Dear Reader,
Happy Tuesday! Christmas Eve…
Very exciting in our household, with young kids, you know, it’s the most exciting thing in the world.
So today I wanted to continue our annual review and talk about biotech…
As I mentioned, we have Dr. Conrad Mattern independently compile our track records.
And today I want to talk about our biotech trades this year, Biotech Insider.
---Takeover Alert---
A.I. Drug Gets $4 Billion Takeover
On December 13, 2022, a Big Pharma giant quietly bought one AI-designed drug for $4 billion.
It’s the biggest deal for an AI-designed drug in history.
But very few people even know about it…yet.
And they don’t know that this tiny AI-biotech designed the drug.
Get the name of the stock here >>>
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So, how did we do?
Well, it’s been like a tale of two cities.
The good news is, we averaged 48.68% gains on all closed trades.
Obviously solid performance.
On the downside, even in a market like this, it’s pretty much right in line with our average annual performance since inception, which has been 48.28% 2018-2023.
We didn’t do better this year than we’ve done the past six before it. So we’re in line.
I believe that has to do with the biotech sector specifically.
We started the year super strong.
If you’re a Biotech Insider member you’ll remember we closed Immunogen for a 449% gain…
Altimmune for a 150% gain…
Viking for 190%... Krystal Biotech for 88%...
So we came out swinging, guns ablaze.
But the year ended poorly taking some losses – a 57% loss on Alector… a 45% loss on Beam and a 92% loss on Pacific Biosciences.
That one hurt.
I held that PACB a while, believing in what they did, but they got stuck in a bad merger, mismanagement and a few things that happened with the company.
This is what it is.
The year started out strong with a lot of money flowing into biotech and ended with a lot of money coming out of biotech.
You have to remember how this works:
A lot of these small-cap biotech stocks we recommend are in little ETFs…
When big money starts to run out of these ETFs or index funds…
Say, a $1 billion-dollar fund that holds 100 biotech stocks…
When investors start to flee the fund, money gets pulled out of these stocks.
When RFK Jr. was nominated to be Trump’s Secretary of Health and Human Services, money just kind of blanket ran out of the biotech sector due to uncertainty.
So, we’ve gotten our butts kicked the past couple months.
Thankfully, as I’ve gotten older, I’ve learned a little thing called perspective.
So I like to keep a positive attitude.
We’ve averaged over 48% on all closed trades since we launched Biotech Insider in 2018.
And that’s pretty badass.
The other thing I like to keep in mind is biotech investing is like venture capital investing…
You either make a ton of money, like you see in Immunogen where it goes up 449%...
Or you get your butt kicked, like we did with Pacific Biosciences which went down 92%.
When you talk to venture capitalists, VCs, they basically say that for every 10 companies they invest in, three go bankrupt, four are middling – go up or down a little bit, two go up above average and then one of them is a 10-bagger, or 20-bagger and really makes it all worthwhile.
That’s the math of professional VC investing.
The same math applies to biotech investing.
Because remember something – we’re recommending companies in late phase two, early phase three drug companies…
Most often, they don’t even have a drug on the market yet.
There’s a lot of risk investing like this.
Boom-bust, feast-famine.
We have good times and bad.
But 48% average yearly gains for 7 years running is nothing to sneeze at.
So, to those of you hanging in here with biotech, this is one of the tough times.
Just hang tough. We’ve been here before and we’ve still beaten the market through good times and bad in the long run.
It’s like in the movie Pulp Fiction when Samuel L. Jackson says to Ringo, who puts a gun in his face…
“I hate to shatter your ego, but this ain’t the first time I’ve had a gun pointed at me.”
It’s the same kind of thing with bear markets in biotech.
This isn’t the first time we’ve had a bad market. We’re just going to keep our perspective.
We’re going to keep our patience, keep doing the next right thing and we will work our way out of it.
I hope you have a wonderful day.
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