Dear Reader,
Happy Thursday, and PSA: tomorrow is Valentine’s Day…
You heard it here, so hopefully you don’t get stuck like I usually do, paying outrageous prices for roses the day of.
Today I want to talk about the fascinating press conference between President Trump and Elon Musk.
I found it mesmerizing. It’s probably the best conference I’ve seen in years.
Musk said we have to cut costs and make our government more efficient because the United States is going to go bankrupt.
And he talked about some of his findings.
For example, he found in the Treasury department that they send out payments without notating what the payment is for.
They found that there’s a lot of contractors that sign three-month contracts, and they’ve been getting the contract payments for 20 years!
Think about that – you sign a three-month contract to paint a building, for example, and you keep getting that payment for 20 years. It is crazy!
Musk talked about finding Social Security payments going to people who are 150 years old (really, people who don’t exist anymore)…
So the idea is there may be domestic or foreign fraudsters basically bleeding the Social Security system dry, pulling money from taxpayers to fund foreign payments.
What I also found illuminating is only 10,000 people per day can retire or otherwise leave U.S. government employment.
So there is a bottleneck on retirement, and layoffs are discouraged.
When a government employee puts in their retirement paperwork, submits their documents, they take a box with all your personnel files and they bring it to a mineshaft in the hills…
An elevator takes the boxes down into the mine and can only handle up to 10,000 boxes a day.
Think about it – to cut the size of the government, which has 2 million employees…
It de-incentivizes layoffs.
Because 10,000 is half a percent – one in every 200 employees.
Look, I agree with Elon Musk, 100%.
The United States faces bankruptcy if we do not cut costs.
It also faces serious national security threats if we don’t modernize our computer systems.
We have got to bring our government into the 21st century, no doubt about it.
Of course, in the cost-cutting process, they’re breaking things.
For example, they cut NIH funding, which has sent biotech stocks down, because 83% of NIH’s $48 billion a year budget goes to funding clinical trials and treatments.
That funding took pressure off of biotech stocks having to raise more money from the market.
With that going away, biotech stocks have to raise more money from the market. So they must issue more shares, which is dilutive and drives share prices down.
So that’s the situation we’re in.
Which, ironically, has created some of the best opportunities we’ve seen in biotech in years.
Really, since 2018.
We’re starting to see Big Pharma companies start to buy smaller ones.
And we own some great biotech stocks I feel are well positioned to rebound as we get more clarity from the federal government on what’s going to happen in the biotech sector.
I’m very optimistic.
I believe we own a basket of biotech stocks that are first in line for takeoff.
One in particular is an $8 AI biotech stock already on the move.
I believe it’s poised to soar in 2025, and I’m not the only one…
ARK Investment recently bought almost 7 million shares…
Bayer just signed a deal worth as much as $1.5 billion to have them use their AI to develop new drugs…
And NVIDIA just bought 7 million shares.
Get the name of the stock here.
“The Buck Stops Here,”
