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Some rules in trading are flexible. Others aren’t.
And here’s one I don’t bend on: If the FDA is involved, I stay out.
I don’t care how compelling the AI angle is. I don’t care if it’s being pitched as the next biotech breakthrough.
If it’s an FDA-related stock, I don’t want it. Let me tell you why…
Nvidia Just Showed You the Exit Door
Nvidia (NVDA) recently got rid of Recursion Pharmaceuticals (RXRX) — a company that was getting plenty of buzz in the AI-meets-pharma world. RXRX went from being one of the AI darlings in that niche to NVDA being out.
That tells you something.
RXRX has earnings coming up this Wednesday, and I’m staying far away. Not because I know what the numbers will look like, but because I know what the FDA can do to these companies.
The FDA can wreak havoc on smaller names. They’ll either kill something with a denial or prop up something questionable with a surprise approval.
They ruin everything, or they give some kind of breakthrough approval to some junk — and at the end of the day, it’s just a testing process. There’s no stability you can trade with confidence.
You might get lucky. You might catch a rally. But you’re not trading a stock at that point — you’re rolling dice on a regulatory body’s calendar.
That’s not my game.
I Trade Setups — Not Regulatory Roulette
Look, I get it. Some of these pharma plays sound amazing. The AI integration story is compelling. The upside looks huge if they get approval.
But I don’t care.
I don’t mess with pharmaceuticals. I literally have a button on my stream labeled biotechs, pharmaceuticals, biotech, pharma, med tech, med specialties — all the stuff I avoid on purpose.
Sure, the FDA is about the safety of drugs, but just on a whim they can ban something or approve something. There’s no rhyme or reason you can chart, no trend you can trust and no setup you can lean on.
It’s unpredictability wrapped in bureaucracy.
And when a company like Nvidia — one of the smartest operators in the AI space — decides to walk away from a play, that should tell you all you need to know.
For other approved things, the FDA is probably fine. I’m not saying the entire regulatory system is broken.
But when it comes to smaller pharmaceutical companies waiting on trial results and approval timelines, the risk is just too unpredictable.
Even compounding pharmacies need some FDA scrutiny — I’ll give them that. But that doesn’t mean I want to own the stocks caught in that process.
I’ve been doing this since the 1980s, and I’ve learned the hard way: Some bets aren’t worth taking, no matter how good the story sounds.
So if you see a pharma stock making headlines or riding some regulatory rumor — ask yourself one question: Do I really want to bet my capital on what the FDA decides next?
I don’t…
Trade well,
Jack Carter
Jack Carter Trading
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