Since the biotechnology bubble burst in 2015, resulting in a 40% bear market, something has been building that I've been waiting several quarters for -- a resumption of the great, long-term bull market.

This week, the Nasdaq Biotechnology Index ETF [IBB] surmounted a closing level that takes back half of its losses. I think we have a lot more room to go, and maybe even new highs eventually.

But the rules are different this time in this second big wave of the bio bull. You can't simply ride the next hot tip or momentum play. Your research and stock selection must have certain discipline, or else you'll get burned.

Here I share 4 keys in my research process and why they are so important.

1) Investment Bank Research

I read dozens of research reports every week from Wall Street's top investment analysts. Now, we all know that these analysts are conflicted from time to time as one side of the company is providing advisory or capital/underwriting services for a fee while the "pure research" side is not supposed to be influenced by that business.

But for the most part, there are many good and un-conflicted analysts devoted to their research. Many are PhDs in the life sciences or even have medical degrees and they care about the quality of their analysis. Reading their reports every week gives me an edge on understanding the most complicated investing in the world.

And it's how I decided to pull the trigger on Sarepta Therapeutics [SRPT] in May as they tackle a unique disease called Duchenne muscular dystrophy.

2) Big Brother Partnerships

How do you build a billion-dollar business in medicine? Sometimes it takes a few hundred million dollars in R&D. That's where big Pharma companies come in to help emerging ones with drug pipeline clinical trials that keep the FDA happy. The big firms are constantly looking for exciting new R&D, often before it even leaves university labs.

When I see a big company -- whether from traditional Pharma or Biotech -- team up with a little guy, I know something good is in the pipeline and I start paying more attention to that potential breakthrough. If "big brother" helps get my target through Phase 2 clinical trials with positive results, the stock may already be on the launch pad.

Knowing the long-term commitment of partner Sanofi gave me the conviction to buy Regeneron [REGN] at $366 this year.

3) Medical Journals, Company Presentations, and KOL Circles

There are many great places that new research can be found and company presentations are some of the best. Company scientists know they can't just "pull the wool" over the eyes of Wall Street analysts. When they publish in peer-reviewed academic journals or make presentations at industry conferences, there are just as many doctors in the room as number-crunchers.

And those presentations often are placed on company websites where I can see the entire slide deck and watch video recordings. This is a great way to not only understand new science but also to be tuned-in to the criticism from scientific peers. You can't really understand an R&D thesis unless you can also point out its potential flaws.

This brings up a class of expert known as the KOL, or Key Opinion Leader. In BioPharma especially, there are hundreds of doctors and researchers involved at all levels of drug and disease R&D whose opinions are widely respected in the global medical community. For doctors at the front-lines taking care of their patients, who don't always have time to stay up-to-date on the latest research, the view of a KOL can often be an important influence in their decision to try a new treatment option.

The payoff here was greater confidence in my thesis to buy Juno Therapeutics [JUNO] in the low $20s on a low-risk/high-reward bet they will be a game changer in the exciting field of immuno-oncology.

4) Institutional Buying and Selling

Lastly, I still like to pay attention to what the big money is doing. There are many fund managers running tens of billions in investment war chests that are ear-marked solely for the healthcare field, and some are focused entirely on biotech.

Many of these managers are some of the most serious and disciplined of medical sector investors. So, I pay attention to what they are buying and selling and I don't mind following their money trail if enough of my other criteria are in line.

Gilead Sciences [GILD] has been a sell for years now. But many have been bottom-fishing in the belief that the hepatitis-C juggernaut is steps away from finding its next blockbuster acquisition. I thought so too in the mid-$60s this year.