Money and markets: the latest technology to invest in – gene editing
Genetic engineering using the new CRISPR technology is just reaching the US stock market. This brand new sector has the potential to explode in price and continue to grow for decades.
Most people are aware that the dot-com boom was technology-based, but few realize that since the very dawn of stock markets in the 18th century, the entire shooting competition has been driven by technological advancement. The history of the stock market is the history of financing and speculation in technology: sailing, navigation, canals, railways, radio, cars, electronics, computers, the Internet, and finally the Internet applications such as Facebook, Google, and Amazon.
So the way to invest is to discover new technology at a stage where it’s exciting enough to be included in publicly traded companies, but not so late that it’s a later entrant buying at increasingly higher valuations.
Some people call this investing, but it is ultimately speculation, a less respectful way of typing someone who puts their money down to substantiate an opinion. Some will call it gambling, but the thing to remember about gambling is that there are groups of people who make huge amounts of money from gambling, namely bookmakers and casinos, and the only difference between them and the customer is that for ‘the house’ the odds are skewed in their favor. Choosing to invest in technology before it breaks into the mainstream is investing with an edge as skill is the edge in the stock market and spotting technology is definitely a skill.
So I’ve written about the coming hydrogen economy and why the platinum group metals are a place to invest alongside other exotic metal producers and IP holders, but you should never stop looking for the next big thing.
The next big step is definitely genetic engineering and it just hits the US stock market. Like nuclear energy, genetic engineering has been taboo since childhood; sci-fi monster movies are embedded in the minds of many, with evil mutations wreaking havoc. So the good old trick of a rebrand seems to do the job of slipping this unstoppable technology under the radar.
Now called gene editing, it offers hope and potential almost limitless. Solving genetic diseases, the horrific consequences of which afflict millions, is just the tip of a vast iceberg of positive possibilities, and in an incredible breakthrough, a new technology’s ability to repair and alter DNA has ushered into a new era.
This technology is Crispr. I’m not a geneticist, but my understanding of “finance” is that Crispr provides a cheap, fast, and accurate way to cut out and/or add new pieces of DNA code to existing living cells. Jennifer Doudna and Emmanuelle Charpentier were awarded the Nobel Prize for developing the gene-editing tools that led from Rodolphe Barrangou’s yogurt research to the development of phage-resistant yogurt bacteria. (Blessed are the cheesemakers.)
By the time you read this, I probably own all of the CRISPR tech companies listed, including CRISPR Therapeutics, Editas Therapeutics, Intellia Therapeutics, and Beam Therapeutics, all in the US, but while this is an exciting cohort these days, just like the hydrogen economics theme and for that matter cryptocurrency, this is just the start of a new explosive segment that will grow for decades to come, offering investors who want to learn the nuances of the field an opportunity to build wealth ahead of much of the rest of their lives.
Right now, these companies are comparative minnows with market caps of $4-$11 billion. This may seem like a lot, but when you consider that Tesla could be worth $700 billion and only replace the internal combustion engine in one form of transportation, you can imagine that a technology that transforms the engine of life itself could have some interesting valuations given enough time to capture the imagination of mainstream investors.
People always want names as tips. It is an entropic method that is as inadvisable as it is popular. The most important tip is that this is a new segment that will explode in value and that speculators/investors can use it as a platform for long-term profits.
Biotechs and the so-called pharma are a core segment for investors, especially in the US, and it is only a matter of time before the Crispr-Cas9 revolution breaks out of the specialized press and the mainstream. Things never go as fast as you expect, especially if you have a clear vision of the future. This shortening of the field of view is a disadvantage for seeing what is going to happen, but eventually, it does happen. You could have received an email in 1990 and clearly expected online systems to turn everything upside down, but you’d have to wait a few more years to jump on board the stocks that would then go vertical.
The core idea is that it’s worth getting in early, holding on tight, and constantly winnowing the industry down to the small subset that will be the behemoths 20 years from now. The sooner you can find such a sector, the more upside there is. As such, it is a great time to invest as there are crypto, hydrogen economics, and gene editing segments that will have a long and lucrative future for those who are gross enough to dig in and become experts in these technologies.