Day Two Of The Porter & Co. Annual Conference
Inside Today's Issue
There are good things ahead for biotech…
Porter took the stage this morning to give a rundown of what’s happening with medical research that will lead to discoveries that will lead to life-changing opportunities in wealth creation. Running through his newly created barbell portfolio for Porter & Co. Biotechnology, Porter pulled out one promising stock in particular to recommend. “It’s a speculative buy,” he said, “but their pipeline is promising and four of the five top biotech investors have money in this business.”
He left the audience with two key takeaways: 1) there will be an immune-fighting tool to cure many forms of cancer within 10 years, and 2) if you find biotech too speculative or confusing, at the very least put some money into a biotech ETF.
Porter & Co. analyst Jared Simons shared with the audience an exciting software/gaming stock that has grown one portion of its business from zero to $1 billion in revenue in just 18 months – and growth just accelerated last quarter. The stock went from over $200 per share to $17 in 2021, but has since rebuilt its model and its reputation with the key developer stakeholders. Now infusing innovation with AI and adding robots into the mix, Jared sees 50% share-price growth as a conservative estimate over the next two years. The big catalyst to share-price movements come in early November when the company releases Q3 earnings.
Distressed Investing analyst Marty Fridson emerged after the mid-morning break to tout the performance of his distressed-bond and distressed-equity recommendations. His closed bond positions returned 24%, while the combined stock-bond selections soared 103% from the time of recommendation to closing out the trade.
What’s new since the last conference is the addition of the Income Streams portfolio as part of Distressed Investing… as a way to generate various streams of income in addition to the value gained from an investment’s price appreciation.
Marty explained that you can earn consistently decent overall returns from an income investment just as you can from simply owning shares of a company – but with income investments, most of the returns come from dividends, interest payments, or other cash disbursements and not from the appreciation of the share price.
He also discussed the advantages of such an investment strategy – such as providing living expenses and reducing volatility – and then shared the results, up 8.25% over the past 12 months, outperforming the benchmarks
The Tucker Letter editor E.B. Tucker spoke before lunch, welcoming what he calls the "stablecoin standard."
E.B. isn't predicting economic collapse from the growing debt. Instead, he sees a world where stablecoins disrupt and replace the current banking system. Stablecoins are crypto tokens pegged to an asset. In this case, that asset is the U.S. dollar: one U.S. dollar equals one U.S. dollar stablecoin.
The 2025 GENIUS Act requires stablecoin companies to hold Treasurys with maturities of 93 days or less – 90-day Treasuries currently yield about 4.1%. The stablecoin makers pocket that yield as nearly pure profit.
The stablecoin market is valued at roughly $310 billion. At 4.1%, that works out to about $12.8 billion a year in "free" money.
U.S. Treasury Secretary Scott Bessent sees the market growing 10-fold to $3 trillion.
With that much "free" money on the table, it's no wonder some of the biggest banks and asset managers, including Goldman Sachs, Stripe, and BlackRock, announced plans for a joint dollar stablecoin. Tucker sees it as an attempt to lock up the market.
Tucker acknowledges that most of us aren't rushing out to buy stablecoins, but with so much incentive for the powers that be to profit from them, he sees a world where we're marched into stablecoins through sweeping societal narratives.
E.B. believes Bitcoin will become the new gold standard of stablecoins. If it takes that role, he says it could reach $1 million per coin.
At the conclusion of the conference, the Porter & Co. analysts team took the stage to debate the proceedings of the last two days. After much discussion – and some dissension – they selected what they determined to be the most promising recommendations shared from the stage. Conference attendees are getting The Big Five Report as part of their entry. Those who did not attend can get access to the report of the five most promising stocks. It will be available early next week.
Tell me what you think of today’s Daily Journal: porterstansberrydirect@gmail.com
Porter & Co.
Stevenson, Maryland
1. Nasdaq-100 profits are rising at the fastest pace in decades. Expected earnings per share for the index – analysts' estimates of profit per share over the coming 12 months – are up more than 50% from a year ago, slightly above the 2010 rebound from the financial crisis and the fastest reading in nearly two decades. The index hit a record high this week, but is up only about 24% over 12 months, so it actually trades at a lower multiple of earnings than it did a year ago. During the dot-com boom in 1999 and 2000, tech stock prices rose far faster than profits, causing the multiple to expand. This time it is shrinking.
2. Government debt burden hits new highs. The debt-to-gdp levels of developed economies has reached 108%, up from 80% before the 2008 financial crisis. In emerging markets, debt-to-GDP has reached 78%, the highest level going back to 1880. The rapid accumulation of debt globally is pushing interest rates higher across the world, including in the U.S., where 10-year Treasury yields just hit a new 20-year high of 5.14%.
3. AI just broke the record for the fastest price collapse in history. New data from research firm Epoch AI shows the inflation-adjusted cost of artificial intelligence (“AI”) output – tokens – falling roughly 12.7x per year since 2021 – that’s a million-fold in five years. Computing took roughly three decades to get that cheap. But falling prices don't shrink this market – they make demand higher. Every 10x drop in price opens up use cases that didn’t make sense before, which is why hyperscaler spending keeps climbing even as the unit price craters.
The rise of yields on 10-year Treasuries above 5% – which has happened this week and where it sits today – will cause inflation to break out even higher. Now, Fed Chair Kevin Warsh will face a choice the 1980s Chair Paul Volcker never faced: he will have to choose between fighting inflation and keeping the Treasury solvent. He cannot do both.
Yesterday’s Journal was dedicated to updating readers on the Porter & Co. Annual Conference taking place in Baltimore through today. We shared details of Porter’s re-allocation of Porter’s Permanent Portfolio, including a reliance on commodity ETFs.
“Great Update”
Rodger G. writes:
I’ve been watching the ticker USCI as a way to follow the commodities trend. My 65-year-old eyes are having trouble reading the chart that your email included and I would appreciate access to a larger chart. My macro perspective on commodities is rather simplistic and based on the total global population of over 8 billion being the primary driver of higher commodity prices remaining a long-term trend tailwind. Seems like a reasonable way to find stock opportunities. With U.S. markets at such high valuations and yields rising along with inflation this presents an even more important time for your research and recommendations which I appreciate greatly.
Thanks as always for the education, Professor!
Bryan M. writes:
Hey guys,
I would appreciate more information on this person/subject, Dave Lashmet, who was quoted in yesterday’s Daily Journal. I am the Nuclear Medicine Technologist that pioneered monoclonal antibody delivery (1980-2015), thru daily administration of targeted tracers tagged to antibodies. that gave the world today what it has on Radio-Biologics. I was also a Licensed RSO (Radiation Safety Officer).
Porter & Co. Comment: Dave Lashmet is an analyst at Stansberry Research and a regularly featured speaker at Porter & Co. events.
Ryan M. writes:
With the new Permanent Portfolio rolling out, it made me wonder about the Partner Portfolio you guys released a while back... do you still recommend and intend to comment on the Partner Portfolio, or was that a one-off recommendation not intended to be actively managed?
Thanks, and keep up the great work. I'm bummed I'm missing the farm this year. I find your research invaluable, and really appreciate all the work you all put into the various advisories you offer.
Porter & Co. Comment: We consider Porter’s Permanent Portfolio as the flagship Porter & Co. investment vehicle for subscribers. Both the Partner Portfolio and The Honeycomb have been presented as educational tools available to Partner Pass members – we will update and report on both at least annually.