Trend Signal Now: Finding My Edge

Friday, December 13, 2024

[Editors Note] Getting away from the screens is healthy for the soul.

It's important in order to keep the mind right.

And perhaps, I should add, that it's great for the bottom line.

Trust me.

I've been there.

Get away for a few days. Your portfolio returns will thank you.

And I'm eating my own cooking here. I'm leaving for a few days, so you'll be hearing from different members of the ASC Research Team while I'm away.

Some of them you already know well. Some you're just getting to know. And others you're meeting for the fist time.

So try to be nice!

And please don't let them burn the place down while I'm gone.

I'll be back next week!

Finding My Edge In Biotech

My family has always been a healthcare family - I'm the son of a nurse and a pharmacist. When I was 15, they turned their passion for healthcare into an entrepreneurial venture, starting our community's only locally-owned pharmacy.

I spent many weekends helping out with whatever needed to be done, and gained knowledge of the pharmaceutical industry while other kids were playing Fortnite.

Seeing the intersection between science and retail was fascinating, from the lab to the pharmacy shelf.

I witnessed first-hand the approval and widespread adoption of Novo Nordisk's Ozempic and how much it costs to order a refrigerator full of it (it's a lot!).

I was born in 2002, so while I was being conceived, the NYSE Biotechnology Index bottomed and entered a 2,000% secular uptrend.

What's more, Humira, the biggest blockbuster drug of all time, was launched days after I was born.

I'm fortunate to have been born at the time I was!

Biotechnology at an index level has been dead money for a decade, but I think that's about to change:

JC has been pounding the table on sector rotation into Consumer Discretionary and Technology, but I think he's not paying enough attention to biotechnology.

This industry made investors fortunes earlier this century, but most investors suffer from recency bias and want nothing to do with them.

Before the legendary visionary Steve Jobs passed away over a decade ago, he said, "I think the biggest innovations of the 21st century will be at the intersection of biology and technology. A new era is beginning."

Who am I to argue with Steve Jobs? I'm here to profit from companies on innovation's bleeding edge.

Every day, I'm monitoring this list of up & coming biotech stocks:

My universe contains biotech stocks between $1-$10B in market capitalization or about 20% of all investable biotech stocks.

That's the sweet spot for me.

I'll leave the speculating on phase 3 readouts to the science nerds. I'm no scientist.

I'm looking for companies that recently won FDA approval and are in the early stages of marketing to the masses. This is often accompanied by primary trend reversals and base breakouts, which allow me to define my risk without capping my upside.

You can join the waiting list for my new weekly column, Bio-technical Analysis, focused on identifying the biotech industry's most asymmetric risk vs. reward setups.

Also, we recently published a free report highlighting the best stocks in the Baker Bros. portfolio. This hedge fund is on another level when it comes to identifying companies in the biotech industry with science that makes money for shareholders.

Thanks for reading!

Sam Gatlin, Analyst, All Star Charts

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J.C. Parets | Founder, All Star Charts

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