Why Warren Buffett Might Not Be Crazy About Biopharma Stocks

Few investors would intentionally go against the judgment of the most famous -- and, arguably the most successful -- investor in history, but if you've ever purchased a biopharma stock, you're likely to have ventured where Warren Buffett would refuse to tread. Buffett's legendary long-hold approach to investing is backed by a conservative approach to stock selection that places great value on earnings consistency and eschews chronically high costs. Specifically, the Oracle of Omaha disfavors companies with consistently high research and development (R&D) costs, intense competition, large capital expenditures, and high cost of goods sold (COGS) compared with sales revenue.