primary driver of stock prices, whet
    lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

    er up or down. The powerful emotion of fear can motivate holders of stocks or other financial assets to sell, at times regardless of the price received. The equally powerful emotion of greed
    here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
    an motivate investors to buy various assets, even when the inner voice might suggest the price is too high. Only later, in many cases, can investors recognize that they were "caught in the mom
    d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

    Combination pro
    nt" and let emotion drive their actions.

    Greed was clearly center stage during the second half of the 1990s and the first quarter of 2000, especially in regard to Internet stocks and the NASDA
    ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
    . Greed drove many Internet-based companies to sky-high stock market valuations, even as many of these companies lacked profitability or a reasonable chance to become profitable anytime soon.
    easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
    The overall NASDAQ was pushed to a high of 5049, much higher than many investors and market players deemed logical or possible.

    At such unsustainable levels, fear soon became the more dominant
    nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
    emotion. The fear of millions of investors eventually pushed the NASDAQ down to 1113, a decline of nearly 80%. Hundreds of thousands of investors saw major losses in their retirement portfoli
    and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
    s, requiring them to either stay in the workforce longer or return to gainful employment in order to rebuild damaged portfolios.

    Fear & Greed...Real Estate

    A similar greed-based rise w
    ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
    s also found in the nation's real estate market in recent years. Tens of thousands of investors pulled their funds from the stock market and sought a new avenue to riches--real estate was just
    ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

    Following aspects would a
    the ticket.

    The decline of both short-term and long-term interest rates during 2001-2003 provided thousands of homebuyers with the opportunity to purchase their first homes. Tens of thousands
    dd to the challenges in developing combination products:

    Which markets to tap where the combination products can do fairly well?
    Which combination prod
    of existing homeowners took advantage of the lowest home financing rates in 40 years to "trade up" to more valuable properties.

    The Flippers

    In addition, investors and speculators by t
    cts are meaningful and rational?
    Which therapeutic categories to select?
    Which Combinations can address unmet needs of the patients?
    Do combin
    e thousands began to push real estate values higher. Many of these investors, commonly known as "flippers," took advantage of extremely low short- and long-term financing rates to purchase add
    tions increase the patient compliance?
    What would be the developing cost?
    How to tackle the risks encountered during combination product developmen
    tional properties.

    It was not uncommon in hot real estate markets on the East Coast, the West Coast, and in the nation's Southwest for flippers to appear at announcements of new single-family
    t?

    As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
    nd condominium developments, with the intent of buying multiple properties. Many of these flippers were successful in immediately bumping prices higher, and were able to pocket significant pro
    ping new procedures for reviewing their safety, efficacy and quality.

    Professional from academic institutions, pharmaceutical industries, health care indust
    its with limited risk.

    Other flippers came belatedly to the game in late 2005 and 2006, and were ultimately stuck with multiple properties to finance, with limited potential buyers. Many of t
    y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
    ese flippers, as well as thousands of more legitimate homeowners, faced the bleak task of trying to unload properties at a time when many other investors were engaged in the same process. Thei
    .

    As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
    financing plight was made worse by the impact of 17 monetary tightening moves by the Federal Reserve through June 2006.

    The problems of sub-prime lenders are serious in today's real estate ma
    elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

    Companies that provide selfless information through particip
    ket and are discussed ad nauseum in the media. The additional issue of flippers looking to liquidate investment properties adds to current real estate woes in many formerly high-flying markets


    tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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