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Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
Our Future Is Biotech with Andrew Craig DWI-EP297
You can get the new book "Our Future Is Biotech" by Andrew Craig here: https://amzn.to/3AAeiCm
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You can download your FREE report on how you can avoid financial mistakes as a dentist using the link just here >>> dentistswhoinvest.com/podcastreport
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Ever wondered if a robot could nail your dental filling? In this episode, we dive into the cutting-edge realm of biotechnology and its game-changing effects on dentistry. Andrew joins us to unpack insights from his latest book, defining biotech and comparing it with medtech. We chat about the groundbreaking debut of the first-ever robotic dental filling and its potential impact on dental pros and the future of oral care.
We then take a whirlwind tour of the biotech revolution, from ancient selective breeding to today’s gene-editing marvels like CRISPR. Hear how these advances could address important environmental and human concerns, such as healing diseases and restoring ecosystems. We explore the dramatic advances in genetic sequencing and the vital role of global scientific teamwork in pushing these breakthroughs forward.
But that’s not all! We’ll explore how biotech might shake up industries beyond medicine. Imagine a world where cultured meat and lab-grown seafood transform farming and fishing, leading to significant ecological recovery. We also delve into the concept of the technological singularity and where biotech companies might be headed, drawing parallels with the rapid rise of tech giants. Tune in for an episode brimming with visionary ideas and expert insights that could change the game.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional.
What is up everybody? Welcome to Andrew and I's impromptu zoom session today, live facebook session on everything and everything biotech. Andrew and I have been meaning to do this for quite some time because obviously this is highly pertinent to dentists, given that it's on the subject of biotech, which is something that has ramifications in our industry, and Andrew is a massive proponent of an investing thesis as to why biotech, well, by the looks of it, is going to be a hot topic, a hot sector, over the next 10, 20, 30, 40, 50 years ongoing, and that's what we're here to talk about today. And, of course, Andrew new book, which covers exactly all of this stuff. But anyway, before we get on to that, Andrew, how are you? How have you been? It's been too long yeah, really good.
Andrew:well, although it's very kind of you to say that, because I think this is either our third or our fourth- I actually think it's more than that.
Dr James:I honestly think it's like fifth or sixth. But yeah, you're right, we're getting close to double digits, more than single digits now.
Andrew:Although at least today's subject matter is quite a big departure from everything in the past, which was obviously much more fundamentally about investment big picture, whereas today's about biotech specifically yeah, I hope is interesting for your audience, given you know what they've had to endure in terms of learning to get to the point of being dentists and how scientifically literate they are compared to.
Dr James:You know the average audience that made me smile, right, because you know what that's the interesting about dentists? Yes, we've had to endure is a good word a lot of learning just to get to where we are, but we keep coming back. Man, we love this shit, bro. We still want to learn, we still want to increase our knowledge every single day. A lot of dentists get a real buzz out of learning, which is brilliant, because obviously dentistry is such an ever evolving, constantly evolving space, so that's a good thing.
Andrew:That trade is married up with their skill set in their profession, which is nice yeah, and I mean I guess you know you can see in a lot of areas of dentistry that you have to do that. You know. Obviously I sort of vaguely follow bits and pieces going on in the group in lurking in the background and you know a lot of stuff getting posted by the people who work on the implant space and for what it's worth I um, when I was a an evil scaly skin city stockbroker back in the early noughties, some of our biggest success stories is like strong by recommendations were straumann and nobel biocare, which I'm sure, yeah, we, we were, we were pushing nobel biocare and straumann as investments.
Andrew:you I don't know more than 20 years ago now, I guess, and they went from being fairly small companies to being really much bigger companies. I'm sure everybody on the call is aware.
Dr James:They're the big cheeses now. Strauman at least, yeah.
Andrew:So how do you want to do this then? I mean, basically, as you and I were saying, before you click record, I always sort of take the mick out of myself that you know I could literally just sort of monologue about biotech for 45 minutes to an hour or actually even longer, and we probably don't want to subject your guys to that. But you know, I'm obviously very happy to talk about any aspect of it and what's in the book and sort of be led by you as to how you want to do that.
Dr James:Sure and what's in the book, and so be led by you as to how you want to do that Sure. So you know what? Actually, we hit upon something just off camera as well. That I thought was a really nice way to kick things off. So, guys, just for context, before Andrew and I jumped on today, I was talking, I was telling Andrew about how there's been a recent development in the dentistry sphere, or dentistry world, where I saw a video and someone shared this in one of the bigger dental groups and I knew a few other dentists have saw it as well.
Dr James:But if you haven't seen it, this is cool news for everybody who is listening to this podcast today the very first filling ever performed purely by a robot, and you can literally see there's this guy and he's like lying back in the dental chair, like this right, and there's this big machine over the top, off from like a spider almost, and you can see the drills and everything moving around. I don't know how they cook somebody into this, but they find someone who is a willing participant. Okay, because it looks very. How can you say, oh, you know, and I quite scary a little bit you know it's fiction.
Andrew:Good word is that a robotic? Is that a human being piloting a robot or is that a robot using code to make? Yeah, okay, fine, pure ai here.
Dr James:No, no human involved, it's not a surgical machine, it's not. It's not a robot, yeah, it's not a human controlling it. I'd say pure ai. So anyway, this guy had a filling, I believe, and I saw it. He had rubber dam on and everything. So this machine was going all out to do a really high quality filling, which was really cool, and I believe it was a class two for the dentist in the audience. Obviously that means you're breaking down the marginal ridge, so it's a little bit more intricate as well. So fair play to have a program, this machine. But anyway, I was just saying to Andrew off-camera that I was mentioning to him that that had happened and then I said Andrew does that, does that? Is that biotech? Is that what we define as biotech? And then he was like, yeah, medtech. Well, actually biotech is this bigger umbrella definition of a few things. So I thought it would be a nice way to kick off maybe if we could define biotech for the purposes of this podcast today and how you use it in your book?
Andrew:yeah, exactly, so actually it's really important because right at the beginning of the book I want to sort of set out my stall and and so there are a couple of things to say. Firstly, in the book I'm using the word biotech to capture an awful lot to capture life sciences, medtech, the convergence of quantum computing and AI and machine learning with life sciences and biology and everything else. So I can't remember what I said in the book. I said if the title of the book being Our Future is Biotech, medtech, life Sciences, quantum Computing, ai, machine Learning Applied to Health, would have been a little bit of a cumbersome title for a book, so I just left it as Our Future is Biotech, but definitionally. Because the other thing to take a step back on is like OK, what actually?
Andrew:A lot of people have either kind of no understanding at all of what biotech is which in this audience I think is probably unlikely or they have an understanding of biotech that, even notwithstanding my definition of it, is perhaps fairly imperfect, and so I think when most people hear the word biotech, their brain immediately goes to therapeutic drugs. So like biotech is like companies trying to cure cancer or you know any other kind of big, intractable health problem that's a disease like companies trying to cure cancer or you know any other kind of big, intractable health problem. That's a disease like companies developing drugs. And actually, again, I want to take a big step back from that definitionally because, um, actually all biotech is, if you look at like the oxford english dictionary or the chambers dictionary or whoever is defining biotech is the use of living systems to produce products or services, which is a very kind of and and and the sort of slightly quirky thing that I use to talk to sort of unpack that a bit is, you know, and we've been doing that for thousands of years. You know, this isn't biotech so defined. It's not something that's just happened in the last you know, two decades or whatever, because actually, if you think about brewing or yogurt or cheese making, that's biotech.
Andrew:And if you, and actually we have this huge debate about GM crops, like genetically modified crops, but, or now with this gene editing technology called CRISPR, like genetically modifying animals, including ourselves right, which is obviously, we perhaps come on to the whole idea of playing God and how troublesome that is. We've actually been genetically modifying everything for thousands of years as well, and we've done it by selective breeding. So you know, the reason that you get a Bernese mountain dog or St Bernard and a Chihuahua or a Pomeranian are both dogs, right, they're the same species. But the reason that that huge, crazy diversity of breeds of dog exist is, front and center, because of us, because of human breeding and human involvement over hundreds and even thousands of years, right. And similarly, the reason that carrots are orange is because the orange family in Holland, which is the same reason that the Dutch football team wears orange football shirts, right, you know the house of orange. Basically, their horticulturalists bred red and white carrots in order to make orange carrots. So they say, and that's why carrots orange, which is kind of a story, not, and you know. Similarly, tomatoes used to be, but basically poisonous and green, and they're now big and juicy and red. All of which is biotech at the very fundamental level.
Andrew:But what's, I guess, what's the bigger picture thesis of the book, sidestepping those slightly quirky points, is, you know, and I've just spent 10 years right at the coalface of working with biotech companies, and so here's the kind of main thrust of the book is, the last century has been about tech and physics. So you know, obviously, that's aviation, shipping, automotive, electricity, silicon, you know, and lastly, internet, smartphones and all that good stuff. That's tech and physics and that has driven annual returns in the US stock market at least, which most of you guys are well aware of of north of 10% per annum going back a century. So all that innovation using physics and tech and electricity and storage, media and everything else has created trillions of dollars of real wealth in all the tech companies and everything else and fundamentally changed the world.
Andrew:The whole thesis of my book is that the next century is about biotech and biology, and the reason for that is actually fairly prosaic and kind of intractable. And you know it's a function of a structural reality that we all come from, which is that you create economic value, like real economic value is created by solving human problems, you know. So go back, you know, several hundred years, and architecture and construction came about, the building industry came back because we needed houses, you know we needed shelter right, and agriculture and food retail and food distribution came back because we all need to eat, and so on. Those are slightly spurious examples, but you get the general point you create masses of economic value and real wealth by solving human problems and delivering wants and needs, and the biggest problems that we still confront as a species without one in sound too hyperbolic are problems of biology, and so you know, the most obvious one of that is curing cancer or diabetes or, you know, rolling back obesity, solving mental health challenges, you know, is the drugs and the therapeutics. These are all huge problems and obviously the company that, or the companies that functionally cure cancer which, by the way, I think we're only a very few years away effective functional cures for cancer and we can come on to that which, by the way, I think we're only a very few years away effective functional cures for cancer, and we can come onto that which, by the way, will not have horrendous systemic side effects or cost hundreds of thousand dollars. It will just be, you know, almost akin to paracetamol that you can get in boots, right, that's on the horizon, you know, realistically, a possibility within our lifetimes the companies that do that will be, you know, what do you think if Novonordisk is valued at $400 billion, from selling insulin and sorting out celebrities who've got weight problems, ie a Zempik Wegovy right, which everyone will have heard of, what value is a business going to be worth that functionally cures cancer and gives us an oral pill with no side effects. You know a few trillion I would suggest, but I guess the final bit I wanted to finish off on before I ramble on even more is these problems of biology go so much further than human disease.
Andrew:And so what are the other ones? Well, most obviously, environmental degradation. It is biology and biotechnology that will sort out the dispoilment of our, of our oceans. You know it is, it is biotech. Biotech applied to clean power generation, biotech applied to revolutionizing agriculture and agricultural productivity, to repairing our soils, to bioremediation technologies. So you know it's a.
Andrew:The scope of the book is pretty big in the I, and that's why it's called our future is biotech, because it's literally all of the remaining problems that you see on the front page of newspapers or on our news bulletins around environmental degradation, or or the dispoilment of our oceans and the fishing industry, and and you know pretty much everything, and as and as well as the rise of autism spectrum disorder and diabetes and epilepsy, and you know obesity and mental health challenges, the industry that's best placed to solve all of these problems is the biotech industry, and so it's a much bigger thesis than just. Wouldn't it be amazing if we can cure cancer with these new technologies. So yes, how long was that? That was a good 15 minute um monologue um, that was pretty concise.
Dr James:I enjoyed that, man, and, as I say, it's just helpful to give us a little bit of a definition as to how we're defining biotechnologies for the purposes of the podcast, but also for purposes of that book that you talked about just a second ago. Okay, cool. So those are the high-level themes that are going on. Let's let's get granular, because you said one thing that really piqued my interest. Here's the answer on the horizon. So, if a little bit more detail on that because that was that was interesting man so.
Andrew:So, look, with all of these things, um, it's, I think the really important theme which we mustn't underestimate, you know, is the application of exponentials and, and it's so, it's convergence and consilience, and exponentials, and it's the fact that we now have, you know, only very recently a series of interconnected technologies that allow the scientific progress to kind of the the curve to steepen. Um and so examples of that but, you know, until you had a really high speed internet, broadband internet really, really big data in terms of storage and really hardcore processing power in terms of you know just the boldly how powerful computers are to process data, until you have the combination, oh and, by the way, and really good telecommunications technology, which is the same point as the high speed broadband, broadband. Right now that all those things are in place, scientists working in different time zones all over the world can collaborate with massive data sets that are literally, you know, a million times bigger than even what they could collaborate with 20 years ago, because you couldn't, you, literally, you know, if you look at, so there's a nobel prize winning called CRISPR, which is a gene editing technology which won the Nobel Prize in 2020. And Jennifer Doudna, who was one of the co-winners of the Nobel Prize talks about how they were like 10 scientists on nine different time zones, collaborating in real time using apps like Skype and WhatsApp and, obviously, email and everything else. We'd understand, and the kind of general point was they couldn't have made this progress that won a Nobel Prize and is arguably one of the most revolutionary technologies of our lifetime, which gene editing, which is basically the ability to change the genetic makeup of a living thing, which we can perhaps come back to. I mean, that all plays into why we're on the cusp of potentially having effective cures for cancer and lots of other things. But it's, it's the, it's the combination of all these different factors that have happened in parallel, which are the, the sort of the, the various legs of the stool that enable us to now to make a massive leap forwards. Um, and and if you didn't have any one of them, we wouldn't be where we're at. But then, so, then, into specific. So so CRISPR, so sorry, taking a step back, without all these technological developments, we wouldn't have a thing called next generation sequencing, and so NGF.
Andrew:Next generation sequencing is basically analyzing the genetic code of a living thing. Right and it, and it the first time we completed mapping the human genome. So and look at basically the the X billion bytes of what our genetic code is made from, that took anywhere. It's estimated between three and five billion dollars, and it took 13 years and they finally announced it and I I on over its 2000 or 2001, but as it was around then, the human genome project. Today companies can read the human genome in about an hour for anywhere between 100 and 200 dollars. So we've gone from 13 years and five billion dollars to an hour and a hundred dollars in 20 years, which shows you the power of these exponentials. And so now we have next-generation sequencing machines that can read a bacteria or a virus or a fungus or a human being, or a dog or horse or a plant or whatever. Give us an accurate evaluation of what that thing is genetically.
Andrew:And the final piece of the jigsaw puzzle is because of CRISPR, we can make changes to that genetic code. And so there are 10,000 diseases, roughly 10,000 diseases that we suffer as a species that are as a result of one single defect in our genes. So if one gene's out of place, you have sickle cell anemia or beta thalassemia or any number of horrendous diseases that you might have. So if we can just switch that gene back and correct it, you've got a cure and, crucially, you're not going to be on medication for life and having to go back to a hospital and sit on a drip or have horrible side effects like happen from chemo or nasty surgeries. You're going to have a fairly in inverted commas simple, one-off treatment which is going to correct the genetic defect and be cured for life. And actually the first drug that has done that and it was for sickle cell anemia was approved last year, for sickle cell anemia was approved last year. So this, so that and and this you know things like if we understand the genetic elements of cancer that causes metastasis, which is basic kills, like roughly two-thirds two-thirds of people who get cancer are killed by them, the metastasis, not by the, not by the primary, the initial tumor. So if we can basically tell cancer to just switch off its ability to metastasize, potentially you've saved two-thirds of cancer fatalities, right? So there's all and it and it's just all these incredible things all happening parallel and all happening in an exponential rate and actually just before I forget, so it's very long.
Andrew:It's with the, the final bit, to go back to the communications technology point. So every time you read, you use a next generation sequencer to read the genetic code of something, right? Whether that's a plant, because you're trying to do something in agriculture, or it's a human being, because you're trying to do something with medicine or whatever it's. You know it's billions of, it's a lot of gigs of data just for that one code. So we've got exabytes of data, and that data is doubling every few months because every time anybody using a next generation sequencing machine anywhere in the world, like in japan or china or germany or america or whatever, they're creating all this data. And and the only way that data is of any use to us is if you can collect, if you can, if you can actually say something substantive about this data.
Andrew:So what then needs to be added, on top of just the ability to read the genetic code, is the ability to, if you like, crawl the Internet and databases and interrogate every single academic paper written in the last few years that says well, if the genetic code looks like this, that means that this person is going to have this disease or this plant will not be resistant to this pest or parasite, right? And so it's the, if you think the example I use, which sounds a bit dodgy, you know, a bit weird, but think about the Second World War. The best Scientists in the world in Germany working on rocket technology, or Japan working whatever they're working on, or America or Britain. You know there was a lot of innovation in the Second World War, but all these amazing scientists, on whatever they're working on, were working in complete secrecy and bunkers. Right Now we've moved on, you know, nearly a century now and it what's so exciting is that scientists in Europe and Japan and America and China and wherever else are absolutely collaborative and putting everything they're learning and they can go online using high-speed broadband and everything else and interrogate basically the whole of mankind's current scientific knowledge about that genome, which means they can then say, well, here's a potential drug treatment or here's whatever. And if you think about everything I've just said in the last few minutes, how recent all of this is and that's why we're literally we're on the launch pad now, with, you know, the next few decades is going to be really astonishing.
Andrew:And I guess one of the big points of my book is, in my experience, having looked at this personally for 10 years, very little of that has made it into the public zeitgeist like it's not. If you listen to the bbc news, none of this stuff ever gets talked about. I mean, all in my experience anyway, and you know it's, you know the. It's a bit like um.
Andrew:You know mark andreessen, the guy who he founded netscape, netscape um, and was you know he's one of the kind of leading lights of the west coast californian tech scene and he he's one of the founders of andreessen horowitz, which is one of the big vcs that's backed all these big tech, and he was talking about how, in the early 90s, the only press the internet was getting this is the internet was people like the New York Times basically writing every week about how the internet was a fad and there was no business case for the internet and the internet would never take off and it would never create any value.
Andrew:Like seriously, if you watch him talk about this, he gets very passionate about it because obviously he was one of the founding fathers of the internet and and my feeling is that biotechs at the biotech at the moment is a bit similar. It's a bit like really wacky and like, oh, surely we're not gonna be able to do that, we don't the technology do that, and in 20 years time we're gonna look back and go and just be blown away by just how much biotech has given to us, right? So I think I'll stop there. Otherwise I can just go on and on and on, but I'll, I'll pause for breath and let you uh, let you say something with apologies.
Dr James:No, that's awesome man, listen, thank you so much. Uh, you know, there's, there's. There are some things that were playing in my head. Whenever you were talking there, I saw some newspaper report. This is like I don't know, can't remember where exactly. I saw this on google or something or facebook or something along those lines, and and these were newspaper snippets from the 1900s, when electricity had just came out, and obviously electricity is.
Dr James:Yes, we're conscious of the fact that we don't exactly want to expose ourselves. You know some sort of huge amount of voltage or whatever certain precautions around it, but these people were just downright fearful of it and they thought that it was going to have some sort of negative impact on society at large as a whole. So it was getting bad press and part of it was like the fear factor sort of thing. And it's always the same with all these new technologies, these things are coming out. You know there'll be the fair share of naysayers and then the proponents will gradually grow with time. So maybe a parallel there in the biotech industry. And then the other thing I was going to say what was the other thing I was going to say? Oh, it's just slipped my mind. Oh, yeah, that was what it was.
Dr James:Humans are really bad at understanding compounding 100% there's just something in our psychology we don't get it we really don't.
Andrew:There's an example in the book where so AT&T hired McKinsey's, the management consultant, in the 80s to basically do a sort of an analysis of whether the mobile phone market was something they should look at and get involved with. And you know AT&T were the biggest domestic telephone company in America at the time. So they're like, obviously mobile phones within this nascent mobile phone technology was something they were taking pretty seriously. And McKinsey's came back and said they didn't think there'd be more than there was basically no use case. They were unlikely to be more than a million mobile phones in use by the year 2000 in they said that in light it was either the late 80s of the early 90s and of course by the year 2000 there were a hundred million mobile phone users and now there are seven. There have been seven billion smartphones sold, you know, not really that long afterwards.
Andrew:And that's exactly right. It's like you know the telephone to your point similar point to electricity over the undersea cables was the early communications technology. The phone was being developed so that cable wireless operators would be able to speak to each other because it would help them send telegrams. So they hadn't figured out that. Actually, if they'd figured out that technology, they wouldn't need to send telegrams anymore. It's a bit like in Blade Runner. When you know, blade Runner's like flying cars and 500 story skyscrapers and this post apocalyptic vision of the world which is, you know, fans of science fiction, and then Harrison Ford goes to a payphone and he gets on a plane. It's like Guys, you know, I mean, seriously, he's not gonna be using a payphone if you've got flying cars. But, but that you're right, human beings.
Andrew:And the other point I wanted to just make, whilst I remember, is a lot of the stuff that I think this industry's going to deliver is really really fundamentally very, very disruptive. You know like, for example, if we revolutionize agriculture, um, we could, we could potentially rewild you know, almost all of the amazon, um, because we wouldn't need all this cattle farming anymore because of all the technological changes in terms of cultured meat and everything else. We can perhaps come on to that. One of the use cases is to revolutionize aquaculture, so the fishing and seafood and everything else. People's pushback on that is oh my god. Well, they won't if you basically have 100% cultured. By the way, this stuff is genetically the same. So you're talking about having bluefin tuna or sea bass or lobster or whatever else, which is all basically grown in a lab, but it's genetically engineered, so it's exactly the same as the animal. But you don't have to go and slaughter the animal, which of course is very bullish for the state of our oceans. Don't have to go and slaughter the animal, which of course is very bullish for the state of our oceans, because if we can really do this, if the technology allows us to do this, then in 15 or 20 years time you will, we can leave the oceans alone and they can revert to how they were 200 years ago. Right, and the only fishing will be sports fishing or, you know, like leisure fishing, rather than massive industrial fishing. That's completely destroying oceans and, you know, killing whales and dolphins and everything else.
Andrew:Um and the counter that people push back on that and go well, yeah, but that means that all over the world there won't be any fishermen anymore and it's like, yeah, well, in 1800 95 plus percent of the world's population were subsistence farmers and today only half a percent of the population of farmers. And similarly, in 1900, the horse industry. You know like everybody learned how to ride a horse. Everybody had a horse if they had enough money. All um, travel was basically on horses.
Andrew:And if you'd said to people, then, by the way, the number of horses in the world in the next century will decrease by 99 percent and the only horses left will be, like you know, horse races and very wealthy people having a couple of horses in their ranch and wherever not, people having a couple of horses in their ranch and whatever, not a ubiquitous use of horses by absolutely everyone as their main end travel technology. Everyone would have looked at you like you're completely mad. And yet within half a century the horse had basically been largely replaced across the piece by this thing called the automobile and trucks and lorries and stuff. So I think to your point about humans are really bad at compounding. We're really really bad at crediting just how revolutionary these technologies can be in one or two lifetimes. And I think you know can I, can I wave my book like very promoting, but in this book there it is in this book.
Andrew:I um, you know I unpack a lot of this and why I think biotech is gonna be so because it the prize here is literally, you know, better, safer, healthier, wealthier and significantly longer lives for for, you know, hopefully, billions of us, and that's what the, I think the industry is going to deliver genuinely, and it's just a shame that relatively few people are kind of looking at it right now or thinking about it, including the press.
Dr James:Vinibar. Well, listen, thank you for that, and you know it's interesting, right because people talk. I'm sure you've come across this concept before technological singularity.
Andrew:Yeah, yeah, yeah, Ray Kurzweil.
Dr James:And it's the thesis. It's the thesis, it's the thesis that compounded what is, what is technology? There's a problem and someone creates a solution, right, and it just becomes that is fundamentally what it is at a higher and higher level, and it stacks and then there's new problems, and then there's new solutions, and blah, blah, blah. That's what machines do, that's what anything does, that's like anything creates value, it's literally solves a problem at its core, the most core essence, right, um, but anyway. So the technological singularity is when human competence and are the and or computers as well, because let's remember well, if they keep going, what's that rule, what's that thing?
Dr James:again, that um law is law get the words right out of my mouth, right? If moore's law continues as it is, computers are supposed to be as smart as humans. Not in 10 years, not in 15 years. In five years, guys, all right, they have the same number of transistors per unit of area, effectively, as a human brain, anyway. But yeah, interesting one to reflect on. But what I'm saying is that there's the theoretical point that where intelligence reaches such a degree that whenever a new problem is identified, instead of doing all this research and crap and going away and thinking about things, well, because they have every single information, every single piece of information at hand, ready to go to solve that particular problem, they can create a problem instantly. And that's where things get really wacky, because can you imagine?
Andrew:yeah, and, but Moore's law like it. Moore's law is the fact that processing power per pound or dollar spent doubles every 18 to 24 months. Right, and it's been. It's actually. It was invented in the mid 60s by Gordon Moore and it's been going back since the steam age, which is really like as in other. Academics found that the rate at which human processing power has been doubling goes all the way back five decades before Moore's law was come up with. But to exactly that point.
Andrew:If computing intelligence becomes level with us in, I don't know, let's say, 2030, who knows when it is? There are various different estimates on when it's going to be right, but if and then it doubles every 18 to 24 monthsers will be twice as intelligent as us two years later. And what is it? Four times as intelligent as us, and then eight times as intelligent, and then 60, exactly, and so like. Within a decade, computers will be, like hundreds of times more intelligent than Einstein, and that is front and center of the singularity. By the way, just as a quick aside, you probably know this and I'm sure lots of the audience knows this, but Moore's Law has rested on the ability of scientists to put more and more zeros and ones onto a tiny, tiny space right down to the kind of nanoparticle level. Reason that our computer chips have got more and more powerful consistently for the last 60, 70 years is basically because of miniaturization, and we're now bumping up against the limits of physics, like you basically can't put any more billions of transistors, of zeros and ones of little gates on a wafer. That Taiwan Semiconductors manufacturing and that Dutch company ASML is doing its laser lithography etching that make, you know, makes these chips. And the only way that we can continue Moore's law is actually by some kind of big sidestep, like a methodological change to how we grow processing power and and this again is in the book and one of the ways that we the most like or quantum computing is one idea, which is, you know, some revolutionary stuff going on with that, but another parallel technology is biological computing.
Andrew:So what? Which is super exciting, but for two reasons. So the first thing is, if you use DNA based computers like binary computers, all the computers historically use zeros and ones like binary, right, it's either a zero or one, and then you've string billions and billions of those together and you have data and you have processing power and you have communications technology. You have us being able to talk to each other as a function of that. But DNA-based computers have four bases instead of two, so they can theoretically be exponentially more powerful.
Andrew:But what's even more exciting is imagine you can grow storage medium in culture, like you know, literally in a Petri dish, right, and you then have something the size of a sugar cube, just by virtue of the fact that you set the cellular structure of this thing, and then that means that you can come back and read it whenever you want later. But, crucially, you wouldn't need any power. So you could basically grow these things like we grow cheese or yogurt, without wanting to sound too mad, and then you'd have a storage medium that could last for a thousand years, be completely pinpoint, accurate for, you know, exabytes of data and not require any power. So imagine how because at the moment, like a very, very significant amount of the world's power is consumed by servers in data centers, obviously, so that we can be doing this right now, and so that people can mine crypto as well, obviously which is something I know you're, it's close to your heart, um, but and and you know people worry about this it's like how many, how many megawatts of electricity. Are we hoovering up, um, just supporting the, the it and computing infrastructure of this planet?
Andrew:Well, imagine if we had a storage technology, a computing storage technology that didn't even need power because it was near as damn a living thing and it was. It was all just based on changing the cellular structure of a, of a, of a, something that we'd grown in culture. But you know, these technologies are. I don't know they're 10 or 15 or 20 years away, but they're, they're conceptually within our grasp already, and that's you know. Just imagine how world-changing that would be. We no longer need power for most of our data storage requirements globally. How positive that would be for the environment and for everything else. So it's bloody exciting stuff all of it. I think it is anyway.
Dr James:Hell, yeah, a lot of exciting developments and, yeah, a lot of value to be added in terms of society and in terms of helping the human race, and naturally, that's where money and attention is going to be flowing. Okay, cool, interesting. Thank you. So those are a lot of the tailwinds that's responsible for, well, the reason why people are getting excited about the biotech space. How can one get exposure? And, of course, you and I both know that we definitely don't want to overstep any rules and regulations whenever it comes to financial advice in this podcast.
Andrew:Maybe if we could talk high level, yeah, exactly well, and that's exactly what I do, because actually I talk at the highest of high levels with respect to this, in that you know and we've talked about it in the past that my basic position is, you know, on investment is people want to own the world. That's why my first was called how to own the world, and the biggest investment theme in history is human progress. You know, ultimately, in the long run, forget short-term noise, forget short-term volatility, if you own a big stock market index and that could be the S&P 500 or the MSCI world or the FTSE all world or whatever you want to own. But if you, if you make sure you have exposure to hundreds of companies or even thousands of companies by owning a big equity index over time and over a lifetime of investing from, say, your 20s to your 60s or your 30s to your 50s or however you want to play it, you will capture human progress in financial performance. And it's human progress, front and center, which is the reason the S&P 500 is averaged more than 10% per annum all the way back for a century, right? It's aviation, automotive, shipping, building, and then you know silicon and everything else, every single wave of technological advancement. So actually the easiest way with. I mean, this sounds like a bit of a cop-out and a bit of a fence it, but actually it's not.
Andrew:It's my belief in how the easiest way you can capture this is the reason that equities have done 8%, 9%, 10%, depending on which ones you've bought for the last century is not just because of the value created by the tech companies themselves. So, like, if, obviously, if you've owned google, nvidia, apple, you know meta, whatever, um microsoft, you've had a direct um benefit from tech as an investor. Right. But actually the reason that the whole stock market's gone up 10 ish percent a year is because tech has affected every single other sector. So it's affected retail and it's affected mining and it's affected health care and so so healthcare. So it's the fruits of tech that have driven aggregate performance of stock market assets.
Andrew:And my point is that biotech is about to do exactly the same, because biotech is going to revolutionize the agricultural industry, it's going to revolutionize packaging, it's going to revolutionize power generation and obviously it's going to revolutionize healthcare. So all that aggregate value, the easiest way to own it is just the same as it was to own tech is just to make sure you have exposure to a big global equity index and whether you prefer a global one, like the MSCI World, or an American one, because you think of American exceptionism, then it's the S&P 500. But that is so. If there's just one way, the sick, you know Occam's razor. What's the simplest answer is is but what biotech is going to do is it's going to sustain that sort of return profile of the last century into the next century by being the new transformative, you know, disruptive technology that creates trillions and trillions of dollars of real value, as the tech industry has done in the last century.
Andrew:So you just need to own that if you want to go, if you want to drill down more into a specific exposure to biotech to your point. You do have to be very careful about that, because the difference between the bias that say, you know, developing a drug if you take a therapeutic biotech company takes 10 year, 10 years and 3 billion dollars on average, and in a drug if you take a therapeutic biotech company takes 10 years and $3 billion on average. And in the whole time, if you're a small innovative company along that trajectory, you're not earning any money because until it's actually on market and being prescribed to patients, you're not earning any money, right. So that's very different to pretty much any other business that you might set up which can start earning money next week. You know whether that's a restaurant or a cinema or a sports stadium or whatever. And so biotech is, because of that, uniquely risky, um, and you know it's also fairly specialist, so I wouldn't.
Andrew:The only people that I think should have a direct exposure to biotech are people who are quite a lot wealthier, perhaps quite a lot older, quite a lot sophisticated, and are willing to kind of go down the rabbit hole on investing in a biotech fund with some of their money not with all of their money, obviously, but for people who are willing to do that.
Andrew:You know, the NASDAQ Biotech Index in America, which is the biggest American index, has done just shy of 15% per annum on average for 15 years in sterling terms. Now, along the way it's been very, very volatile. It's like you can have minus 40, minus 50% years and then you have plus 70% years. So you have to be really confident about what you're doing and ride that volatility. But look, as I say, I think for most people the easiest thing to do is just what has been the same for the last century is just make sure you have exposure to global equities, because this industry is going to revolutionize most of the components of global equities and contribute enough value to benefit you, to give you a life-changing result as an investor.
Dr James:So yeah, so yeah, pretty much, by having any exposure to the market, you're going to have some exposure to the space, because it's so fundamental to a lot of components of most businesses out there.
Andrew:Well, I mean, look, if you look at the direct already, look at the market caps of Pfizer, eli Lilly, novo Nordisk, glaxo, novartis, astrazeneca, right, you know a large component of the value of all of those companies is biotech value. It's just that you know the old school pharmaceutical companies are still selling paracetamol or whatever else, but you know most of their most cutting-edge drugs that are like 10 billion dollar plus revenue drugs are biotech drugs. So you're getting, you're getting that and they're all already in the index and making a big contribution to the index. So you've already had an element. It's not, as you know, three and a half trillion Apple. What's Microsoft now? Two and a bit trillion. You know the top seven, the NVIDIA's at three trillion. So the aggregate impacts of biotech on stock market indices isn't quite as big as tech here, but it's heading in that direction.
Andrew:And you know, I think it's a bit like I was saying this the other day if you'd said to somebody in 2005 that Nokia would fall by 90% and basically sort of evaporate and be a slightly random, small Finnish company rather than the biggest, best mobile phone company in the world that it was at the time, and that Apple would dominate the mobile phone market and be in a $3.5 trillion company. If you'd said that to like really smart analysts in New York, chicago, london, wherever they would have laughed at you and said come on, you know, nobody was predicting that would happen. And the point I want to make there is that you know, I think, that there will be two or three trillion dollar plus, or five or six trillion dollar plus businesses that are basically biotech technologies in global indices, wherever that might come from. You know, on a sort of 10-year view that we've probably never heard of, you know, and there aren't household names right now. But equally, you know, google and Apple are doing. They're putting billions, tens of billions of dollars into a lot of the things we've talked about. So they're, you know, they're going to have a role to play as well, um, in what you know where biotech and tech converge.
Andrew:Um, there was another point I wanted to. Oh yeah, and the only other thing I wanted to say is, which is a thesis in the book, is about, you know, these new trillion plus dollar companies is I really, really hope and pray that one of them is going to be a British company, or maybe two or three of them, because one of the other themes in the book is, which is kind of why I was sufficiently angry to spend three years getting up at five in the morning and writing this book, which is, you know, not a very. It's a pretty tough thing to do and I feel like an idiot the amount of time and effort I've put into it. But one of the things that drove me on is just being so annoyed by just how good British science is and what an advantage we have with the NHS, for example, because that gives us a huge data set. You know from hundreds of thousands of patients that very few other countries have and we've we've taken advantage of that a bit in the past, but we could have taken advantage of it much more. But there are a bunch of reasons to do with how our investment management industry functions and some really bad government decisions in the last 30 years.
Andrew:British companies, like all, like all of our good science, all of our best scientists, all of the value is being created outside of Britain. So you get British science, british products, and we are good at taking a company from noughts and you know maybe 50 million value, but we're really, really bad at taking a company from 50 million to 10 or 50 or 100 billion for all sorts of reasons that I'm fairly familiar with and that annoy me a lot. If Britain can sort that out and solve some of these intractable challenges by rights. You know, astrazeneca is a 200 billion pound company. Glaxo is, off the top of my head, 120 billion pound, maybe a bit less than that actually, since it de-merged its consumer business Halyon. But you know they're quite big companies.
Andrew:Is my point, britain by rights, given the quality of our science, should have one or two very, very big companies in this space.
Andrew:And I really hope that because there's a really great Welsh biotech entrepreneur called Sir Chris Evans. He's a real character and has created quite a lot of value in the biotech space in his career and he the way he puts. He says Britain only needs one Genentech. So Genentech was a massive, like Californian, one of the first biotech companies that was acquired by the Swiss company Roche, I know, 15 years ago, whenever that was. But the point being is a Genentech almost single-handedly created like lay the groundwork for the industry in California and hired, you know, thousands of highly paid scientists and whatever else. And if Britain had our own Genentech, the, the you know that we'd have thousands and thousands of really highly paid scientists, we'd have, you know, new buildings, we'd had billions of pounds more of revenue being paid to the Exchequer and everything else. So I think it's really, really important we sort this out, which is part of part of my mission I'm intrigued by what those barriers are to britain achieving that.
Dr James:And you know what? How much time have we got today? Oh, just run a little short on time, but it's covered in your book, right yeah, yeah, it is.
Andrew:It's not covered. You know what? Because? So I originally wrote 160 000 words of content for this book, right, and about 50 000 plus of that was very focused on the state of like this point about why britain's struggling. And then obviously I sort of I knew in the back of my mind I wanted to get all of this out of me and write it, but I knew in the back of my mind that if my publisher and I were aspiring for this to be a global book because the book's published in all english-speaking markets, in china and south korea and everything else, right, as of all the english-speaking markets later this week, so you can buy it in canada and australia and america and everything else, which is super exciting, because my first book is a very british book and of which the same cannot be said that's why I wanted to make it.
Dr James:You know, sorry to barge in. That's actually why I recommend first book to everybody, because I'm like it's British centric and it's investing anyway.
Andrew:Sorry to jump in no, exactly, but the opportunity here for me was that this message can be completely international like oh yeah, and we want that for the biotech.
Andrew:Yeah, yeah, yeah, right, and so so what I did is I actually um, took out you know like the equivalent of what, so it sounds really pretentious. But if a phd 60 000 words, then I took out a phd's worth of content from this book, which is slightly, slightly annoying, but um, that's all about what. All the deep, um, sort of a deep dive on why brit Britain has been so bad at commercializing science and creating multi-billion pound companies. But I will be sharing that, like in the months and years ahead To our audience on our YouTube channel stuff, because I is really important and it's a personal crusade of mine and if we're gonna sort Britain out and get it back to growth and you know, I mean you know American GDP per capita and Singaporean GDP per capita are now nearly twice what ours is we have, we have done a terrible job for 30 plus years in this country for all sorts of reasons.
Andrew:I've experienced that very keenly by virtue of being a British person working in London trying to service the biotech industry, because that's probably about the most extreme cold wind you're going to face when Britain can't do stock market stuff anymore properly because it hits earlier stage risk in companies disproportionately hard, and so I sort of feel like.
Andrew:I have quite a lot to talk about with respect to that and if we do, and crucially like, the positive outcome of which is that Britain will get much better and much wealthier and be a much better country, I genuinely that's another reason I was willing to do all the work to write this book, because I think the more people understand this stuff and are agitating for it and involved with it, the better chance we have of creating a much better, wealthier, happier, fairer country than the one we have at the moment. Without wanting to get by the way, that's not party political. The problems happened under Labour and the Tories and terrible decision-making by both parties, and I think the solution to it is not party political either. The solution to it is people like us, you know, creating wealth and making these changes. Anyway, I'll get off my soapbox now, not least given that we're coming to the end of the call no.
Dr James:No, it's good Listen, all food for thought and all interesting. And yeah, those barriers that you talked about just then actually intrigued me. And it does kind of stack up because, you know, in America you've got these guerrilla companies I think that's the terminology where they're just, they're just why we're like, if you what's the worst? That start on the S&P, where it's like I don't know it's, you'll be able to, you might know more on this. To me it's something along the lines of seven companies are responsible for half its growth, or something crazy.
Andrew:So seven companies are a third of the value Now of the whole market index. So you know, the other 493 are, you know, two-thirds and seven or a third, but they're more hair raising. One of the things like you know, apple's market cap is like it's. It's a lot bigger than the whole London stock market just Apple and off and it may even be.
Andrew:It's something like because I don't know what it is, I haven't looked at it for a while, but you know, maybe Paris is a trillion, germany's a trillion, london's a trillion. So like, put it this way, the seven biggest tech stocks are valued at more of all European companies, like by miles. That's crazy isn't it.
Andrew:And I think more than Japanese and Chinese companies as well, I think. But you know which, by the way, is another I do argue in my second book about. You know you need to be a bit careful about American exceptionism because the big you've already got companies like Taiwan Semiconductor, which is a multi-hundred billion dollar company, nova Nordisk we already talked about in Denmark, reliant Industries in india. My point being is that the, like the biggest companies of the next century might not all come from america anymore for all sorts of reasons, and that's kind of why maybe you want to own the msci world instead of the s&p 500, but, um, you know, they're, that's a, that's a, that's a for another another time, because that's a big topic.
Andrew:You know the fact that an awful lot of what's driven America's success, like the success of the big companies in America, is just the introduction of ETFs to the market and the fact that billions of people, millions of people all over the world, investing hundreds of billions of dollars, have found it easy to just buy an S&P 500 ETF without thinking about things, and that has plowed structurally billions and billions and billions of dollars unthinkingly just into the US stock market, and that you know. You know, uh, the the movie the big short, yeah, I do. Who's the guy who played Batman, christian Bale. So Christian Bale plays Michael Burry in that movie, the Big Short, and so he's a really famous hedge fund man who made, you know, thousands of percent shorting subprime debt, in which was the story of the Big Short.
Andrew:He has been very publicly talking for quite a long time now about the fact that the S&P and ETFs all that ETF money is a bubble and you know it could well unwind and you need to be careful of it. And he obviously he got the subprime crisis right, so he could be right. But I just think you don't have to worry about stuff like that if you're investing every month and you're investing for 10, 20, 30 year time period, because it might correct again like it did in 1999, 2000 and 07, 08. But if you're investing in every month for a lifetime, that's the simplest way of just benefiting from human progress and not having to worry about all of this stuff, because you just have to be so smart to sell now and buy back.
Dr James:You know whenever that's interesting what you said, because investing the s&p 500 it's almost like a meme nowadays and I feel like people just yeah, correct jump in. That's so interesting. I never thought about it like that. Anyway, I'm sure we could do another podcast and all of this stuff. I'm sure there's plenty more to talk about, but sadly, sadly, sadly, time is catching up with us a little bit today, so I'd like to keep these about 40, 50 minute mark.
Andrew:Andrew, if anybody wants to pick up your book, what we're going to do is we're going to throw a link below this podcast so people can grab that. That, should you so wish anywhere else, the best off on it. Um, so I mean, yeah, as always with us. It's plainenglishfinancecom is our website. Um, the book's available on amazon. So it's just, our future is biotech on amazon.
Andrew:It's if, yeah, if you want to, if you can endure like nine and three quarter hours of listening to me, um, you can get it as an audio book, and I preemptively apologize to anybody who goes that way. Um, but obviously some people like audio books. It's an e-book, it's an audiobook and it's a hardback at the moment. It will be a hardback for a year or more now before they publish a paperback at some point in the future. And, yeah, just Amazon. It should be in Waterstones and all these sorts of places in the fullness of time, but I guess, if people are anything like me, I tend to buy everything from Amazon nowadays. So, yeah, that's the easiest place.
Andrew:And the only other thing I'd say is all these sorts of topics. We have a YouTube channel and so, if you'll forgive the, you know we've put a lot of focus on that and giving what we hope is really good free information to people about investment and about all these sorts of themes. Historically, we've just done our 21st video last week, and so that's plain English finance on YouTube, and if people like YouTube as a medium or video, then please check that out. But yeah, thank you very much, buddy, really kind of you to have me on, as always, and definitely happy to do another one on whether you know the S&P 500 is in a bubble and all that good stuff.
Dr James:Oh, that could be fun actually, because that's the number I always see people asking me and there's always that logic that always pops up hey, let's just stick it all in the S&P 500. And it's not entirely without merit, is that logic? But there's a few big holes. You can poke in it if you ask me, and it sounds like we're on the same page in that one. So that's a follow-up podcast. We should definitely do it some stage, but in the meantime, Andrew, thank you so much for your time today coming on the podcast and also best of luck with everything with the new book, some exciting stuff on the horizon and be good to touch base again very soon.
Andrew:Fantastic many thanks, James, all the best.
