Dear Reader,
The market action yesterday was market capitulation… absolute exhaustion. It was the second-largest drop on the Dow Jones Industrial Average in its 124-year history. That means it is something that we will likely see only once in a lifetime… That’s how rare it was.
The current equity markets are heavily “controlled” by computers running algorithms that are programmed to sell stocks based on certain volatility and momentum metrics. This results in exactly the kind of market action that we have seen over the last two weeks.
The good news is that it comes to an end… Those same metrics recognize that stocks are way too undervalued, and the buying kicks in.
While it is painful to watch this unfold, I’d like to offer some very positive developments that show me the recovery is just around the corner:
New confirmed cases have completely leveled off in China. There are just a handful of new cases each day – social distancing helps stop the spread of COVID-19.
We are seeing the same thing happening in South Korea and Japan.
Research just out of China has demonstrated that warmer, more humid weather slows down the spread of COVID-19 just like past airborne viruses – that means that cases in the northern hemisphere will dramatically fall as we enter spring (humidity) and early summer (warmer weather).
Electronic supply chain manufacturers in China are on track to return to full production by the end of this month.
Shipment transportation to airports and seaports for logistics is almost back to normal in China.
Foxconn, the world’s largest contract manufacturer, stated that supplies to its China, Vietnam, and Taiwan manufacturing plants have returned to normal ahead of schedule. Apple is Foxconn’s largest single customer.
Ascletis, a Chinese biotechnology company, has already shown early success with the combination of its hepatitis C and HIV treatment for COVID-19. Early data from a clinical trial on 11 patients demonstrated all 11 have recovered and been discharged from the hospital.
Another China-based biotech company, Hisun Pharma, has been testing its influenza drug. Early tests have demonstrated that patients are clear of the virus in just four days.
Moderna has already begun testing its synthetic RNA vaccine for safety.
And Gilead is beginning clinical trials on remdesivir.
And if anyone is thinking about refinancing their mortgage, this is about as good as it gets. I saw a 30-year fixed mortgage with no points at 3.5% and a 10-year adjustable-rate mortgage at 2.875%. These are rates to take advantage of.
And given that things have ground to a halt for a few weeks in most countries, with the bit of extra time on our hands, refinancing a mortgage is a positive action that we can take regarding our personal finances.
I’m just looking at the data – the things that are actually happening, not the great disservice that the media is doing by spreading fear based on “worst-case scenarios” that have no real substance. There is a lot for us to be optimistic about.
Now let’s get to today’s insights…
Chances are most readers have never heard of a software program called “Foldit.”
Foldit is an online video game that challenges players to fold proteins into shapes that are stable and functional. It started as a research project at the University of Washington’s Center for Game Science and Department of Biochemistry. It launched publicly in 2008. Since then, half a million people have played the game. Here’s a visual:
A Foldit Puzzle
Source: Foldit
As a reminder, proteins are chains of amino acids. They are responsible for every function a living organism’s body performs. The way a protein is folded speaks directly to its effectiveness. Properly folded proteins do the job that they are designed to do. Those that are misfolded can cause disease.
This is an incredibly complex topic. Understanding protein structures is one of the biggest challenges facing the world’s top biologists right now. And understanding the 3D structure of a protein associated with a virus like COVID-19 can help us discover a cure or therapy to fight against it.
That is why we are leveraging the crowd to hopefully find a solution. Foldit just launched its “coronavirus puzzle.” In this challenge, players are trying to design proteins that can bind to the COVID-19 virus in a way that stops it from spreading in the human body.
This is important because COVID-19 is a new type of coronavirus. If a Foldit player can “crack the code” and design the right protein structure, it could be used to produce a cure for COVID-19.
And what’s powerful about this is that the game is open to anyone. Players don’t need a medical background. This enables truly out-of-the-box thinking.
Now, I know that sounds counterintuitive. Shouldn’t biologists, virologists, and epidemiologists handle this problem?
To answer that question, we need only look back to the Human Genome Project. Funded by the National Institutes of Health (NIH), the project set out to map the human genome in 1990.
At first, only a core group of experts worked on the project. They came up with a solution that could sequence the genome in four hours with 70% accuracy.
Then the project was opened to Harvard Medical School. The school was able to sequence the genome in an hour with nearly 80% accuracy.
Finally, the project was opened to the “crowd.” And by putting the best crowdsourced solutions together, the project could sequence the genome in 10 seconds with more than 80% accuracy.
Simply put, the crowd provides different ways of looking at the same problem. With the right skills and a little bit of luck, there’s a great chance we can crowdsource a cure to COVID-19. I’m excited to see what progress is made.
Over the weekend, the Trump administration announced that Verily, Google’s life sciences division, is developing a website to help people who may have been exposed to COVID-19. It is calling it “Project Baseline,” and it will be a public-private partnership between Google and the U.S. government.
The website will allow people to register and go through a flow chart of questions to determine whether they should seek testing for COVID-19. If the answer is yes, the site will direct them to a local testing center. And if the test comes back positive, the site will help patients sign up for clinical trials for a treatment being developed.
Google plans to launch the site in the Bay Area this week. It will test it, fix the bugs, and then roll it out across the country. Apparently, 1,700 Google engineers volunteered to work on expediting the project.
Google is following the old Silicon Valley playbook here – launch immediately in the Bay Area, optimize, and then roll out everywhere else.
I think this is a great idea. The press criticized the Trump administration about this partnership, even going so far as to say that it isn’t true, but Google has since come out and stated clearly that it is working hand in hand with the U.S. government and does in fact plan on rolling it out nationwide.
Politics aside, this is a fantastic development. Government agencies can be slow to act, so working with the private sector – which can get a functional website up and running in days, test its system quickly, and then expand nationwide – is great for everyone. The mass media needs to report on all of the positive progress being made rather than doing its best to instill fear and negativity.
We’ll conclude today with a big-picture health care topic…
Deep within Amazon is a skunkworks group of 100 people called “Grand Challenge.” It is spearheading what it calls “Project Gesundheit.” And, incredibly, it is all about finding a cure for the common cold.
Research estimates that the common cold costs the U.S. economy $40 billion per year in physician visits and lost productivity. And each year it is responsible for nearly 200 million missed school days. No doubt, the market for a cure would be massive.
So it’s no surprise that a company would want to work on this. We just wouldn’t expect that company to be Amazon.
But then again, Amazon has had incredible success outside of its core e-commerce business. It has shown the ability to think outside of the box.
And if we remember, Amazon is already working on health insurance solutions. And it will be able to deliver prescription medicines right to our home through its acquisition of PillPack. So Amazon has been strategically building a health care “division” for a while now.
And here’s what I think is really going on…
Amazon is moving toward becoming a first point of contact for medical care. After all, it has the most successful AI-enabled smart speaker (Amazon Echo) and smart assistant (Alexa). This device is in our homes, right there to help out at a moment’s notice.
Amazon could produce small connected devices that could run various tests like taking our temperature or even analyzing our blood. Alexa could analyze the results, send them back to the cloud, and then make a diagnosis.
From there, Alexa could order prescription medicine for us, have it delivered right to the house within hours, and perform a follow-up within a few days.
That’s a big idea. How many people would choose to see “Dr. Alexa” in their kitchen rather than drive across town to the doctor’s office… only to sit in a waiting room full of coughing, sneezing people?
I think the answer is a lot, and what is happening right now with COVID-19 is a perfect catalyst for this kind of solution.
And if Amazon can develop a vaccine to cure the common cold, all bets are off…
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. Readers know I’m a proponent of blockchain technology and the long-term investment potential of quality digital assets.
Tomorrow, my friend and colleague Teeka Tiwari is holding a special cryptocurrency training event that readers might be interested in.
With this market volatility, it may sound strange to invest in speculative assets like cryptocurrencies right now. But like me, Teeka believes the recent downturn is temporary and is presenting a great investment opportunity for quality projects.
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
