Dear Reader,
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology.
Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here.
Over the next two weeks, The Bleeding Edge is going to look a little different. I’m going to review the predictions I made at the end of last year and see whether they came true… and share some of my predictions for the new year ahead.
Be sure to tune in for that. And not to worry – we’ll be back to the usual format of The Bleeding Edge on January 4.
It has been an absolutely incredible year in the world of technology and biotechnology. Our natural reaction might be to think that things will take a breather in 2021 due to the torrid pace that we’ve all witnessed. But we’d be wrong to think that.
The developments and breakthroughs of 2020 will only fuel a faster pace for technological advancement. And the same is true for investment in these areas. We witnessed record levels of early stage investment and public offerings. More money is flowing in, not less. And we’ll continue to see such heightened levels of interest in 2021.
In short, we’re going to be busier than ever.
And I’m going to kick off the year with a special project that I have been working on for all of 2020. It’s a new research product with the single goal to get normal investors into pre-IPO shares of some of the most exciting private companies on the planet. This will be the first new product that I launch under the Brownstone Research banner.
And I can’t wait. I’ll have more information to follow in the coming weeks…
With that said, I want to wish all of you a wonderful holiday season. I think we all need a break after a year like 2020. And thank you sincerely for taking the time to hang out with me here at The Bleeding Edge.
Now let’s turn to our mailbag questions…
Let’s begin with a question on the future of car insurance:
Hi, Jeff, I have a question that is sort of out of the box. What do you think is going to happen to vehicle insurance, say, over the next decade when there is a good chance of more autonomous vehicles on the roads?
In other words, would anyone feel they have to pay it since technically the software/technology is taking that responsibility out of our hands? If we are involved in an accident, do we just send the bill to Elon Musk?
Thanks so much for your inquisitive insight on a range of topics
– Jeff S.
Hello, Jeff, and thanks for sending in your “out of the box” question. You’ve actually brought up a very interesting topic, and you’re on the right track.
Yes, car insurance is absolutely going to change over the next decade as more autonomous vehicles hit the road. Initially, we will likely see a decrease in our car insurance premiums. Here’s why…
Up until 2009, car insurance premiums had been declining due to safety improvements to cars. But with the popularization of smartphones, we began to see the number of accidents tick up due to driver distraction. And car insurance rates began to climb again.
The sad truth is that in the U.S., driver error causes around 94% of traffic accident deaths. And globally, road traffic deaths are the leading cause of death among young people aged five to 29.
In a world of autonomous vehicles, however, the auto insurance sector will be reduced as much as 70% by 2050, according to estimates.
The reason is simple. If driver error causes so many accidents, then self-driving cars will greatly cut down the number of accidents that happen. A 90%-plus reduction in accidents will reduce the insurance industry’s costs. This will directly impact and reduce car insurance premiums.
I also believe that there will be one other major development with regard to insuring autonomous vehicles.
As you suspected, the burden will shift toward the autonomous vehicle manufacturer or a self-driving car service. After all, if the consumer isn’t actually driving the car, who is responsible in the event of an accident?
During the transition from mostly autonomous to fully autonomous technology, I believe we’ll have a hybrid model. Drivers will be responsible for lower insurance premiums due to dramatically fewer accidents. Carmakers will have greater insurance liability in the event that a self-driving car malfunctions.
There are a few ways I can see this playing out in practice…
If consumers actually purchase self-driving cars outright from a manufacturer, then they will likely pay greatly reduced insurance premiums. However, I can imagine that some self-driving car manufacturers will only lease the vehicles. In this case, I can see a selling point being that the manufacturer will provide the insurance, since the driver isn’t touching the wheel.
And for car manufacturers that don’t develop their own self-driving technology and instead rely on a tech company to do that for them, we’ll see a different model.
Let’s use a hypothetical example: Honda decides to license Google’s Waymo self-driving software to make its cars autonomous.
In a situation like this, Google would likely be insuring Honda for any accidents that occur related to the self-driving software. After all, Google created it.
Another new business model that will emerge is companies that manage fleets of shared autonomous vehicles (SAVs). SAVs will be popular because they will be extremely affordable, and consumers will never have to worry about car maintenance. Whenever they need a car, the SAV company will have one available, waiting to pick them up and transport them.
A business model like this would likely dictate that the SAV company provide the insurance.
Ultimately, this transition to self-driving cars will dramatically change the landscape of the automotive industry. It will affect not only car insurance but also the rental car industry and even pay parking lots. New businesses will be created as well.
I’m very excited to see the self-driving trend really start to play out.
Next, a reader wants to know more about protein folding:
Hey, Jeff, I saw a neat article about biotechs and AI where the phrase “protein folding” came up in discussions of advances in genetics, pharmacology, and medicine. Your style of teaching is always very easy for me to process, so I was hoping you might share some of your expertise about it. Thanks again for your awesomeness. It’s exciting to see my “Jeff Portfolio” blooming!
– Dan D.
Hi, Dan. Thanks for your kind words. Protein folding is a very fascinating topic with big implications for biotechnology and medicine, so I’m glad you asked.
In essence, proteins are long chains of amino acids. Depending on the order of the amino acids, these proteins serve different functions. In fact, our bodies use tens of thousands of different proteins, which are responsible for every function our bodies perform.
And all proteins fold into specific, three-dimensional shapes in order to function properly. Unfolded or misfolded proteins contribute to many diseases.
Additionally, we can learn a lot from a protein’s structure. The structure tells us how it will impact living organisms. It also determines what other compounds (such as pharmaceuticals) the protein can bind to. With this information, we can design the perfect biopharma therapies for any possible ailment.
However, proteins fold in very complex ways. This makes a protein’s structure hard to analyze. Drug design has remained largely a manual, trial-and-error process for this reason.
As a result, researchers have struggled for years to understand protein folding better.
Back in 1972, Nobel Prize winner Christian Anfinsen theorized that a protein’s amino acid sequence would determine its structure when folded. So if we could analyze the amino acid sequence, we’d know how the protein would interact with other compounds.
But at the time, there wasn’t enough computing power on the planet to analyze all the possible folding sequences. It was an impossible problem to solve.
Until now.
As I wrote recently, there’s been an important advancement in this space.
At the end of November, Google’s artificial intelligence (AI) subsidiary DeepMind announced that its latest AlphaFold software can accurately predict the folding of a protein, based solely on its amino acid sequence, with 92.4% accuracy.
This is an Earth-shattering breakthrough.
For the biotechnology industry and the burgeoning precision medicine trend, this is like going from classical computers to quantum computers. This development is going to accelerate drug discovery and precision medicine exponentially.
DeepMind’s AlphaFold Neural Network Model Architecture
Source: DeepMind
And AlphaFold’s accuracy is only going to improve from here. In 12 months, its accuracy will likely jump to 98% or better. And in two years, its accuracy will be close to 100%.
This is an invaluable tool for the biopharma industry to accelerate drug development. And it’s ultimately something that will have a remarkably positive impact on society.
Thanks again for your question, Dan.
Let’s conclude with a reader’s remarks about our recent chance to take profits:
Good day, Jeff. I have been following Brownstone Research since you started it, and I used to think your advice, and therefore you, were awesome. But today… I think you are freakin’ awesome!!! Two Early Stage Trader stocks shooting up in two days enough to sell (for me, it was an 80% gain and a 117% gain).
I have long thought you were the best – just didn’t write in and tell you. Have tried various other investment newsletters, but I have canceled them all, as they cannot hold a candle to your three portfolios.
Just letting you know how much I appreciate all the hard work you and your team do. It is rare to find someone so committed to what they do! Bless you all and have a great Christmas.
– Barbara N.
Hey, Barbara, thanks for writing in. I’m so glad to hear you’ve been able to profit with my research. While COVID-19 lockdowns and fear delayed many of our stocks’ clinical trials by six months or more, we’re finally seeing them hit their stride once again.
And I’m confident we’ll be able to take more profits in the weeks ahead in all of my different research services. I’m very optimistic about things to come in 2021 in the world of technology and biotechnology.
Thank you for your belief in my work. I’ll be working just as hard for my subscribers next year… probably even a bit more.
And to all my readers, I wish you a wonderful Christmas and a Happy New Year!
That’s all we have time for this week. If you have a question for a future mailbag, you can send it to me right here.
Have a good weekend.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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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.
