Inside today’s Daily Journal…

In late 2023, I saw the most incredible market formation I’d ever seen in my career.

And, fortunately, at 50 years of age, I had the experience needed to recognize it and capitalize on it. You may recall that I tried desperately to get you to do the same…

It was a pattern I’d seen twice before. It isn’t hard to spot, either.

You don’t have to guess when biotech stocks are going to soar. All you have to do is wait for tech stocks to take off, and you can know about 24 months later, biotech is going to the moon.

And for good reason… As each new wave of new computing capability washes over the economy and creates enormous new capabilities (and fortunes), those same capabilities and that same capital flood into life sciences. The tools that just transformed information inevitably get tuned to use on biology. I saw it happen after the PC boom in the 1980s with Genentech and Amgen. I saw it happen after the internet boom of the 1990s with Regeneron and Illumina. And in late 2023, the largest technology wave of all had just launched.

At the time (late 2023 / early 2024), the biotech sector had just endured the most brutal bear market in its history. Interest rates had spiked after the COVID bubble, and for long-duration assets like drug developers, interest rates are financial gravity. When money is expensive, the far-off cash flows of a future blockbuster get discounted into oblivion. By the end of 2023, more than 180 biotech companies on the Nasdaq and NYSE traded at a negative enterprise value. Which means you could have bought these entire companies, pocketed the cash on their balance sheets, and owned their drug pipelines for free. I had never seen anything like it before, in any U.S. market sector.

This was a certain boom… beginning at a generational bargain.

Like my old friend and partner Steve Sjuggerud taught me: you only need one biotech bull market. It just takes one. And there it was, just waiting for us.

In November 2023, Erez Kalir was in D.C. on other business and asked if he could stop by Meadowdale Farm (Porter & Co. headquarters outside of Baltimore, an hour away) to talk about something important. He didn’t say what it was, but I already knew: the opportunity in biotech.

Erez’s résumé reads like something out of a novel: Stanford, where he double-majored in biology and English; a master’s in cell biology and genetics from Oxford; a JD from Yale Law School; and then a key position at a hedge fund seeded by the legendary Julian Robertson of Tiger Management.

And there’s the incredible story of how we met.