There are a myriad of important political, social, economic, and healthcare issues that are plaguing our globe today. But Jeremy and I are still long-term optimistic on the stock market.
This is because we still see so much potential in humanity. There are nearly 8.1 billion individuals in the world right now, and the vast majority of people will wake up every morning wanting to improve the world and their own lot in life. This – the desire for progress – is ultimately what fuels the global economy and financial markets. Miscreants and Mother Nature will occasionally wreak havoc but we have faith that humanity can clean it up. To us, investing in stocks is ultimately the same as having faith in the long-term ingenuity of humanity. We will remain long-term optimistic on stocks so long as we continue to have this faith.
There may be times in the future when it seems that mankind’s collective ability to innovate is faltering (things are booming now with the AI rush). But here are three stories I learnt recently that would help me – and I hope you, too – keep the faith.
The first story is from Morgan Housel’s latest book Same As Ever. In it, he wrote:
“Author Safi Bahcall notes that Polaroid film was discovered when sick dogs that were fed quinine to treat parasites showed an unusual type of crystal in their urine. Those crystals turned out to be the best polarizers ever discovered. Who predicts that? Who sees that coming? Nobody. Absolutely nobody.”
What the quinine and polarizers story shows is that the root of innovative ideas can show up completely unexpectedly. This brings me to the second story, which is also from Same As Ever. This time, it is Housel’s recounting of how the invention of planes moved in an unpredictable path that led to the invention of nuclear power plants (nuclear power is a zero-emission, clean energy source, so it could play a really important role in society’s sustainable energy efforts), and how a 1960s invention linking computers to manage Cold War secrets unpredictably led to the photo-sharing social app Instagram:
“When the airplane came into practical use in the early 1900s, one of the first tasks was trying to foresee what benefits would come from it. A few obvious ones were mail delivery and sky racing.
No one predicted nuclear power plants. But they wouldn’t have been possible without the plane. Without the plane we wouldn’t have had the aerial bomb. Without the aerial bomb we wouldn’t have had the nuclear bomb. And without the nuclear bomb we wouldn’t have discovered the peaceful use of nuclear power. Same thing today. Google Maps, TurboTax, and Instagram wouldn’t be possible without ARPANET, a 1960s Department of Defense project linking computers to manage Cold War secrets, which became the foundation for the internet. That’s how you go from the threat of nuclear war to filing your taxes from your couch—a link that was unthinkable fifty years ago, but there it is.”
This idea of one innovation leading to another, brings me to my third story. There was a breakthrough in the healthcare industry in November 2023 when the UK’s health regulator approved a drug named Casgevy – developed by CRISPR Therapeutics and Vertex Pharmaceuticals – for the treatment of blood disorders known as sickle cell disease and beta thalassaemia. Casgevy’s greenlight is groundbreaking because it is the first drug in the world to be approved that is based on the CRISPR (clustered regularly interspaced short palindromic repeats) gene editing technique. A few weeks after the UK’s decision, Casgevy became the first gene-editing treatment available in the USA for sickle cell disease (the use of Casgevy for beta thalassaemia in the USA is currently still being studied). Casgevy is a huge upgrade for sickle cell patients over the current way the condition is managed. Here’s Sarah Zhang, writing at The Atlantic in November 2023:
“When Victoria Gray was still a baby, she started howling so inconsolably during a bath that she was rushed to the emergency room. The diagnosis was sickle-cell disease, a genetic condition that causes bouts of excruciating pain—“worse than a broken leg, worse than childbirth,” one doctor told me. Like lightning crackling in her body is how Gray, now 38, has described the pain. For most of her life, she lived in fear that it could strike at any moment, forcing her to drop everything to rush, once again, to the hospital.
After a particularly long and debilitating hospitalization in college, Gray was so weak that she had to relearn how to stand, how to use a spoon. She dropped out of school. She gave up on her dream of becoming a nurse.
Four years ago, she joined a groundbreaking clinical trial that would change her life. She became the first sickle-cell patient to be treated with the gene-editing technology CRISPR—and one of the first humans to be treated with CRISPR, period. CRISPR at that point had been hugely hyped, but had largely been used only to tinker with cells in a lab. When Gray got her experimental infusion, scientists did not know whether it would cure her disease or go terribly awry inside her. The therapy worked—better than anyone dared to hope. With her gene-edited cells, Gray now lives virtually symptom-free. Twenty-nine of 30 eligible patients in the trial went from multiple pain crises every year to zero in 12 months following treatment.
The results are so astounding that this therapy, from Vertex Pharmaceuticals and CRISPR Therapeutics, became the first CRISPR medicine ever approved, with U.K. regulators giving the green light earlier this month; the FDA appears prepared to follow suit in the next two weeks.”
The manufacturing technologies behind Casgevy include electroporation, where an electric field is used to increase the permeability of a cell’s membrane. This enables molecules, such as genetic material and proteins, to be introduced in a cell for the purposes of gene editing. According to an expert-call on electroporation that I reviewed, the technology has been around for over four decades, but only started gaining steam in recent years with the decline in genetic sequencing costs; without affordable genetic sequencing, it was expensive to know if a gene editing process done via electroporation was successful. The relentless work of Illumina has played a huge role in lowering genetic sequencing costs over time.
These show how one innovation (cheaper genetic sequencing) supported another in a related field (the viability of electroporation) that then enabled yet another in a related field (the creation of gene editing therapies).
The three stories I just shared highlight the different ways that innovation can happen. It can appear from the most unexpected places (quinine and polarizers); it can take unpredictable paths (from planes to nuclear power plants); and it can occur when supporting technologies improve over time (the development of Casgevy). What they signify is that we shouldn’t lose hope in mankind’s creative prowess when it appears that nothing new of significance has been built for a while. Sometimes, what’s needed is just time.
Disclaimer: The Good Investors is the personal investing blog of two simple guys who are passionate about educating Singaporeans about stock market investing. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life. I currently have no vested interest in any company mentioned. Holdings are subject to change at any time.