- The macroeconomic backdrop of Fed interest rate hikes is rapidly deflating overvalued technology companies and "crypto-collectibles." We expect the technology sector to underperform value and biotech.
- After the sell-off, biotech companies' valuation is close to the 2018 level even though the companies are better financed and many clinical catalysts are lined up.
- With COVID19 abating, supply chain and operational disruption are improving; as such, we expect faster drug discovery and more clinical catalysts in due course.
- First time in history, Biotech became cyclical due to COVID19, and with COVID19 abating, we view Biotech to become an undervalued, non-cyclical growth.
For further details see:
XBI And IBB: Sell Technology And Buy Biotech, The Only Undervalued Non-Cyclical Growth Sector