Dan Rasmussen & D.A. Wallach on Biotech’s Surge, China, IPOs, US Valuations & Japan | #617
Today’s returning guests are Dan Rasmussen, founder of Verdad Advisers, and D.A. Wallach, a venture capital investor for Time BioVentures. In today’s episode, we unpack the recent biotech surge through the lens of Dan’s recently published biotech report. We also explore China’s growing biotech market, shifting IPO and VC trends, and how valuation tools like CAPE fit into today’s regime. Finally, we also discuss technology’s effect on productivity and corporate profits in the US, Japan’s economic anomaly, home country bias, and more.
Key Points
- Biotech stocks have historically shown highly uncorrelated and dispersed returns, making them a unique sector where traditional factor models like value, quality, and momentum require redefinition.
- China's significant investment in biotech research and development has led to a substantial increase in early-stage drug acquisitions by big pharma, revealing a growing global influence and competitive edge in the sector.
- The US equity market's sustained high valuations and rising profit margins may be driven by structural factors such as increased government deficits and broader equity market participation, suggesting a potential long-term global trend rather than a short-term cycle.
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Dan and D.A.'s appearance on the podcast in July 2025
Biotech Resources Biotech Investing Biopharma Market Update
US Stock Market Resources US Resilience Resilient CAPE Ratios and Long-Term Returns Is It Time for Equal Weight? MSCI All World Index country weights Financialization: How Fiscal Policy has Inflated Profits and Equity Valuations The rise and rise of the global balance sheet Ranked: Top Countries by Stock Market Ownership
Book Recommendations Investors Pick Their Favorite Reads The Hour of the Predator: Encounters with the Autocrats and Tech Billionaires Taking Over the World The Wizard of the Kremlin Active Portfolio Management
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Transcript
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