Of course, when it comes to biotech- medical-device companies, it's important to remember that anything can -- and often does -- go wrong. Consider the obstacles: Only after passing clinical trials, getting FDA approval, and persuading insurance companies to reimburse for the product can a company really test consumer demand. And, of course, that demand is filtered through individual doctors. That a woman wants a particular test doesn't mean that her gynecologist will offer it. (Companies have to spend millions marketing drugs to doctors.)

The real problem for investors is that there is no reliable way to figure out which products will be able to get over all those obstacles and which will not. Disappointments are a permanent feature of the biotech landscape, even for larger companies, and a distressingly familiar problem for smaller ones.

Trex Medical, for instance, one of the two women's-health-care companies that Wilmoth has a rating on (it's a hold), had been counting on its new digital-mammography technology to be a major future revenue source. The company was far ahead of its competition and expected to roll out a full line of mammography systems. Digital mammography, which Salomon calls "a breakthrough technology in early breast-cancer detection," offers the promise of a dramatic improvement in the quality and speed of diagnosis over conventional mammography, and it's also safer, since it requires less radiation. If it works as it's supposed to, digital mammography will make it much easier to detect breast cancer in younger women.

The FDA, though, is apparently unconvinced that the Trex system will work as promised. Although the FDA did not reject the technology, it essentially returned it to Trex and said, "We need more information." The technology may still be approved, but in the meantime the company's stock has plummeted from a 52-week high of $19 a share to around $8 a share.

"There's just no way to tell what's going to happen in clinical trials or with the FDA," Wilmoth says. "That's the basic problem with this sector, and you have to have a tolerance for that kind of risk."

What that means is that even people who would like to invest in their own health should not invest only in their own health. Small biotech companies are the very definition of speculative investments, so if you want to invest in them, make sure you've also got some blue chips in the portfolio. Wilmoth puts it bluntly: "No one in their right mind should ever have a portfolio made up of just pure-play women's-health-care stocks."

Why buy them at all? Well, the potential payoffs are obviously huge, especially for small companies, where one widely adopted medical device or drug can drive growth for years. The drug company Immunex, for instance, has seen its stock price more than double in the past year, thanks to expectations for its new anti-arthritis drug Enbrel. And investors who bought Biopsys -- whose mammotone system uses a single needle to perform minimally invasive biopsies -- when it went public almost doubled their money a year later when the company was bought by Johnson & Johnson.

Biopsys is clearly the biggest winner to date in the women's-health-care field. And although some still hold out high hopes for Trex, the most interesting pure-play company out there right now may be Cytyc, whose ThinPrep alternative to traditional Pap smears is finally finding a market. Technologically superior and significantly more accurate than current tests, ThinPrep could reduce the number of women who die from cervical cancer each year by improving early detection of the disease. But since the test is more expensive than the traditional method, Cytyc has had a hard time getting labs to invest in the technology because insurance companies have been dragging their feet on offering reimbursement for the test. Recently, though, that seems to have changed.