Philipp Schmidli/Bloomberg News

Much has been written this year about European banks as their stocks and bonds get pummeled by everything from negative interest rates to economic fears and tumbling oil prices.

Little attention has been given to the unfortunates who had piled into the biotech bubble before it began to deflate last year – but their losses are almost identical. From the day U.S. biotech stocks peaked last July, shareholders have lost almost 40% (a bear market is usually defined as losses of 20%; 40% is surely unbearable).

Those who bought into European banks on the same day have lost 42%, expressed in dollar terms to strip out the effect of currency moves. Locals lost even more. In euro terms, the region’s bank shares have dropped almost 55% since then.

The chart, showing prices in dollar terms, demonstrates that better-capitalised U.S. banks have been relatively resilient. Although shareholders who have lost almost 30% of their money in the past six months probably do not see it that way.

There is one vital difference between bank and biotech stocks: The biotech sector at least had a boom before the bust. Biotech shareholders are still up 67% in the past three years, while U.S. bank shareholders are basically flat. In the eurozone, investors in banks lost a third of their money in dollar terms in three years. Ouch.


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