- (1:00) - Neuroscience: The 4 Theaters Of The Brain
- (5:00) - Investors Train Their Brains to Trade: Assumption and Perception
- (10:00) - Neurology Is The New Oncology: The Boom In Brain Sciences
- (14:00) - Biotech Companies With Breakthrough Research
- (21:00) - Appreciating Differences: The Story Of A Misdiagnosis
- (34:00) - Episode Roundup: Podcast@Zacks.com
Welcome back to Mind Over Money. I'm Kevin Cook, your field-guide and story-teller for the fascinating arena of behavioral economics. Today’s episode is all about your brain, from three different angles.
First, I want to share with you a lesson I used to teach beginning and intermediate traders about their perception and their assumptions.
Second, I’m going to talk about some of the exciting biotechnology companies doing breakthrough research in neurological and neurodegenerative diseases like Parkinson's, multiple sclerosis, and Alzheimer's.
And last, I am going to tell you a story about a young woman who led a torturous first third of her life with a neurological condition that went undiagnosed, and where no drugs would have helped anyway.
That story comes from a terrific book I’m reading by Dr. John Ratey, a clinical professor of psychiatry at Harvard Medical School...
A User’s Guide to the Brain: Perception, Attention, and the Four Theaters of the Brain
Ratey’s Four Theaters is a description that really appeals to me based on my reading of other neuroscience books over ten years ago. Back then I concluded that behavior and identity are a complex dance created by several sometimes-competing forces-- what I call your "multi-mind."
And this ties into something I realized in the early 2000’s when I was training traders. First, the reason short-term trading is so hard is because our brains evolved for very different challenges than those of watching our money fluctuate up and down wildly on a screen full of red and green arrows.
So I say "your brain wasn't made to trade" because we are barely equipped to manage probability and risk in long-term planning, let alone minute by minute. We naturally do the wrong things like keep losing positions and take profits too quickly, the two-ingredient recipe for trading failure.
This is why over 95% of those who try short-term trading in stocks, currencies, or commodities -- especially with leverage -- will fail and lose most, if not all, of their money. Even though the odds are better than Vegas, we stack them against ourselves with unconscious cognitive biases and bad habits of emotional decision making.
To hear a powerful analogy I use to teach traders about their biases and their "multi-mind," be sure to listen to my full podcast attached to this article.
Meet Tony Coles of Yumanity
Doing some preliminary research for this podcast, I found a great article by Matthew Herper writing for Forbes in February of 2015. Matt says "I cover science and medicine, and believe this is biology's century." I couldn't agree more.
That's why I love running a new portfolio here at Zacks called Healthcare Innovators where I get to focus on the megatrends of science and medicine.
Matt's story "The Coming Boom In Brain Medicines" starts out with a great introduction to a scientist you should know...
TONY COLES COULD have had any job he wanted in the drug industry. In five years at the helm of cancer drug developer Onyx Pharmaceuticals he increased its market cap eightfold by purchasing an experimental blood cancer drug for $800 million, developing it into a big seller and flipping the whole company to Amgen for $10.4 billion in October 2013. He personally made $60 million on the deal. Biotech watchers expected him to start another cancer company or even command a drug giant like Merck or Pfizer.
Instead, Coles, 54, is using his own money to build a Cambridge, Mass.-based startup called Yumanity that is using yeast, the microbes that help make bread and beer, to study how misfolded proteins in the brain cause Alzheimer's, Lou Gehrig's disease and Parkinson's, and to create drugs based on that knowledge. There's already interest from Big Pharma. Coles says he chose to attack brain diseases, not tumors, because the need is so dire and the science is so fresh.
"We've got 50 million people around the world who have these diseases, costing $650 billion a year, and lots of families like mine that have been affected," says Coles. "I had a grandmother who died of the complications of Alzheimer's disease. I think about my own health as well."
(end of excerpt from Matthew Herper's Forbes article)
The New Next-Frontier in Biotechnology
In my Healthcare Innovators portfolio, I am very focused on the frontiers of cancer research. Especially exciting is the field of "immuno-oncology" where researchers are learning to harness a patient's own immune system to fight his or her cancer. The research and the treatments are costly, but the rewards could be enormous -- and life-saving.
A second disease-fighting frontier I follow is that of "gene editing" where the science is allowing a person's genome to be altered and possibly cure inherited ailments.
But the new frontier I have very limited experience with as a healthcare investor is the neurological and neurodegenerative diseases. One company I have favored and owned for its Parkinson's psychosis treatment was Acadia Pharmaceuticals (ACAD - Free Report) .
And I currently own Sarepta Therapeutics (SRPT - Free Report) for the successful launch of their drug for the treatment of Duchenne muscular dystrophy.
Alfred Sandrock, the Chief Medical Officer of Biogen (BIIB - Free Report) has said that "neurology is the new oncology." And I find it thrilling that this $60 billion company with 12-month trailing sales of $11.7 billion, is so engaged in the new next-frontier in biotech.
In the podcast, I describe other companies involved on this frontier like Alkermes (ALKS - Free Report) and Neurocrine Biosciences .
I also own Sangamo Therapeutics (SGMO - Free Report) primarily for their "zinc finger" gene-editing technology. But it doesn't hurt that they have early-stage programs in Huntington's disease and Alzheimer's in their R&D pipeline too.
Appreciating Differences, Appreciating Health
I close the podcast with a 10-minute story that Ratey shares of a woman named Rickie, who was actually the subject of the 1990 book of the same name by Frederic Flach, a psychiatric researcher at Cornell University.
It's an incredible story ofpersonal tragedy and eventual triumph that you must hear.
My goal is not just to help you learn about the brain and perception but also to encourage you to recognize others who may seem very "different" than you and why that might be.
And also to appreciate your own health, to the degree you have it. That's one I often take for granted myself.
Disclosure: I own shares of SRPT and SGMO for the Zacks Healthcare Innovators portfolio.
Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the Healthcare Innovators portfolio.