great piece. To add on the energy section, secondary beneficiaries for increased electricity demand would be copper (transmission lines) and surrounding metals used in electronics to meet the needed throughput through the increased demand. Perhaps also land/regions that have cheap electricity will have some sort of pricing power, especially if they build data centers on these lands. Another interesting phenomena that could be seen is the dual use of bitcoin miners for mining bitcoin during bull cycles and using them as AI centers during bear cycles or just dual use depending on which has more demand
Great post! It’s interesting to see we think quite similar and are viewing/buying similar companies. I’ve been buying NRP recently ( I just wish I found it sooner) and I’ve had Clipper on my watchlist for a while.
One question.
What makes you comfortable understanding pharmaceutical companies? I’ve only ever invested in one pharmaceutical company (HROW which has worked out great) but I find them extremely hard to understand as they normally have very complex products. Would you say you understand the field well or do u do a lot of research into each company? Thank you
I have very real limitations when it comes to the science, but I think there are times here and there where you can sniff out a very clear +EV bet despite such limitations. I tend to limit myself to either 1) event-driven stuff or 2) situations where there are several high probably shots on goal such that the risk is spread out across the pipeline (e.g. ROIV, which basically trades at cash, and has an enormous pipeline of drugs and various catalysts, making it very difficult to lose).
As far as the more speculative biotech stuff goes, I will very rarely get involved unless there's some dynamic satisfying #1 or 2 above. With Mereo, my cost basis is 90 cents and given two late stage assets, the probabilities clearly made this positive EV at that market cap; on top of that, I got involved during Rubric's activist battle, which gave this a bit of an event angle. There's also been a long telegraphed spin/parternship/divestiture angle for the second major asset alvelestat, which takes away some development risk for one of the two assets. Beyond that, i think you can get working familiarity with certain drugs with enough time and effort and the rewards can be well worth it.
Great post! St. Joe Company ($JOE) or Canterbury Park ($CPHC) may be interesting land / real estate companies. Dream Unlimited Corp in Canada also owns some MPC assets as well as a hodgepodge of other real estate assets.
I don’t have one and I’ve never seen one. Rubric Capital’s activist letters from 2022 are good for framing, and then I would look to Mereo’s investor deck + Ultragenyx presentations on Setrusumab. There’s also a good bit of commnetary now on Twitter
great piece. To add on the energy section, secondary beneficiaries for increased electricity demand would be copper (transmission lines) and surrounding metals used in electronics to meet the needed throughput through the increased demand. Perhaps also land/regions that have cheap electricity will have some sort of pricing power, especially if they build data centers on these lands. Another interesting phenomena that could be seen is the dual use of bitcoin miners for mining bitcoin during bull cycles and using them as AI centers during bear cycles or just dual use depending on which has more demand
For sure, there are a lot of second order ways of playing this theme!
Amazing
Phenomenal post.
Thanks!
Great post! It’s interesting to see we think quite similar and are viewing/buying similar companies. I’ve been buying NRP recently ( I just wish I found it sooner) and I’ve had Clipper on my watchlist for a while.
One question.
What makes you comfortable understanding pharmaceutical companies? I’ve only ever invested in one pharmaceutical company (HROW which has worked out great) but I find them extremely hard to understand as they normally have very complex products. Would you say you understand the field well or do u do a lot of research into each company? Thank you
Thanks!
I have very real limitations when it comes to the science, but I think there are times here and there where you can sniff out a very clear +EV bet despite such limitations. I tend to limit myself to either 1) event-driven stuff or 2) situations where there are several high probably shots on goal such that the risk is spread out across the pipeline (e.g. ROIV, which basically trades at cash, and has an enormous pipeline of drugs and various catalysts, making it very difficult to lose).
As far as the more speculative biotech stuff goes, I will very rarely get involved unless there's some dynamic satisfying #1 or 2 above. With Mereo, my cost basis is 90 cents and given two late stage assets, the probabilities clearly made this positive EV at that market cap; on top of that, I got involved during Rubric's activist battle, which gave this a bit of an event angle. There's also been a long telegraphed spin/parternship/divestiture angle for the second major asset alvelestat, which takes away some development risk for one of the two assets. Beyond that, i think you can get working familiarity with certain drugs with enough time and effort and the rewards can be well worth it.
Very interesting. Thank you for the response!
Thanks Jake, great stuff!
If you want to go hairier, AHT is calling your name.
Great post! St. Joe Company ($JOE) or Canterbury Park ($CPHC) may be interesting land / real estate companies. Dream Unlimited Corp in Canada also owns some MPC assets as well as a hodgepodge of other real estate assets.
Incredible post, don't stop!
Amazing post again, man. Every investor should read this once every quarter.
🫡
Do you have writeup about $MREO? can you reccommand somebody who has?
https://clarkstreetvalue.blogspot.com/2022/10/mereo-biopharma-activist-proxy-fight.html
I don’t have one and I’ve never seen one. Rubric Capital’s activist letters from 2022 are good for framing, and then I would look to Mereo’s investor deck + Ultragenyx presentations on Setrusumab. There’s also a good bit of commnetary now on Twitter