Business & Money

20 years ago, in 1998, the largest 5 companies in the world by market cap were:

1 Microsoft ($271B)
2 GE ($258B)
3 Exxon Mobil ($172B)
4 Royal Dutch Shell ($164B)
5 Merck ($154B)

So that’s one tech company, one conglomerate, 2 energy, and one healthcare.

At the beginning of 2018, that picture looked very different:

1 Apple ($851B)
2 Alphabet/Google ($717B)
3 Microsoft ($702B)
4 Amazon ($700B)
5 Tencent ($507B)

All tech (no surprise). I hold 4 of the 5 (sorry MSFT), and will likely do so for the foreseeable future.
But we all know the saying. You have to skate to where the puck is going, not where it is now. So I’m thinking about what that might look like 20 years from now.

While I believe tech will persist (that is, every company and industry will be heavily influenced by software and the internet), I don’t think the 2038 top 5 will be pure play internet & technology firms.

I’d say there’s a non-zero chance that biotechnology might take the crown. The things I see at the intersection of computation and biology are astounding.

So, I’ve begun creating my own ETF weighted by market cap. It’s basically centered around two things: CRISPR (clustered regularly interspaced short palindromic repeats) and genetic sequencing.
CRISPR sounds a lot like an industrial additive to potato chips, but in reality, might be the most revolutionary discovery of our life times (take that blockchain!). It basically allows us to edit DNA and reprogram the genetic makeup of living things.

DNA sequencing is the process of determining the precise order of nucleotides within a DNA molecule. So if you’re going to edit the DNA, you need to know precisely what and where to snip. 
I’ll likely add to my ETF in the future, but right now it consists of:

Illumina (ILMN) – basically the only game in town for genetic sequencing

Intellia Therapeutics (NTLA) – Dr. Jennifer Doudna and Emmanuelle Charpentier discovered the CRISPR-Cas9 genome editing technique. Though the discovery was made in an academic setting, Doudna decided to try her hand in the private sector and co-found Intellia.

Editas Medicine (EDIT) – Feng Zhang of the Broad Institute discovered how to use CRISPR-Cas9 technology in eukaryotic cells (and thus, humans). And for some reason, despite filing patents seven months after Doudna and Charpentier, The Broad Institute was awarded a patent first.

Crispr Therapeutics (CRSP) – and who do we have to thank for my last pick? Doudna’s co-discoverer Emmanuelle Charpentier of course. She couldn’t sit idly by and let Doudna get all the glory, so she decided to license her IP to Crispr Therapeutics.

I have no idea who will win the CRISPR race, so I’ll bet a few horses (it’s Derby weekend after all). 🐎 🐎

Human progress

When the human genome was first mapped in the year 2000 it was a big deal. Bill Clinton went on national television to make the announcement as the dawn of a new day for disease prevention. But then nothing happened.

For one, data was limited. It was incredibly expensive to sequence a human genome so there wasn’t much information to work with. That’s no longer the case.

More importantly though, even with the discovery of CRISPR in 2012, the problem was completely solved. As it turns out, editing one specific gene in one specific location is not all that helpful. Most diseases that we care about, like Alzheimers, heart disease, and diabetes, are polygenetic. In other words, they involve tons of different genetic markers all across the genome.

With tons of data and cheap sequencing, we’re now just now starting to make robust discoveries. So we’re still in the first inning of this revolution.

Philosophy

Of course, there are tons of ethical and philosophical questions to address.

If you remember eugenics (the science of improving human fitness through selective reproduction to achieve desired characteristics), it basically lead to Nazism and the extermination of millions of people deemed genetically inferior.

The important distinction to make here is between two different types of gene editing.

Somatic cell editing means making changes to DNA in cells of a particular organism that is fully formed (one person). These changes are not heritable; they cannot be passed on to the next generation.

The contrast to that is changes to the germline, or changes to the DNA of embryos, eggs, or sperm. That is, changes that are inherited by offspring and thus become permanent fixtures in the genome going forward, future mutations notwithstanding.

There’s a profound difference between making a change that affects one person, and making a change that affects all of their children, and their children’s children. The latter has an impact on the arch of human evolution.

If you are worried about the philosophical machinery and motivation behind today’s tech luminaries, what happens if the next wave of companies at the top literally controls our genetic makeup.

Filter bubbles will be the least of our concerns.

My Latest Discovery

If you’re at all into biotech and healthcare more broadly, check out the Industry Focus podcast from the folks at Motley Fool. It covers a different sector of the stock market every day, Wednesday being healthcare.