How Do You Build a Portfolio?

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How do you and your team make decisions about what stocks to put into your portfolios? We try to invest sometimes in these binary events where we think the probability of success is much higher than the market appreciates. The way you manage that is through position size. So for our health care strategy, we're never willing to risk more than 1% of the portfolio or 100 basis points on any one event.

On today’s show we’ll discuss another empty room – an opportunity ignored by most investors because they either don’t want to or can’t participate. Andy Acker is a Portfolio Manager at our anchor sponsor, Janus Henderson Investors, where he manages the firm’s healthcare strategies. Janus Henderson is a global asset manager with $300B in assets under management, and Andy oversees the firm’s Global Life Sciences strategy and its Biotechnology strategy. Biotech stocks have been crushed despite significant advances in drug development, making it a proverbial empty room with only specialists and contrarians left standing. Our conversation starts with Andy’s path to becoming a healthcare investor, scientific innovation over his time at Janus Henderson, translation of science into commercial success for businesses, and the 90/90 rule for how stocks behave. We then turn to his investment process across filtering ideas, research, assessment of management teams and commercial success, portfolio construction, trading around names, and private crossover investing. We close with Andy’s perspective on opportunities and risks to the space from here, and green shoots he sees that might fill seats in the empty room. For full show notes, visit the episode webpage here. Learn More Follow Ted on Twitter at @tseides or LinkedIn Subscribe to the mailing list Access Transcript with Premium Membership