How To Best Allocate Your Capital In The IBI Long-Term Portfolio?

Summary

• IBI Long-Term portfolio is compounding over 27% as of Jan. 12, 2018. New portfolio additions are continuing to deliver substantial profits.
• Despite that the best strategy is to mirror IBI long-term portfolio, there are alternative approaches to capture the lucrative profits in bioscience.
• This is an abbreviated version of the in-depth Integrated BioSci Alpha-Intelligence research available in advance to our marketplace subscribers.

“Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.” - The Oracle of Omaha (Warren Buffett)

Since Integrated BioSci Investing (“IBI”) commenced operations back on June 27, 2017, we’ve compounded the 27% composite gains for the IBI Long-Term portfolio for the trailing 6-month. Our robust growth is mostly due to the notable performers as depicted in table 1. Accordingly, our picks in Kite Pharma (NASDAQ:KITE), Nektar Therapeutics (NASDAQ:NKTR), Spectrum Pharmaceuticals (NASDAQ:SPPI), Atara Biotherapeutics (NASDAQ:ATRA), Amicus Therapeutics (NASDAQ:FOLD), Exelixis Inc (NASDAQ:EXEL), and Crispr Therapeutics (NASDAQ:CRSP) procured 82%, 282%, 153%, 100%, 62%, 59%, and 45%, respectively.

Figure 1: Notable IBI performers. (Source: Google Finance).

Without further introduction, we’ll share with you the exchange between Dr. Tran BioSci of Integrated BioSci Investing with Len Nguyen ("LN") (that can shed further insight into how to best use the IBI Long-Term Portfolio).

LN: What do you recommend as the percentage of a particular stock in the IBI portfolio that one should allocate?

Dr. Tran: I suggest that investors allocate an equal percentage to all bioscience in the IBI Long-Term portfolio. Notwithstanding, for certain equities that have compelling reasons with nearly 100% certainty that they can trump other issues, I'd double up the stakes (but no more than that). Notably, there are always the random chances that no matter how strong a thesis is, it will not be played out as one anticipated; hence, it’s best to exercise adequate diversification to minimize the risks while maximizing one’s chances of finding the multi-bagger rewards.

LN: Will you notify of sell recommendation when a particular stock in the portfolio is no longer attractive?

Dr. Tran: I will most definitely issue the sell recommendation when any stock (in the IBI Long-Term portfolio) post fundamentals decline (and the chances of rebounding are slim). This way, I can add further value to subscribers.

LN: Re the maximum percentage one should invest in bioscience versus one’s total stock portfolio (i.e. if your total stock portfolio is 100K), how much of this amount would you allocate to biotech investing?

Dr. Tran: There are different strategies to portfolio allocation. The one I'm utilizing takes into consideration of an oncoming recession as well as new opportunities. A recession will surely come in the future; however, Buffett said that one can reliably forecast the exact timing. When it comes, I strongly recommend investors not to sell your shares of IBI holdings: stellar firms with robust fundamentals will rebound to their new highs when the market stabilizes (as great investors like Buffett, Fisher, Lynch, and Mohnish Pabrai advised). I, myself, witnessed that phenomenon during the 2008 recession. Moreover, Pabrai said that during the recession, you can close your eyes, throw a dart, and it'd hit. Most companies that you invest during the recession will increase multiple folds in the subsequent years.

Recession asides, there are great bioscience opportunities that IBI seeks to uncover over time. As the results, I'd leave ample cash in anticipation for both new opportunities as well as an oncoming recession. In applying the aforesaid approach to the 100K portfolio, a good strategy is to allocate $60K into IBI while keeping $40K in cash (to deploy during a recession or whenever opportunities emerge). Furthermore, it’s best to specialize in one niche (i.e. bioscience), where there is high growth (to reward you with market outperformance in the long-term). To every rule, there is at least one exception. And, I’ll keep my eyes on special situations in other industry and alert subscribers accordingly.

Final Remarks

In all, we recommend that investors mirror the IBI Long-Term portfolio. That way, you can ensure that your portfolio has the most number of companies to be strongly diversified. Of note, it is highly difficult to earn over 50% compounded annual gain for a well-diversified portfolio in the long-term. Notwithstanding, one can expect to beat the market with the good rate over the long-haul that will substantially grow your capital. As depicted in figure 2, we calculated the 10-year investment horizon for the IBI Long-Term portfolio - assuming the 27% annual compound gains on $100K of initial capital that is fully invested - and found that IBI should turn your money into about $1M. Last but not least, this is an abbreviated sample of the in-depth Integrated BioSci Alpha Intelligence research, published in advanced and to subscribers of Integrated BioSci Investing (a community of expert physicians, scientists, executives, market leaders, and everyday investors).

Figure 2: A compound interest case study. (Source: TheCalculatorSite)

Author’s Notes: We’re honored that you took the time out of your busy day to read our market intelligence. Founded by Dr. Hung Tran, MD, MS, CNPR, (in collaborations with Dr. Tran BioSci analyst, Ngoc Vu, and other PhDs), Integrated BioSci Investing (“IBI”) marketplace research is delivering stellar returns since inceptions. To name a few, Nektar Therapeutics (NASDAQ:NKTR) procured more than 210% profits; Spectrum Pharmaceuticals (NASDAQ:SPPI) delivered over 180% gains; Kite Pharma netted 82%. Exelixis Inc (NASDAQ:EXEL) earned greater than 50% capital appreciation. Our secret sauce is extreme due diligence coupled with expert data analysis. The service features a once-weekly exclusive in-depth Integrated BioSci Alpha-Intelligence article (in the form of research, reports, or interviews), daily individual stocks consulting, and model portfolios.

Notably, we’ll increase our price soon. SUBSCRIBE to our marketplace research now to lock in the legacy price and save money in the future. To receive real-time alerts on our articles as well as blogs, be sure to check out our profile page and CLICK the orange FOLLOW button . Asides the exclusivities, this article is the truncated version of the research we published in advance to IBI subscribers. Further, you can read up on Dr. Tran’s background by following this link.

Integrated BioSci Investing: A 2017 Thanksgiving Note

Summary

• Our marketplace is growing to deliver increasing value to subscribers.
• Spectrum Pharmaceuticals is the top performer. Second comes Nektar Therapeutics. Our portfolio is also powered by many other key winners.
• Kite Pharma was bought out in the recent months.
• We wish to send our Happy Thanksgiving to all readers, subscribers, and SA.
• Subscribe to our marketplace service to receive higher level intelligence, to galvanize your portfolio.

For the past 52-weeks, the Biotechnology Index (NASDAQ:IBB) gained 9.75% while key performers in our Integrated BioSci Investing portfolio posted profits far more robust. Kite Pharma (NASDAQ:KITE), now a subsidiary of Gilead Sciences (NASDAQ:GILD) delivered over 247% returns. Spectrum Pharmaceuticals (NASDAQ:SPPI) appreciated over 361%. Nektar Therapeutics (NASDAQ:NKTR) headed north over 250%. And, Amicus Therapeutics (NASDAQ:FOLD) procured over 51% profits.

Source: Google Finance (Notable Small-Caps BioSci Winners)

In 2013, we joined the ride with Seeking Alpha (and in May 2017, we decided to exclusively focus on our bioscience expertise). Since the commencement of our marketplace service (Integrated BioSci Investing) in the past five months, our overall recommendations to subscribers have been highly profitable (especially with key performers, as mentioned above).

For Thanksgiving 2017, we wish to send our appreciation to all readers (and especially subscribers as well as Seeking Alpha) for your readership, friendship, advice, and business. There are many highly intelligent subscribers, who enjoy the mutual learning. Going forward, we hope to continue to deliver our stellar service to you. Thank you all, and Happy Thanksgiving!

Source: Everyday Good Thinking

Bioscience Developments - An Integrated BioSci Investing Report

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Big profits/safety in a changing market via high-level intelligence from the Columbia scientist, doctor/market expert

Investing in bioscience stocks can be lucrative if - and only if - an investor has an expert edge. Chief Medical Analyst, Dr. Tran is a physician with years of experience in the bioscience field. He has a highly accurate record of clinical data forecasting that is nearly prescient. Leveraging on his strengths, Integrated BioSci Investing ("IBI") seeks to demystify medical jargon and to break down scientific complexities in a way that's easy for the layperson to understand. And, our mission is to translate high-level intelligence into big profits for clients (who we view as business partners).

Extremely well researched, communicated in an easy-to-grasp manner. High potential for capital appreciation ...

At IBI, we have much success in finding stocks that have delivered multiple folds profits. You can review our portfolio in this quarterly assessment. Some of our notable performers are listed below.

Exclusive insight has been proven correct …

Nektar Therapeutics gained +307%.

Spectrum Pharmaceuticals returned +169%. (It also appreciated over 36% in one day, following a positive catalyst forecasting after an MP exclusive article was published).

Atara Biotherapeutics delivered +166%

Crispr Therapeutics gained +113%

Kite Pharma (acquired by Gilead Sciences) profited +82%.

Juno Therapeutics (acquired by Celgene Corporation) procured +45%.

Amicus Therapeutics appreciated +71%.

We maximize our subscribers' chances of discovering multibagger opportunities while diversifying to lower overall risk (including the over-exposure to any particular niche). With our portfolio implementation, we can help you maximize your profits even if the bear market will come.

You'll receive the following exclusive services with subscription:

• Exclusive IBI Long-Term portfolio: At least 30 stocks recommendation (that focuses on areas, including CAR-T, infectious disease, NASH, and immuno-oncology).
• Exclusive Catalysts portfolio: For short-term trading that leverages on binary events analysis and special situations
• Exclusive Alpha Intelligence research: Once-weekly Integrated BioSci best idea as interviews, reports, or research
• Exclusive daily Integrated BioSci analysis: High-level intelligence published in advance of the free articles
• Exclusive Integrated BioSci M&A analysis: Periodic report on potential 2018 M&A
• Exclusive coverage: Weekly portfolio updates and quarterly reviews
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Integrated BioSci Investing Research: Portfolio Management And Investment Strategy

Summary

Profitable investing can be done through studying fundamentals. Balancing risks versus returns is a requisite to successful investing.

A combination of index fund and high yield equities can be a prudent approach for the everyday investors.

A professional manager is most likely to profit more from the higher risks and higher rewards by building an all equities portfolio.

The “home-run” approach features a diversification into potential multibaggers (stocks yielding over 10X profits). And, the minimizing-losses strategy offers greater safety yet less rewards. We take a hybrid approach.

Despite its high volatility, bioscience stocks offer substantial profits for investors in the long run.

The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment. - Benjamin Graham

Due to subscribers’ demand, we continue the series on investment strategy and portfolio allocation. Vandon Duong recently joined Integrated BioSci Investing (“IBI”) and the young phenom will share his approach in this research. Accordingly, we’ll provide a general overview of our approach. Then, we will further expand on several topics of interest, particularly those indicated by our subscribers and the comments, in subsequent articles. The scope of this series is to share in-depth strategies for successful investing. The information presented here should be interpreted as advice to supplement the reader’s own strategy. Of note, every individual has unique circumstances and thus will adopt different approaches. Regardless of one’s circumstances, investment resources like IBI can be used to build a foundation of knowledge and aid in your own due diligence efforts.

Integrated BioSci Investing

We operate under the presumption that it is entirely possible to build wealth in a sustainable manner through insightful investing. The basis for insightful investing lies in studying fundamentals and balancing risks to returns. At the most basic level, one’s capital allocation can be divided into index funds and individual stocks. An index fund (e.g. mutual fund, ETF) is a single collection of securities, often individual stocks of a particular type. An index fund is considered a less risky investment because, as a collection of securities, it provides economies of scaleand diversification. There are many other securities (e.g. bond) available but these will not be covered in this article.

It’s important to fractionate one’s capital into two pools of either index funds or individual stocks. The pool consisting of index funds is considered low risk and unlikely to yield high returns. Benjamin Graham referred to the aforesaid index fund as the cornerstone of conservative investing. In contrast, the pool consisting of individual stocks is considered high risk and likely to yield high returns. And, these arsenals should be part of what Graham referenced to as the enterprising investors.

The purpose of this dichotomy is to identify one’s tolerance to risk and partition capital accordingly. For example, an everyday investor with an appreciation for risk could divide his/her capital into 60% index funds and 40% individual stocks. In another example, a hedge fund manager (i.e. the enterprising investor) anticipating exceptionally high returns could invest in 100% individual stocks. It’s important to acknowledge that while index funds are less risky compared with individual stocks, any security has a non-zero probability of collapsing (i.e. zeroing out).

Interesting, we also advised investors on allocating a good amount of cash to anticipate for a recession (the best opportunity to purchase stocks), which is another requisite to successful investing. Hence, we recommend investors to check out that research.

Strategy for Picking Winners

We’ll use the word “game” and “strategy” synonymously. That being said, the game of picking winners is a common theme among many competitions (e.g. Horse Racing, Fantasy Football, March Madness). In stock trading, the game of picking winners consists of building and optimizing positions in a portfolio. We consider a “winner” to be a stock which yields a return of at least the principal, but ideally much more.

Consider a hypothetical portfolio with 10 positions in a variety of high risk, high return biopharma stocks. Suppose that all but one position zero out. The single remaining position must yield a return of at least 10x to breakeven. Of course, one should utilize a more intricate strategy to do better than breakeven. The breakeven point is simply a good reference to have in mind (adjust portfolio expectations commensurate with the individual’s preferences and experiences).

There are two general approaches to building, for example, a 10-position portfolio: (1) home-run and (2) minimizing-losses (yet another dichotomy!). In the home-run approach, each position should be chosen such that it has the potential to offer returns much greater than 10x (>>10x). Often, these positions are stocks of biopharma startups chasing after extraordinarily high-impact healthcare solutions. Alpine Immune Science (NASDAQ:ALPN) is good candidate. These positions tend to also have the highest risk of zeroing out. The home-run portfolio will likely have at most one, if any, position as a winner.

Alternatively, one may build a portfolio following the approach of minimizing-losses; each position should be chosen such that it is unlikely to zero out. This approach requires greater due diligence, as it’s challenging to determine which biopharma startups will survive/thrive. Yet, as building confidence in a position requires more data analysis and time, it’s probable that the game of picking winners falls to acquiring comprehensive knowledge and having an edge over the rest of the market. That being said, we take a hybrid approach which rests squarely between home-run and minimizing losses.

30-Position Equities In IBI Long-Term Portfolio

Asides from the aforementioned highly concentrated (10-equity portfolio), a good alternative is to employ the 30-stock portfolio (to further distribute the risks while optimizing the rewards): this is the underlying basis of the IBI Long-Term portfolio. In distributing one’s capital in a larger number of stocks, we maximize the chances of finding multi-baggers or home-run equities. Concurrently, we distribute the binary risks further among many different stocks. That way, several negative binaries won’t affect our overall returns (as shown in table 1).

Table 1: IBI Long-Term portfolio performance (Source: Dr. Tran BioSci)

Interestingly, the aforesaid portfolio can be leveraged by both professional equities managers as well as everyday investors. For the everyday investor, one can build $1.0K in each stock for an overall $30.0K holding. If one has $60.0K, a distribution of $2.0K into each stock is prudent. Notably, we suggest that you read this prior research for further allocation insight. For these type of articles, we placed them under the “getting started” section in the marketplace for your viewing convenience.

Bioscience Stocks

It is quite rare to witness the phenomenal profits that the bioscience sector yields elsewhere. Since our inception back on June 2017, the IBI Long-Term portfolio yields over 37% (which outperformed all indices for the similar period of comparison). And, we hope to continue our trend.

What enabled such a robust performance are due to various factors. One, small-cap biosciences (despite its high volatility) tend to offer the best returns (if one has the stomach to absorb such wild fluctuations in the share price). The high returns stem from the fact that an approved branded therapeutic (especially those servicing the orphan market) can be reimbursed with a significant premium: those profits are then rippled to the share price (at least in the long-run). Second, we leverage on our expertise in data forecasting and years of experience in the financial markets in an integrated framework of investing to give our members an edge (especially in clinical and regulatory binary forecasting). Even if the sector performs superbly, it does not pay off if one does not have an edge and is simply going in for a coin toss per se.

Conclusion

In all, we hope you enjoy our continuing coverage re portfolio management and investment strategy. In this paper, we discussed the strategies that can be employed by both the professional managers as well as the everyday investors. The secret sauce for success is the balancing of risks to rewards (just as a physician would prescribe a medicine that is based on the benefits to risks profile). Finding one’s risk tolerance and adopting the proper strategy in building one’s portfolio is most likely to lead to long-term outperformance. In the goal of maximizing the chances of finding home-run (multi-bagger) stocks while minimizing the impact of the negative binaries, one can either employ a 10-equity portfolio or the 30-stock holding. The key is that diversification is a requisite. At IBI, we continue to push our due diligence in serving our members. We appreciate your stock tips, advice, wisdom as well as friendship. And, we hope to serve you for many years to come.

Author’s note: this research is authored by Dr. Tran BioSci Analyst, Vandon Duong (in collaboration with Hung Tran, M.D., M.S., C.N.P.R.). Disclosure: Dr. Tran is long on ALPN.

Vandon is a new analyst joining Integrated BioSci Investing. Vandon is a Ph.D. candidate in the Dept. of Bioengineering at Stanford University. He is also a Partner of the Mythos Biotechnology Fund, an investment firm composed of Stanford students and postdocs. Before joining Stanford, Vandon received his degrees in Physics and Biomedical Engineering from the University of Minnesota. Vandon has extensive research experience in protein engineering, leading projects involving directed evolution, structure-guided rational design, and design by computational modeling. He has expertise in biochemistry, bioengineering, and biophysics.