Biotech Year One: A Year Of Trials Tribulations And Discovery

This was our first year investing in the biotech sector. We had no idea how companies would respond to news, positive or negative. We had no idea what the market understood and how it interpreted data. We had no idea.

The market is its own beast, derived of the aggregate opinions and knowledge of the mainstream thought. And despite incredible advancements, the mainstream’s understanding of biology, physics, and biotechnology remains rooted in early 20th century ideology that has long been disproved.

We understand it is a bold statement to say the vast majority of PhDs, MDs and investors that make up this industry are wrong due to a fundamental flaw in their analysis, but after a year of investing in this space, we have been convinced of this simple yet powerful truth.

Even in the 21st century, with the amount of computing power and algorithms and modern tools available to companies, researchers and analysts, pharmaceutical development remains a trial and error based process. This is because they do not understand biology and physics’ role in biology. Anyone who has done a bit of research into quantum computing will also realize how poor our understanding of physics truly is but that’s a story for another time.

The point is that this trial and error approach and the mental models that support it have far reaching consequences to how biotechnology developments are interpreted by the market.

The market has incredible difficulty trusting new data that does not fit into these preconceived mental models. And because those models are so poor and so fuzzy even reasonably well understood trial results have to be proven again and again over larger patient populations.

The mainstream believes life is dumb and random, that cells are a liquid soup of biochemicals and seawater governed by nothing more than chance encounters driven by Brownian motion.This is no more evident in the hubristic subsector of gene therapy. These trial and error gurus believe it is life that has made the mistake that only they can correct. When in fact life (and in this case our bodies) are responding to environmental conditions. We hold the exact opposite view of the mainstream; we believe that life is intelligent and coherent down to the cellular level or as we like to say:

“Life does not play dice.”

Life uses natural genetic engineering, a complicated and remarkably intelligent system that far surpasses our artificial means of doing, in order to adapt to changing conditions of existence. Natural genetic engineering is specifically activated, targeted, and precisely executed. Living systems are quantum coherent and therefore “know” more information about themselves than we are capable of knowing through outside measurement.Artificial genetic modification invariably interferes with natural genetic modification. In fact, it depends on disrupting and overriding the cell’s own precisely regulated natural genetic modification, which explains its total lack of precision, with many uncontrollable and unpredictable effects.

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Disclaimer: My blog is the diary of a twenty something hedge fund manager who has never stepped foot inside a wall street bank. I have not taken an economic or business course since high school ...

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