Issue #144, Volume #2
Continuing With Our Annual Report Cards For 2025
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
We’re devoting this week’s Daily Journals to a practice that Porter has been doing for decades… issuing Report Cards for the newsletters that he publishes. Honest and thorough feedback is the key to earning trust and ensuring straightforward financial analysis and recommendations. As Porter likes to say: it’s the information I’d like to receive if the roles were reversed.
Today, we continue the grading with two of our key advisories… Marty Fridson’s Distressed Investing and Erez Kalir’s Tech Frontiers. On Friday, we will conclude the week with the remaining advisories.
Porter leads off with Distressed Investing below.
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Distressed Investing finds corporate bonds in distress… Marty Fridson has 10x’d the bond market… Equity returns from bonds… Biotech Frontiers becomes Tech Frontiers… Erez Kalir plucked winners in a biotech bull market… Numerous picks have soared 100%+… |
Marty Fridson finds corporate bonds that are distressed, and he is basically 10-xing the returns most folks normally get from bonds… In fact, he’s making readers 25% annualized returns – from bonds…
He’s making people 2x the average return of the stock market, all with bonds that offer legally guaranteed payments.
This is unheard of. It violates just about every “rule” of the efficient-market hypothesis. These results are simply too good to be true. And yet, we’ve watched it all happen with our own eyes, in real-time, for more than two years now.
It’s remarkable. And it makes sense if you know Marty and his stellar career. Marty Fridson is one of a kind. Marty’s proving you can make 20%-plus annualized returns from bonds… while most people think they’re lucky to get 3%.
To catch people up, let me explain Distressed Investing for those who are not familiar with it… Marty focuses on corporate bonds that have fallen into distress… Or another way to put it, when Wall Street writes a company off – when it thinks a company might be headed for bankruptcy and dragging the bonds down with it – that’s when Marty starts paying attention.
Peloton Interactive (Nasdaq: PTON) is a great example.
Everyone said it was a COVID fad – a company to avoid like the plague. But Marty dug into the books and saw a business quietly turning cash-flow positive and paying down debt.
First, Marty recommended a Peloton bond… and sure enough, the bond’s up 32%, on top of a fat yield we’ve been collecting the whole way… But, in addition to the bond, he also recommended shares of Peloton. Within six months, the shares had increased more than 100%, at which point he suggested readers sell half their position to realize gains, and hold on to the rest, which today remains at a price point more than double from the entry level.
And that’s not the only distressed equity Marty has recommended. Part of Marty’s routine is to look at a distressed company’s stock as well as its bond. By the time he’s analyzed the business inside out, he probably knows more about it than the CEO.
And when those bonds recover, we’ve seen the stocks follow – in spectacular fashion, as with Peloton.
Midwest ethanol producer Green Plains (Nasdaq: GPRE) was another big one… With Green Plains, he recommended a combo buy of the bond and shares at the same time.
That was an incredible pick – Marty at his best.
Marty closed the Green Plains bond position with a 25% gain in four months… and then he recommended his subscribers sell the stock for a gain of more than 200%.
That’s the payoff for Marty’s hard work. He finds the right story, buys it when no one else will, and let’s quality compound.
It’s the same principle behind all the most dependable businesses we recommend.
Porter’s 2025 Grade: I am giving Marty Fridson an A+ for his work on Distressed Investing.
And Erez Kalir is on a dream run, too, with his picks inside Tech Frontiers – which we renamed from Biotech Frontiers in September as Erez began to expand his domain into tech, cryptocurrencies, the blockchain, and medicine.
Everyone can see the closed-out wins on the screen here…
And the open positions are looking just as spectacular, if not even better.
Heck, back in April, Erez created a watchlist – the average return on the stocks on his watchlist since April is over 100%.
What’s even more impressive is that we launched Erez’s research specifically because he came to us in late 2023 and told us a major new biotech bull market was about to begin. He was exactly right, as anyone who has been following his work – and his recommendations – knows.
As someone who lives and works in the San Francisco Bay area, he’s our man inside Silicon Valley. He knows the tech and biotech sector better than anyone I’ve ever worked with.
We should start with Sagimet Biosciences (Nasdaq: SGMT)… One of Erez’ best picks so far in Tech Frontiers…
It’s one of those rare setups that had everything he looks for – world-class science, clear catalysts, and a low share price that made no sense.
I don’t want to get into the weeds or the technical stuff… But Sagimet is tackling fatty liver disease – a condition that hits roughly one in four adults worldwide. And it’s pioneered a treatment that could impact hundreds of millions of lives. It’s a huge breakthrough.
And Erez was convinced enough to double down, recommending it twice. This is probably the highest-confidence pick I’ve seen from Erez – and he was right.
The first recommendation from January 2024 is up more than 80%… Then he re-recommended it eight months later, and we’ve seen a 130% move on shares of Sagimet.
He was really pounding the table on that one. At one point, it was the only company he put into his “Best Buys” – the list of stocks among all those in the portfolio that are at a very attractive buy price.
Sagimet checks every box.
And two other recommendations – currently with “hold” status since they are well above their “buy up to” price – are approaching 100% returns… Roivant Sciences (Nasdaq: ROIV), which plucks Big Pharma’s discarded ideas and gets them to market, and TG Therapeutics (Nasdaq: TGTX), which creates treatments for cancer and autoimmune diseases.
And it goes to show… you don’t need dozens of biotechs. You just need the right few where the payoff potential is massive… Massive.
Porter’s 2025 Grade: I give Erez an A+ for his work on Tech Frontiers.
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Three Things To Know Before We Go…
1. The U.S. jobs market continues to weaken. Yesterday, the Bureau of Labor Statistics (“BLS”) reported U.S. nonfarm payrolls rose by 64,000 in November. While this was higher than the 45,000 jobs Wall Street economists had expected – and up from October’s sharp decline of 105,000 jobs – job growth continued its clear downtrend from its 2022 post-COVID high of 900,000. Perhaps more notable, the unemployment rate unexpectedly ticked higher to 4.6%, its highest level since 2021. Unemployment is now up by 1.2 percentage points from its trough 30 months ago… and as the chart below shows, since at least 1950, this has never happened without the economy already being in a recession.
2. A bull market in bankruptcies. The latest data for bankruptcy filings among large U.S. corporations reached 717 through November, according to S&P Global. That’s the highest level in 15 years, and indicates significant stress among America’s largest businesses. The elevated bankruptcy rate likely explains why we’re seeing a persistent slowdown in the labor market.
3. Fund managers go all in. According to Bank of America’s global fund manager survey, the average cash level as a percentage of assets under management (“AUM”) for professional money managers dropped to a record low 3.3% in December – down from around 5% in April. These depleted levels leave little room for error if stock prices correct, and also indicates that fund managers could be running out of investable cash to continue pushing stock prices higher.
And One More Thing… A New Release: Best Buys
Tomorrow we are publishing our latest issue of Best Buys – in it, we reveal that those who followed our Best Buys this year are up 23.3% compared with 17.0% for the S&P 500. And that’s without exposure to any volatile big tech or taking on any big risks… This week, we’ve added a new entry to the list of three stocks whose buy price is at a particularly attractive level – this one coming from our Legal Monopolies section of the portfolio. The issue, part of Porter Stansberry’s Complete Investor, will hit inboxes tomorrow at 4 PM ET.
If you are not a subscriber to Best Buys – and want to get all past recommendations as well as the new release tomorrow – click here.
Porter Stansberry Stevenson, Maryland
Please note: The investments in our “Porter & Co. Top Positions” should not be considered current recommendations. These positions are the best performers across our publications – and the securities listed may (or may not) be above the current buy-up-to price. To learn more, visit the current portfolio page of the relevant service, here. To gain access or to learn more about our current portfolios, call our Customer Care team at 888-610-8895 or internationally at +1 443-815-4447.