Brownstone: Back and Better Than Ever

What an exciting week at Brownstone Research… And I have all of you to thank for that.

I’m grateful for all the phone calls and e-mails over the last week. We’ll be addressing the most asked questions in today’s mailbag.

It has been a bit overwhelming. I can’t tell you how much my team and I appreciate all the excitement and positive feedback. It’s so motivating for us all.

We’re finally back at it again and continue to build our team at Brownstone Research so that we can better serve all of you in our Brownstone community.

We all share a sense of urgency to get things back on track, share our new ideas, and start increasing the value of the research that we provide to all of you.

Thanks again for your patience and your time.

Have a wonderful weekend,

Jeff

I Thought Brownstone Was Shutting Down…

Hi Jeff, […] I’m a bit confused. It’s my understanding that Legacy is shutting down and that implies that Brownstone is, too. Can you please tell us if this is true and if so, what next? Thanks so much.

 – Tricia M.

Hi Tricia,

I’m glad you asked.

With regards to Brownstone Research, it is definitely not shutting down. In fact, we’re bringing it back to life. And I’m going to build it into an even more valuable investment research publishing company for my subscribers than it was before.

You are correct about Legacy Research. It is being shut down, along with Palm Beach Research. Brownstone Research was previously under the Legacy Research umbrella, but it is now a standalone subsidiary of MarketWise and is no longer affiliated with Legacy Research.

We’ve entered a new phase for Brownstone Research. And I’m empowered to do even more with my ideas and my team than I was previously. There will be lots of exciting developments between now and the end of the year that I look forward to sharing with you.

What’s Happening to Day One Investor?

Who is providing support for “50 ideas over five years.” I do not believe I have seen anything since you left. I would like to finish building out a diversified portfolio. Thanks.

– Mick

Jeff, if I am reading and understanding what you said, it indicates that private investing through crowdfunding (Day One Investor under the Brownstone banner) will not be available but only through Brownridge. Is this a correct statement? I am a Brownstone Unlimited lifetime member.

– Michael R.

Hello Mick and Michael,

Day One Investor and working to democratize private investments for all investors is something I’m very passionate about. I believe strongly that normal investors should have the opportunity to gain exposure to early-stage, high-growth private investment opportunities.

Twenty or thirty years ago, companies would go public very early in their growth. Amazon went public at a valuation of less than $500 million.

But today, companies are staying private and increasing their value for 8, 10, and even 20 years. SpaceX has been around for more than two decades and is now valued at $180 billion. By the time it goes public, most of the gains will have already been made, leaving non-accredited investors with the “crumbs.”

That’s what I’ve been looking to change with Day One Investor.

And Mick, you’re right, let’s get to 50 great investment opportunities and build a diversified portfolio. That’s the right approach when investing in private companies.

I’ll have a more formal update and announcement about Day One Investor within the next week or two with the specifics.

Return of the Perceptron…

Will you be bringing back the Perceptron?

– Michael M.

Hello Michael,

In short, yes, I am planning on bringing the Perceptron back.

For those who don’t know, the Perceptron is an AI that a team member and I built to predict the future price movements of publicly traded assets.

We focused its attention on the digital asset market initially, as we saw an imperfect market with a lot of data that we could train on. We launched a trading service with the Perceptron called Neural Net Profits, which was rebranded to CONAN and relaunched at Palm Beach Research after I left.

The results were incredible. Even in the bear market of 2022 and early 2023, the service was very profitable and had an 80% win rate. The only “downside” of the bear market was longer holding periods.

But as healthier market conditions returned, the Perceptron had a 100% win rate and much shorter holding periods, 37 days on average. This is exactly what we had designed the AI to do, and I’m excited to get this incredible system back to my subscribers.

The Perceptron is still “alive” and ready to get back to work.

What Are the Options to Be Reinstated?

I just canceled my lifetime subscription with Legacy since they had gotten rid of Jeff and Teeka. What are my options with being a Lifetime member? I just canceled last month.

– Scot S.

I canceled my Unlimited Brownstone membership because it was worthless. Can I get it reinstated? Also, I need to “unjunk” the emails. How do I do that? Thanks.

– Jay B.

Hello Scot and Jay,

Thanks for writing in about this. We’ve been getting so many similar e-mails and phone calls about this.

We’re excited to welcome you back to the Brownstone community, and yes, we’ll be able to get your accounts reinstated.

Here’s my editorial director, Lindsey, to explain all you need to do…

If you were a former paying subscriber at Brownstone Research but canceled your memberships and subscriptions and would like to have your subscriptions reinstated, we have a full customer service team ready to help you do that. You may contact them at memberservices@brownstoneresearch.com. Or call 888-493-3156.

Our team is receiving a lot of calls and emails, so we appreciate your patience. If your desire is to be reinstated, we will do our best to make that happen.

And, of course, if you run into any trouble along the way, we want to hear about it so we can correct it. Each day, our team collects all the emails we receive. We read each and every one.

Jay, to your question about “unjunking” the emails you receive from Brownstone Research, thank you for asking about this. It’s an important and often overlooked issue related to our ability to make sure that you receive every issue of The Bleeding Edge e-letter and every piece of research we publish, directly to your inbox.

And believe it or not, delivering emails is becoming even more of a challenge these days.

Earlier this year, Google and Yahoo announced new requirements for big email senders like Brownstone Research. And while we always comply, we aren’t surprised to hear from readers that occasionally, our emails will start showing up in their spam folders.

To avoid situations like this – and to make sure Brownstone emails never end up in your spam or junk folders – it’s very important you mark us as a “safe sender” with your email service provider.

This process of marking email addresses, IP addresses, and domain names as “safe” is called whitelisting. And we’ve posted some helpful information right here on how to do that.

It’s also worth noting that every time you engage with an email – by opening it, clicking on links, and replying with feedback – it also signals that we are a good and trustworthy source of information and we’re grateful for your engagement.

Will Early Stage Trader Be Reborn?

Dear Jeff Brown: I was sad to receive news about your departure and I’m glad you are back. After you left, they brought in a gentleman who said he didn’t understand our Early Stage Trader stocks, so he recommended that we sell the entire portfolio at once for a huge loss. What was Brownstone thinking when they replaced you with someone who lacked the knowledge to give us meaningful guidance? That sounded like incredibly inept advice, so I did not sell. I felt very confused, discouraged, and abandoned. I invested heavily in the EST stock portfolio and I don’t know what to do with it. I think a few of them went under since you left, and the rest of them are in the red. I keep waiting for the Fed to start cutting interest rates because the market greatly reduced the price of these stocks when the Fed started increasing rates. I wonder if there are others in the same situation. Since I first invested in the EST portfolio based on your recommendations, would you be willing to give us some guidance on what to do with these stocks now? Best wishes.

– Scott E.

Hi Scott,

Thanks for writing in about Early Stage Trader and the portfolio. What happened absolutely killed me. Setting the pandemic-induced biotech winter aside, ignoring that portfolio of high-quality early-stage biotech investments was a terrible mistake.

I could only watch the portfolio from the sidelines, but earlier this year, Joe Withrow and I were reviewing the portfolio. Ironically, both of us had lost our jobs. But the portfolio was up 19% at that time.

The overall portfolio gains were driven by a handful of companies. And one in particular, Cabaletta Bio, had risen from its lows of around $0.60 a share to more than $25. That was more than a 10X gain on our entry point for Cabaletta.

Had we still been in charge, we could have closed the model portfolio for a profit and subscribers would have been in the green. But that wouldn’t have been the smartest move. Simply selling Cabaletta at a 10X+ gain and then holding onto those companies that still have cash and a promising therapeutic pipeline would have been the best move.

Inevitably, as biotech market conditions improve, and some of these companies have success with their therapeutic development, their share prices will rise.

For anyone interested, our analyst, Joe Withrow, put together a three-part series at Outer Limits about the biotech market, what happened, and where we’re going. For those interested in the biotech space, this is definitely worth reading:

• Outer Limits – The State of Biotech (Part 1): The Story of Early Stage Trader & The Great Biotech Winter

• Outer Limits – The State of Biotech (Part II): The X-Factor Driving Biotech Today

• Outer Limits – The State of Biotech (Part III): Lying in Wait in Spring

Aside from the above, Joe and I will get together and work on an update on the portfolio for all past Early Stage Trader subscribers. Hopefully, this will be helpful.

And I’ve been doing extensive research in the biotech industry for the last year and also working on an improved research model for early-stage biotech companies.

The biotech industry remains the most undervalued sector in the markets right now. We still have so many companies trading at negative enterprise value. It’s just unbelievable.

I’m going to be patient and wait for institutional capital to start flowing back into the sector, which will also require interest rates to start moving down. We’re not that far away.

There are so many incredible developments in biotech right now. And once the markets for small-cap stocks are healthy again, we’re going to enter a golden age for biotech stocks. This is something we’ll be prepared for at Brownstone Research.

Will You Be Covering Crypto?

Dear Jeff, first, let me say that I was disappointed when you left unexpectedly and now I’m grateful that you have returned. I’m anxious to see how your team successfully transitions back to Brownstone Research. However, I’m also involved in cryptocurrency and wonder if your team will be researching this area? Thanks for your attention in this matter!

– William S.

Hi William,

Thanks for your comments, and I’m excited to show you what we’re going to build again. I’m excited to say that my whole team is back together again. Feels like we didn’t miss a beat. And we had the benefit of having some time off and lots of time for deep research. And we’re refreshed to get back at it again.

We’ve also added some new team members that I’ve worked with extensively and am now lucky enough to have them on board full-time at Brownstone Research.

As for digital assets and the blockchain industry, this is another area I’m passionate about for a long list of reasons. I first recommended bitcoin back in 2015 at $240, and just look where it’s at now.

That was just the beginning.

In the past, I had two investment research products focused on digital assets.

The first was Unchained Profits, which was a buy-and-hold research product focused on the highest growth, most promising blockchain projects.

And the second was Neural Net Profits, which was a shorter-term trading product powered by artificial intelligence. They were highly complementary to one another and two great ways to gain exposure to cryptocurrencies.

And yes, I do plan to cover cryptocurrencies and hope to have more specific updates for you in the months ahead.

We always welcome your feedback. We read every email and address the most common comments and questions in the Friday Mailbag. Please write to us here.