Biotechs Might Bust Loose in 2024

Historically, the biotechs are one of the best places to blow up your account. It’s also a place where speculation runs rampant in what I like to dub “black box trading.” This is especially important during economies in transition, when people want to invest in themes without having to face the realities of earnings and revenues. During bubbles biotechs perform best and we’re all captivated by the science and the Baker Brothers’ holdings sheets. But over the past 2 years, this industry has been an anathema, partly due to restrictive financing due to higher rates and more importantly the public’s disgust with the scientific community post COVID vaccine flop.

At any rate, this is an industry down 50% over the past two years, with large losses in both the big biotechs and the small.

I don’t have any specific catalyst as to why this industry might be poised to bust loose in 2024, other than two salient points.

1. Rates have probably peaked, creating a more accommodative environment for raising capital.
2. Over-fucking-sold.

Some of my favorite beaten down names include ILMN, EW, CRSP and perhaps even the bastards at $PFE down by half. There are dozens of biotechs down more than 50% the past 2 years and I’d be lying if I sat here and told you I had any idea what the fuck most of those companies did. I have learned experience in seeing this sector go through dramatic peaks and troughs throughout my investment career and very rarely do they stay down for years at a clip.