Managing Risk, Earning Fortunes

Opportunity And Discipline In The Next Biotech Bull Market

This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.

Today – taking a break from our normal publishing schedule – we are continuing our “12 Days Of Christmas” series.

Better than two turtle doves and three French hens combined, Porter & Co.’s version of the “12 Days Of Christmas” brings you something actually useful: hard-earned investment lessons to guide you through 2026. For the remainder of the year – in place of our regular research and insights – we will dish out key lessons from 2025… some earned from pain and others from gain.

Over the past year, editors across all of our publications have recommended stocks, bonds, or other trades that have resulted in a mix of outsized performances and humbling underachievements. Having begun on Tuesday, December 23, and extending through January 2, we will reveal a pivotal lesson – about why a stock soared to double-digit returns, or why one languished. We will also explore the ones that got away – that we sold too soon or that we didn’t recommend at all. 

Tech Frontiers editor Erez Kalir looks back at how his strategy of risk management – relying more on position sizing than stop losses – has played out over the performance of the portfolio. 

On Monday, Porter explained that for various reasons – including less foreign ownership of U.S. Treasuries, continued American energy independence, and the Trump administration’s desire to strengthen the private-sector economy – major structural changes are taking place in the global economy. In the short term, the changes are going to cause market volatility. But over the long term, these shifts should make the U.S. economy much bigger, and make U.S. businesses much more valuable. It should also reduce the size of government, and enable tremendous growth in America’s private sector.

He ended Monday’s Daily Journal with this message:

Today, he shares that idea…

Virtually every titan of the investing world – Warren Buffett, Stan Druckenmiller, Jim Simons – made their fortune investing other peoples’ money.

There is one notable exception: Wayne Rothbaum, the little-known billionaire who is arguably the greatest biotech investor in the world.  

Rothbaum has never raised or deployed outside capital. In his investing journey, there’s been no glossy pitch deck, no management fees, no carried interest – and no safety net. Every decision Rothbaum has made, every dollar he has committed, every loss he has absorbed has come directly out of his own net worth. It’s a far more unforgiving path to wealth. And it imposes a discipline few institutional investors ever apply.

Over decades, Rothbaum has turned his personal capital into one of the great fortunes in biotech and indeed the entire investment game. Making incredibly concentrated bets in contrarian, little-known companies such as Pharmacyclics, Acerta, and Cougar Biotech, Rothbaum’s approach has been marked by deep scientific understanding, patience through volatility, and a ruthless focus on long-term expected value that pierces through short-term ups and downs. His career stands as a quiet rebuttal to one of the most persistent myths in investing.

Let me explain . . .