BiQ: BiQ Investment Philosophy

I received a question in BiQ Premium Chat this past week about why I continue to hold a particular position even though the momentum seems to be terrible. I thought this presented a good opportunity to explain my general investment philosophy.

First of all, to be very clear, I'm not a momentum trader. Sure, strong momentum is an added bonus, but it's not what I primarily look for. There are plenty of momentum traders out there, but my focus is always on the long-term. I look for deep-value stocks that have high long-term upside potential, while simultaneously trying to minimize long-term risk. I tend to stay focused on the long-term R/R, not the short-term momentum, and I'm willing to hold on through volatility as long as my thesis is intact.

In fact, most of my biggest wins came from stocks that were exhibiting terrible momentum when I entered them. Some of these turned around quickly, and some took time. Here's a snapshot of the performance of all of the BiQAP positions I have closed since I launched BiQ in early 2024. Keep in mind that for most (if not all) of this time, sentiment for biotech has remained at historic lows. (To be fair to my Premium Subscribers, I have redacted the names of the companies that are still part of the BiQ Active Portfolio.)

Most of these names I picked up when they were deeply disliked by investors and were often the subject of very negative sentiment on social media, but where I felt investors were overlooking the underlying long-term value. Also, the list above only includes stocks that were/are held in the BiQAP and doesn't include names such as JOBY, EOSE, PRME, and several others that, while not included in the BiQ Active Portfolio, have nevertheless already risen by low-to-mid triple-digit percentages since I shared my entries with BiQ Premium members.

None of these moved up in a straight line, and some suffered significant downdrafts before regaining momentum. Small-cap biotech stocks are extremely volatile, and the share price can remain very disconnected from the underlying value for long periods of time. In each case, however, I held on as long as my long-term thesis remained on track. I also tend to employ options strategies to bring down my cost basis over time, helping to improve long-term performance, while also helping to keep me from getting too bored while I wait.

Being long-term focused isn't as glamorous as trying to catch the latest "hot" stock. I also miss out on many momentum plays that may perform well in the near term, but where I have doubts about their long-term potential. I prefer to invest in a deeply undervalued stock with a solid long-term thesis rather than one with a weak long-term outlook but strong near-term momentum.

I think it's important to point out that this isn't the right strategy for everyone, especially investors who like to trade in and out of positions actively. There are as many paths to investing as there are investors to walk them, and I'm a big believer in the idea that each investor should approach investing in the way that makes the most sense to them. Long-term investing isn't for everyone. For me, however, I am willing to be patient until a stock's price catches up to my long-term thesis. Sometimes that happens quickly, and sometimes it takes time and patience. Do I win every bet? Of course not. Sometimes I'm simply wrong. But over my 20 years of investing, I have found that being long-term focused has been a winning strategy for me, and it's the one I follow at BiQ.

Please refer to the BiQAP Live spreadsheet on the Active Portfolio page or the iQCS for additional information.

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Biotech iQ is not an investment professional, and nothing on this page or this website should be considered investment advice. Please consult with a licensed investment professional as necessary. Past performance is not indicative of future results.