I don't think large cap biotech is a bubble; there are smaller companies that I think are excessively valued based on hopes on their pipeline.
That said, as I mentioned in another thread, Express Scripts and the other PBMs are going to continue to fight (and it may get much more tough) on prices and I have longer-term concerns on the sustainability of the price increases for health care. At the very least, the issue of price isn't going away and is likely something you will continue to hear about.
As for PBMs, look at the purchases of smaller PBMs Catamaran and Omnicare recently. Some discussion that Walgreens buys Express Scripts, but that doesn't seem realistic to me.
As Mark mentioned, SHAK is way more absurdly valued. Also, I think Uber being more valuable than something like 80% of S & P companies is also a bit ridiculous.

more smart beta chatter:
http://www.ft.com/intl/cms/s/2/f017d16c-f8a3-11e4-be00-00144feab7de.html
http://www.fa-mag.com/news/malkiel--smart-beta---smart-marketing---smart-investing-21868.html

FYI: Talk of a bubble in biotechnology stocks is nothing new. It has been a topic of concern among investors and pundits for quite some time. This is not surprising considering that the Nasdaq Biotechnology Index has outpaced the S&P 500 by roughly 250% over the past six years. This year, in particular, has seen biotech stocks widen the outperformance gap to roughly 500%, evoking a new wave of bubble talk. Despite the onslaught of naysayers, shares of biotech stocks continue to climb higher and higher, showing no signs of stopping yet.
Regards,
Ted
http://www.marketwatch.com/story/biotech-bubble-is-nowhere-near-popping-2015-05-27/print
M* IBB Performance:
http://performance.morningstar.com/funds/etf/total-returns.action?t=IBB&region=USA&culture=en_US

@Bee - M* notes a 19% cash position. Leaving aside the fact that M* doesn't always have the data just right how does that jive with your claim of no cash position?

Your right, the manager decides how much cash is held within the fund. My point is that I don't have the ability to hold a cash position within Bruce's account platform. I would have to sell (redeem) shares and have the proceeds mailed to me which would have tax consequences and isn't what I am trying to accomplish.
Let's say I know I have a health expense in the next year and I don't want to worry about how the fund is performing. I would like to hold cash within my Bruce health savings account that I could redeem at any time. Or maybe I would like to Dollar Cost Average in or out of the fund. A cash position would allow me to dca (in or out). I like controlling how exposed I am to the market. A cash position within the account lets me do that.
With Bruce, you are fully invested and the manager decide how much cash you hold.

@Bee - M* notes a 19% cash position. Leaving aside the fact that M* doesn't always have the data just right how does that jive with your claim of no cash position?

FYI: Unequivocally, yes. Here is a guide to weathering the coming interest rate hike.
Regards,
Ted
http://fortune.com/2015/05/26/investing-rising-interest-rates/

@MFO Members: BRUFX Is Ranked #1 In The (MA) Fund Category By U.S. News & World Report.
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/moderate-allocation/bruce-fund/brufx

FYI: Plenty of investors who know what “smart beta” is aren’t ready to begin using such strategies in their portfolios—mostly because they don’t know what type of smart beta might be most appropriate, according to a recent study conducted by the indexing firm FTSE Russell.
Regards,
Ted
http://www.etf.com/sections/features-and-news/various-reasons-avoid-smart-beta?nopaging=1

FYI: (Just ask the late Liz Bramwell about Mario. He once locked her out of her office over a dispute.)
Mario J. Gabelli’s investment firm, Gamco Investors, is another shareholder warrior telling companies to create value through good corporate governance. Yet, what about Gamco’s own governance?
Regards,
Ted
http://www.nytimes.com/2015/05/27/business/dealbook/a-shareholder-advocate-in-word-but-not-in-practice.html?ref=business&_r=0
Source: Reference For Business.Com:
Founded in 1987, Gabelli Growth Fund was first managed by Elizabeth Bramwell, an analyst Gabelli met at Columbia during their student days. Gabelli Growth Fund achieved an annualized return of about 40 percent in 1988 and 1989, better than her boss's own performance. She resigned in 1994 after finding herself locked out of her office for refusing to move from Manhattan to suburban Rye, New York, where corporate headquarters had been established two years earlier. Bramwell said the performance of her fund had slipped vis-à-vis Gabelli's own results partly because she was not being allotted the staff she needed as the fund grew in size. She won $850,000 from Gabelli in an arbitration award regarding compensation allegedly due her.

BRUFX had a pretty good day today, only down -0.09% when the S&P 500 was down 1%. Their Treasury bond holdings were helpful today. I think BRUFX is a better choice than the long/short equity funds or other alternative investment funds with much higher expense ratios. The expense ratio for BRUFX is only 0.70%

I'm sure FMIJX is a fine fund, but it has definitely benefited from their significant currency hedging as detailed in the semiannual report of 3/31/15. Here is a CHART of FMIJX vs. DBEF.
Kevin

But you do know these Dream Merchants have no more insights or clues to where the markets are headed than you, me, or the man in the moon??

I think their main job and money making is to get paid subscribers. I think also, that the value of their information is directly inverse to the amount they say or write.

Amen!! You got it! I was the only one of the speakers who actually brought his last 10 years of brokerage statements. Most self proclaimed experts couldn't trade their way out of a paper bag. Ask them for some validation of their prowess or that they even trade, and they will give you 1001 excuses why that is not possible. Someday I should repost something from the 90s I penned titled - Crooks, Con Men, and Charlatans.

Thanks for the post. I think there are two related factors in this market - the economy and the FED.
If the econ slows down & the FED does nothing - stocks flat for the year
If the econ slows down & the FED raises rated - stocks take a hit and ultimately down 5-10% for the year.
If the econ some growth & FED raises - stocks up 5-10%

I found some of the info in your post interesting so thanks. But you do know these Dream Merchants have no more insights or clues to where the markets are headed than you, me, or the man in the moon?? In 1999, I spoke at a Las Vegas trading symposium with over 40 other speakers. The behind the scenes stories I could tell you about these so-called experts would make your hair curl.

Hi Guys,
The 2015 edition of the Las Vegas MoneyShow ended a few days ago. I attended only some of their many presentations. I wasn’t motivated to mention my planned attendance because in past years, the MFO membership responded with a deep yawn. That’s okay; I learn.
One novel aspect to the 2015 general format was the introduction of a Cannabis section that preceded the conventional MoneyShow agenda. The Cannabis sessions were paid events so I did not attend any of these presentations.
I did not take many notes, but I do have a general takeaway feeling that the professional market wiz-kids expressed relative to the market direction for the remainder of the year. A majority fraction of the experts are guardedly projecting positive returns from a narrowing market.
They observe that the current narrowing market is typically representative of aging Bull market runs. The present Bull market is third longest in history and will become the second longest if it extends into next year. One reason they are sanguine about the market has to do with the Presidential election cycle.
Presidential candidates will paint ultra-rosy pictures for their special programs. Louie Navellier jokingly advised that we should vote for the happiest candidate to best extend the likelihood of positive returns. On the negative signal side, Jim Stack cautioned that only 17% of the forecasters see near-term approaching dark clouds. That’s a contrarians warning sign. As usual, we get to choose our own poison.
For informational purposes, you might be interested in a Bull and Bear market summary paper assembled by Ed Yardeni. Here is a Link to that 10-page summary:
http://www.yardeni.com/pub/sp500corrbear.pdf
I did make a note of one interesting observation made by one of the MoneyShow exhibitors (I didn’t record his name). He noticed that the S&P 500 dividend exceeded the 10-year Treasury bond yield for a brief period in mid-January. Apparently that’s an extremely rare happening. He reported that whenever that did occur, the stock market rewarded investors with high payoffs.
Here is a Link to a January MarketWatch article that examined this occurrence:
http://www.marketwatch.com/story/stock-dividend-yields-are-above-treasury-yields----and-thats-bullish-2015-01-20
If the article has been posted earlier, I apologize. I completely missed it. Sorry Ted.
The three earlier occurrences are really insufficient to make grand statistical inferences, but the next year outsized rewards for these events were eye-popping. More fuel for the fire. Good luck guys integrating these data into your decision making.
Best Regards.

Bwahaha, Dex's belief in the 10-yr T @ 1%, the dweam that will never die. :)

Mmmmmm...forgetting things...Donepezil
Not in Art's league but,
Gundlach says benchmark 10-year Treasury yield could fall to 1 percent
http://www.reuters.com/article/2014/12/10/us-investing-gundlach-interview-idUSKBN0JO05O20141210
http://finance.yahoo.com/echarts?s=^TNX+Interactive#{"range":"2y","showPrePost":false}

Bwahaha, Dex's belief in the 10-yr T @ 1%, the dweam that will never die. :)

I think the US 10 year is on its way down again - this could be the trip to the 1% area.
Like Art there will be no looking back to see if I'm correct!

The lowest cost American funds are the "R" class that are available in 401(k) and 403(b). Otherwise they are set up for advisors, not generally no-load mutual funds for small retail investors. There is nothing magical about the American funds and there are always viable alternatives.

@Bob C. Great to have you back again! Reminds me of an old 1920's Ma Rainey jazz song: "Honey, where you been so long?". :)