At 5:45 on a recent afternoon, I received an email from a friend:
Matt,
Here’s a deck for a company one of our biotech advisors is raising money for. Basically they looked at why all the big pharma trials failed, and they have a solution for what went wrong. Let me know if this is interesting to you.
I was on a conference call when this popped into my inbox—but when this friend shares a deal with me, I stop what I’m doing and pay attention.
My friend is literally one of the “fathers” of the modern biotech industry:
As a member of Congress and the White House, he was responsible for initiatives at the National Cancer Institute, the NIH, and the FDA. He also has experience in the private healthcare sector—as a senior executive at a leading Big Pharma company, and as head of a think-tank.
I consider myself fortunate to have a network that includes people like this—people who proactively share high-quality deal flow with me and Wayne.
But no matter how good the source of a deal is, there’s something I always do before considering an investment—and it’s something you need to do, too.
Today, I’ll tell you what it is.
No Substitute for Research
Within a week of receiving the above e-mail, I’d conducted two conference calls with the company’s team and booked a ticket to visit its lab on the West Coast.
As you may remember, when I wrote you last week, I was en route from New York City to visit them.
This is an extraordinary company: it’s created an innovative way to diagnose and treat one of the most devastating neurodegenerative diseases: Alzheimer’s.
Alzheimer’s is a horrendous affliction. It currently affects 6 million people in the U.S. and Canada alone—and that number is expected to grow dramatically.
You see, thanks to modern medicine, we’re living longer than ever. But there’s a downside to our increased longevity:
The older we get, the more likely we are to contract Alzheimer’s. In fact, tens of millions of us are already developing this disease.
But this early-stage biotech company might hold the cure. And if it’s successful, its early backers stand to reap tremendous rewards on two fronts:
- The emotional rewards of helping cure a horrible disease
- The enormous financial rewards
But to be clear, as promising as this company sounds “on paper,” it’s a high-risk opportunity. And like any early-stage company focused on a disruptive technology, much remains unknown.
In scenarios like this, it’s critical that you understand exactly what you’re getting into. And as I’ve come to learn throughout my career, nothing can replace deep and systematic research.
Boots on the Ground
One of the most reliable ways to do research is to meet the team in person—to put “boots on the ground.”
However, I don’t usually do my research alone; I like to bring back-up. More specifically, I tap into my network and invite someone along who has relevant experience.
So on my excursion last week, I recruited my friend Ray Blanco. For the last seven years, Ray has focused specifically on biotechnology investments.
(For example, based on his analysis of the science, he recommended Vertex Pharmaceuticals (VRTX) at $35. It’s traded as high as $140 recently, and currently sits at about $86. And he recommended Seattle Genetics (SGEN) at $15. It’s recently traded as high as $52.)
So while I was huddled in a conference room with management discussing the terms of this private deal, Ray was busy in the company’s lab digging into the science.
Here’s a photo of Ray and the Chief Scientific Officer of the company (we’re blurring it out for confidentiality reasons):
This trip lasted just 48 hours, but I walked away with a deep understanding of the company’s potential—a far deeper understanding than I could have gained by simply reading its financial reports or talking to management by phone.
Bottom line: When it comes to investing, having a deep network of contacts and conducting boots on the ground research gives you a huge advantage.
Same For Stocks
Wayne and I will soon decide if we’ll invest in this company (we’ll let you know if we do). But there’s a bigger point I’m trying to make here:
It’s always exciting to get a “hot tip.” But if you don’t properly vet the opportunity, you’re putting yourself at risk of losing your shirt.
When it comes to the private market, Wayne and I aim to be your boots on the ground resource.
But when it comes to the public markets (specifically, disruptive technology stocks), we recently recruited a friend to help us out—and to help you out.
His name is James Altucher. He’s the expert we’ve been telling you about these last few weeks.
Not only does James have a high-quality network that can provide a continuous stream of “hot tips,” but he can also provide boots on the ground research into these companies.
And James has a pretty impressive track record to back it all up...
In fact, if you’d like, you can watch this short video to learn how James once turned $2,000 into $10 million (without ever leaving his home).
It’s all thanks to his network—you can learn more here »
Best Regards,
Founder
Crowdability.com
