Adam Feuerstein Says If You Believe In A Biotech Bubble, It Hasn't Burst

Adam Feuerstein was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Feuerstein thinks the concept of a biotech bubble is simplistic.

"We're still debating whether a biotech bubble exists or not," Feuerstein told Benzinga Friday.

Partly driven by mergers, the Nasdaq Biotechnology Index is up nearly 300 percent since 2011, although it's off about 5 percent from a recent peak in March.

"If you believe there's a biotech bubble, then it hasn't burst yet," said Feuerstein, senior columnist and blogger at TheStreet.

The short ratio in the Nasdaq Biotech Index as of March 31, at 3.4 days to cover, was less than half where it stood in November, suggesting that investors have indeed become less cautious about the sector.

"Its a little bit simplistic to say yes or no there's a bubble," Feuerstein said. "It's important that you understand the stocks that you own."

Companies in the group can be volatile, and trade on news concerning drug approvals, conferences and clinical trial results, Feuerstein noted.

"You can't just buy a bunch of stocks because it's biotech," Feuerstein said. "A lot of these companies that are more speculative, more risky, they do blow up."

Shares of iShares NASDAQ Biotechnology Index (ETF) IBB were down $6 at $355.31 in Friday's session.

Check out the full interview below: