Introducing our 7th Lead Advisor!
The secret is (almost) out! Join 7investing's founder and CEO Simon Erickson on Wednesday, January 19th at 11 ET as he announces this extremely exciting addition to our team...
We’re really excited to introduce the seventh member of the 7investing lead advisor team. Once we make the big reveal, we’ll be talking about three key trends in healthcare. We’re heading toward some major disruptions in a space that impacts all Americans. We’ll look at what this might mean for investors and how the market may change.
April 11, 2021
We’re really excited to introduce the seventh member of the 7investing lead advisor team. Once we make the big reveal we’ll be talking about three key trends in healthcare. We’re heading toward some major disruptions in a space that impacts all Americans. We’ll look at what this might mean for investors and how the market may change.
Samantha Bailey 0:15
Welcome to 7investing now, a show that teaches you how to take a long term view on investing by better understanding what’s happening in the market now.
Dan Kline 0:25
Good afternoon 7investors and welcome to a special edition of 7investing Now. My name of course, is Daniel Brooks Klein. I’m the host of the program. I am being joined by our CEO and founder Simon Erickson. Simon, I’m looking a little redder than normal. I promise you, I was wearing sunblock spent a Saturday at the beach, which is the first time in a year I’ve gone to the beach, largely because we’re all vaccinated. And even though the beaches outside I live in Florida, and people are not always super smart, like so went to the beach. It was a little stormy. We had a bad storm on Sunday. So you couldn’t really go in the water. I went into Oh to about my knees. And then when we got home from the beach, I went to the pool. So my weekend was delightful. How about yours,
Simon Erickson 1:07
Lots of water. That’s fantastic. Dan, we did gardening here in Houston. This is like the couple of weeks of nice weather we get before it starts getting incredibly hot. So we had to spend some time outside here in the Houston area.
Dan Kline 1:19
Simon I have a black thumb. So if I ever come to visit, don’t let me near your garden plants, we’ll just we’ll do like an a commercial for like Ziploc bags. With that this is a very special episodes very rare that I hand over the reins of the show. It’s happened a few times to interview me, but it’s generally happened because we have a new advisor. And that’s what we are announcing today. We’d love your questions. We’d love your comments. We’re going to talk about health care after that. But Simon Erickson, why don’t you take over the show and introduce our newest advisor here at seven investing.
Simon Erickson 1:51
Well thanks very much, Dan. And to kind of set the scene for this. You know, we’ve accomplished a lot of things in this past year that we’ve been open to Seven Investing. And I’m very proud of a lot of them. But I think that the thing I’m actually the most proud about is the team that we put together here, right just to have the brain power all together into the same company makes it so much fun every month to see the companies that we recommend in our recommendation reports. And then on top of that, just to see the ambition of this team is incredible. I mean to see everybody that’s on the same page pushing each other farther, farther along to accomplish our mission of empowering others to invest in the stock markets greatest opportunities is something we live every day. It’s something that I’m extremely proud of. And even Sam Bailey, who’s on the call with us here behind the scenes right now, told me one day she said a couple of days ago, she said Simon, the team that you have put together here with Seven Investing is truly incredible. I said like Sam, that is probably the best compliment I could ever ask for. And so with all of that as a foundation, I’m extremely excited today to announce that we are expanding our 7investing team even farther and hiring and bringing in our seventh lead advisor. And our seventh advisor is Dana Abramovitz. And Dana, I would like to start first and foremost by saying welcome to Seven Investing.
Dana Abramovitz 3:05
Thanks so much.
Simon Erickson 3:07
Dana, we’re talking a little bit about your style of investing the types of companies, you tend to look for your passion for healthcare, and your background. But let’s kind of get started on a fun note of how you and I had met six or seven years ago, I want to say it was three South by Southwest. Which for those for those who have been to the South by Southwest Conference it’s incredible. It’s probably one of the best conferences of the year. And the best part of the conference track was the health care track. And I found out you were doing all of the programming and inviting all of the companies and the speakers and the panelists to speak at that. It was an incredible experience for me learning about everything in healthcare. I’m even more excited to be learning about healthcare now working alongside you here at Seven Investing.
Dana Abramovitz 3:48
Thanks. Yeah, no, it’s, um, it was a wonderful job to work at South by Southwest. I felt like my, my role was to really listen to what people were saying about healthcare, who was innovating, and then figuring out who those thought leaders were, and then give them a platform from which to speak. So yeah, that was that was really fun. And yeah, it was always fun, you know, our annual chat, you know, over generalize the trade show or talking about some company. So that was always fun.
Simon Erickson 4:22
Yeah, lots of coffee and breakfast tacos. As I remember the Austin area. It’s been a lot of fun. Danny, well, I’ll probably say innovative about 20 times here, but just kind of to give people a feel for your background. You have an incredible resume. By the way you have a bachelor’s in pharmaceutical service sciences from Purdue. You have a PhD in biochemistry from Columbia. You have a master’s degree in management from Stanford and also a postdoc research fellowship at the Scripps Research Institute. That’s a very impressive resume. A lot of it looks like it’s pretty healthcare heavy. What can you tell me about what you’ve really been proud of accomplishing in your professional career? And what else do you also want to accomplish?
Dana Abramovitz 5:01
Yeah. So, um, it was certainly the work that I did in South by Southwest was some of the work that I was most proud of, you know, again, that allowed me to take all of the work that I had done throughout my entire career. So starting in pharmacy, you’re really starting to understand things at the molecular level during my postdoc, um, you know, I worked at a startup company, I went to business school, transition to healthcare, and then, you know, at South by Southwest, and now at Seven Investing, kind of bringing all of that together. And, you know, I think he’ll each thing that I do, right, I’m learning more, and I’m incorporating that into what I can provide. So, you know, just, you know, from the very basics, to anatomy and the molecular level of how things work biologically, and then healthcare, to understanding healthcare systems. You know, so it’s the whole whole gamut. And that was, you know, one of the nice things about, you know, both my career and how I was able to plug into South by Southwest and have that broad view. And then now, combining, you know, all that innovation, all that, that work, you’re seeing all different companies, with my business school experience and training to really understand, you know, the, the fundamentals of different companies, so that we can just kind of help our, you know, the investors really understand to what they’re, what they’re looking at, and why you choose one company over another.
Simon Erickson 6:40
Yeah. And Dana I would say, You’re always several steps ahead of the curve. Right, let’s something that I really always enjoyed was, you know, you see kind of the headlines you see kind of the media picking up on, on what’s trending or what’s you know, in the news right now, but I think that you really understand the fundamental science of what’s going on. And so when you were inviting speakers for South by Southwest, or doing a PhD, or a postdoc fellowship, or anything, it’s really understanding of the science itself. And when we say innovative, it’s like, what is the impact this is going to have, not just for investors in the financial side of it, but healthcare and the medical community as a whole, I think you’ve done a fantastic job with it, I certainly learned a lot from you over the years, our audience is mostly individual investors for Seven Investing. And I know that you’ve worked with so many startups for several years, you’ve been a consultant, you’ve worked on the academic side of it, what kind of companies do you tend to look for? Is there certain types of maybe smaller earlier stage healthcare companies or larger drug makers are a little bit of everything on the buffet? What are you looking for? at Seven Investing here?
Dana Abramovitz 7:39
Well, you know, I mean, health care, so broad, right. You know, I mean, like, you can, you know, like, you know, like small biotech companies, you know, big pharma, but then also, you know, companies that are addressing, you know, health care, hospital systems, you know, medical devices, I mean, it runs the full gamut. And, you know, that’s, that’s kind of one of the nice things about South by Southwest, that I got to really broaden my focus. And so, you know, I can look across all of healthcare, and kind of look at that, you know, my, you know, the, the main thing that when I’m looking at companies, you know, is is, you know, all across healthcare, but making sure that, you know, the company’s innovative, that it is kind of following align with, you know, where healthcare administration and policy is going so that it seems set up for that long term growth, as to new new administration’s come in and, and change policies, you know, we have to make sure that, you know, all the companies that are, you know, working in the healthcare space, you know, a lot of times their revenue is based on reimbursement models, and so just really understanding that, so, yeah, so I’m hoping to provide, you know, something across the entire healthcare spectrum. But, you know, certainly my background is, you know, in the molecules. So, I will, you know, dive deep into the science, especially in the biotech and the the pharma companies to really understand and help our investors, you know, figure that out, because a lot of times, you know, the science is really complicated. Just because most people don’t study science, right, and I have that advantage where I’ve spent my entire decades long career studying the science and then flavoring in the the finance component, so that I can really provide that broader view.
Simon Erickson 9:50
Well, I’m extremely excited to be working with you here at Seven Investing Dana, you know, for everyone who wants to follow Dana. She’s @DanaAbramovitz7 on Twitter. We also have You can always send an email to us at info at Seven Investing.com welcoming her to the team. I really do mean this when I say that I think that out of everyone that I know I think Dana knows more than anyone. When it comes to what’s going on in healthcare. There’s an industry that’s $4 trillion in the United States, huge opportunity for large and small companies alike. I’m excited to go out and find the opportunities for investors out there, Dana, once again, welcome to Seven Investing.
Dana Abramovitz 10:23
Thanks so much.
Simon Erickson 10:25
And Dan, I’ll hand it back to you. On that note to take us to the rest of the program.
Dan Kline 10:28
We’re gonna talk three key trends in healthcare. We are so excited to have Dana here. The whole team, we didn’t know her. This is a little different than some of the other picks where at least some of the team knew her. But we were all really excited to meet her and we’re excited to start seeing the stocks she picks and Simon our new picks come out on May 1. I know I’m really excited about my pick, I think people are gonna be a little bit surprised about my pick. But if someone wants access to the Seven Investing picks, because we don’t just do the free show in the podcast, we sell our seven highest conviction picks each month. Every advisor makes a pick, writes an in depth recommendation, we tape a video call probably. I don’t know what’s gonna be like four hours. We’re
Simon Erickson 11:12
all 17 hours probably did this month. Yeah,
Dan Kline 11:15
where we all create a slideshow and present our pic and everyone can push back. So you’re gonna get to watch Dana asked Maxx questions because none of us are really all that good at doing that. You’re gonna be able to watch Maxx ask Dana questions, but Simon if someone wants to join. Now one option is that they drive to your house and set and hand you $49 every month, that’s very inefficient, generally, how would they do it?
Simon Erickson 11:38
Seveninvesting.com slash subscribe is how you can sign up with them. It was a subscription for seven investing. Again, like he said, Dan $49 a month or $399 a year. I really think it’s the best deal on the internet out there. Right now. We’ve got lots of letters on after our names, PhDs and MBAs and masters on this team going out there and finding the best stock market opportunities. Dana’s found her first opportunity, we’re not going to reveal it on this show. But it was a company I was unaware of before and I’m actually really excited about it. We’re going to reveal her pick and everyone else’s pick on May 1.
Dan Kline 12:09
Simon, aside from being near my wife who has a PhD, the closest I’ve come to a PhD is renting a Rug Doctor like I I am well set up for work was not well set up for school. That was definitely I I know a lot of my teachers find it hysterical that I spend my day doing homework essentially now, because there was none of that being done when I was actually in school. But we’re going to talk three key trends in healthcare. And as is our tradition on Seven Investing. Now we’re gonna throw data right into the deep end. It’s her first show, and we are going to lead off, she wants to talk about what’s next for mRNA. When it comes to drug development, I will point out that I learned on this show that it’s mRNA not Mr. Na. So this is a new tech for many of us who’ve I’ve taken the Pfizer vaccine. So I’ve had an mRNA based vaccine. And this is not a technology that the general public really knows about. But it could be a major platform going forward. Dana, what’s next for mRNA? technology?
Dana Abramovitz 13:09
Thanks, Dan. Yeah, no. So the M stands for message. So it’s messenger RNA. And that’s the cool thing, right, is that that message is translating what’s in our genes, to what our cells are going to turn into a protein. And so mRNA technology, and just the ability to, you know, inject or, you know, give a new cell that that new message for the cellular structure to create is just a new tool for scientists and drug developers. So it’s just, you know, just another new tool in their toolbox, which is great. The thing, you know, the interesting thing, and I know, there are a lot of people that are, you know, talking about the vaccines and the worried about the vaccines, and that drives me crazy. It’s just, you know, like, this is not new, you know, messenger RNA, it’s just part of our, you know, the central dogma of biology and how information that’s stored in our genes in the form of DNA gets translated into protein, which is the cellular machinery. And it’s, you know, something that people have been studying for decades now. And, you know, that’s how we were able to turn, you know, all of that knowledge, including knowledge that I contributed to, right. So no, I’m from the RNA field. You’re turning that into actionable tool, right? We were able to do it so quickly, because you know, people have been studying it for so long. So it’s, you know, it’s not new. It’s just that it’s now a new tool, because we’ve figured out how to deliver it to a cell. And so the cool thing is right, and so now You can use it to treat diseases of mis-splicing. So. The process of I know, I’m getting deep into the science, I
Dan Kline 15:10
No, no I’m just gonna say you’re gonna have to
Simon Erickson 15:12
I got my coffee, I’m ready Dana
Dan Kline 15:13
You’re gonna have to explain mis-splicing, that is not a term I’ve ever heard before.
Dana Abramovitz 15:18
Right? Okay, so So, um, biology so awesome, right? So you know, how can, our cells are really efficient, right? So we have in our DNA, the ability to have multiple types of information in one thing, right and one piece in one gene, right, but we can make it into different proteins based on different cells, different needs, by removing parts of it, and splicing it together. And that’s all done as the RNA, right, so the DNA gets transcribed, it becomes a pre messenger RNA. And then it’s splices and we remove bits. So introns, splice it all together. And then now you have the mature mRNA, that mature message that gets translated into protein. So this is basic biology.
Dan Kline 16:13
So from a practical point of view, from, from what I’ve read, the COVID vaccine was a relatively easy application of this, because of how it’s delivered. It’s not so simple to say that it’s the road to other uses of mRNA. It’s not necessarily going to go as quickly. And also, we’re not going to have half the medical companies in the world pursuing it with billions of dollars. But realistically, what do you think is next in the pipeline that we’ll be using mRNA for?
Dana Abramovitz 16:42
Right, so, um, so, you know, my guess so there are diseases where, you know, that maturation of the message fails. Right? So neurological diseases, like ALS, or Parkinson’s is one of those right? And then there are a lot of diseases where a protein drug or biologic is used, right? You know, so insulin, for example, you can, you know, like, you know, people with diabetes can use insulin, right. And so sometimes that protein can’t be made into a drug, right? Because making that protein in vitro, right. So outside of the cellular machinery doesn’t work, because the protein has to fold into a three dimensional shape in order for it to be active. And if you do it outside of the cellular structure, it may not fold into the proper shape, or the delivery. So if you have to lyophilize it, and reconstitute. So dry it down, remake it with liquid to inject, it may lose its shape, right. But, um, with this mRNA technology, you can, you know, give it to a cell, and then the cell will make the proper correct protein. And it can it’ll do its own folding. Right. So, you know, that’s a possibility. That the caveat, so So again, it’s a tool, and I’m not saying that everybody’s going to be able to do it, right? These are possible uses for the technology, you know, there, there are caveats, right. So, you know, making sure that the mRNA gets to the right cell type that needs to produce that protein, right. So all cells go through that same, you know, process of maturing and making a protein, but not every cell needs to make that protein. Right. So how do you deliver it to the right cell? So that’s going to be a delivery problem, we, you know, we see with, you know, cancer drugs and using antibodies to deliver. So, you know, there’s that possibility it hasn’t been tested, right. So, you know, we have that one thing, and then the next thing is, you know, we’re not actually fixing the gene. So that would be a gene editing tool, right. And so, you know, mRNA, degrades, you know, a patient who would be using this as a treatment would need to, you know, continually make it right. And so, you know, like with the vaccine, you know, with the Pfizer’s in the journal, you get two doses, your cell makes the, the antibody or the antigen spike protein so that your system can make the, the antibodies for it. That’s a great technology, you know, using it for drug treatment, you know, we’re gonna have to figure that out and just see if it’s something that patients are really going to want to, to utilize. And then you know, the last one, you know, is just titrating and making sure the right amount of RNA is producing the right protein, the amount of protein for the event, the treatment. So, you know, there’s there’s still a lot to be done. But the cool thing is, and you know, like I said, you know, people since, you know, Tom Tech won the Nobel Prize for, you know, looking at RNA splicing and seeing cell splicing in 1993, you know, people have been studying new RNA, like, what can we do with it? Right? So this is just, you know, it’s a tool that we can do that we can use. Um, you know, it’s really exciting. And to Yeah, let’s, let’s, let’s see, there’s, there’s lots of potential and possibility.
Dan Kline 20:33
Yet another year, I did not win the Nobel Prize. I didn’t do anything worthy of it. But I kind of feel like I should get one. Anyway. Simon Erickson, you wanted to weigh in here?
Simon Erickson 20:42
Well, Dan, first of all, I hope that you make your coffee extra strong, we start talking about messenger RNA with Dana on the show here, good luck keeping up for both of us, right.
Dan Kline 20:50
She actually sent in our notes that as a grad student, she made messenger RNA. And she said that to illustrate that this is relatively cheap and easy to do. And it’s, of course gotten more efficient. I’m not sure in college, I could make coffee. So this is a, this is an unbelievably it’s weird enough to say like, what, when I was in college coffee wasn’t as big a thing as it is now. Like, there wasn’t really Starbucks, so but I am not sure if you gave me a pot in the recipe and stuff and you’re making mRNA Maxx is making who knows what, you know, in his in his basement. So I feel a little bit left behind that said, I now make an excellent risotto. Simon, you want it to weigh in with some comments here.
Simon Erickson 21:31
But this is innovation. I mean, this is I think why I’m so excited to work with Dana and you know, and take notes every time Dana says these things because this is where the field is heading. This is where the science wants to go. Dana, one thing that I just wanted to add, that you mentioned was the delivery mechanism for software. So it should be just so important, right? We talk about kind of upstream versus downstream, right? Do we want to edit the genome and change the genes themselves, or do we want to, you know, change how they get expressed, and change the RNA and you make sure that you know, the proteins that we do not want to be created or not being created, I really liked the approach of RNA in the in the fact that it’s kind of tissue and organ specific, right, you don’t have to have it go to your ears, and your feet and your toes and your liver all at the same time, you can actually pick where the problems are occurring. And I think that that might be one of the most promising areas of this field of research.
Dana Abramovitz 22:17
Yeah, and then and that’s going to be good delivery, and to finding that mechanism to target those individual cells. And, you know, like I mentioned, we are doing it with, you know, some cancer technologies and the antibodies, and just, you know, we know enough about different cell types, and you like, what types of receptors that has so that we can kind of, you know, target it. But you know, like, you know, I’m not saying that this is happening tomorrow, I’m just saying that this is now a new tool, and we can explore it. And it was just so exciting that we were able to, you know, find a use for this so quickly. You know, just because of the years, the decades long, basic research into this problem.
Dan Kline 23:05
And I’ll just jump in and say thank you science, like, as a lay person, it tends to feel like science is standing still, because there aren’t generally news articles, you know, that normal people are reading about, you know, advancements in mRNA. And it takes an awful lot behind the scenes that you don’t see before something happens. That’s why there’s some vaccines skepticism, because to the average person, they go, Wait a minute, did they just spin this vaccine up in six months, and here’s the reality, there’s 20 plus years of research going into this, and then a need came along. So it’s sort of like you know, if you’re really really good at, you know, starting a fire because you like to camp, and then all of a sudden you find yourself without power in the middle of nowhere. those skills come in, you practice them, you you learn them. That is what is happening here. But we want to talk three key trends in healthcare. Dana actually has to leave at about half past. So I wanted to get Simon’s in because I think Dana’s gonna weigh in on this as well. And Simon wants to talk about can value based care, bring down the cost of health care, healthcare, as we know, very, very expensive. I’ve talked about this many years ago, six or seven, eight now? When I worked at the Boston Globe, I had New York Times health insurance, went to the doctor knew what I had wrong, because my wife had strep throat. The doctor came in and I said, My wife has strep throat. The doctor wrote me a prescription and then left it took maybe 90 seconds, and I got an itemized bill for $570. Now my insurance paid the vast majority of that, but there is no part of that service that was worth $570. I understand you’re paying for the expertise, the medical school, all of that the infrastructure, still not worth $570 Simon Erickson value based health care.
Simon Erickson 24:45
I think this is one of the big innovations in health care, Dan, just like you mentioned is that I want to kind of connect the dots between what Dana just said, which is really innovative science, and then the business commercial side of this too, right of how we’re going to pay for some things like this, and we started the program talking about four trillion dollars a year in America, we’ve come a long way in getting the cost of developing drugs down. But it still costs on average $1.2 billion in 10 years of scientific research to get anything commercialized. And actually out there, you can be purchasing pills. And so how do we address this, you know, when we start talking about things like Car T, CRISPR, gene editing mRNA, a lot of these can run over several hundreds of 1000s of dollars per patient per treatment. And I think one of the things that’s been holding back a lot of this innovative science has been how does an insurer transition from something that’s to something that’s so expensive, and actually get it adopted in hospitals. And I think that there’s this concept of value based care is, is an approach that’s going to be seen a lot more in this, which is basically pay based on the performance of the drugs and the outcomes that you’re seeing in patients, and make sure that it’s working to justify the cost and the ROI of this. So I want to give an example of this, you know, there’s plenty of them out there, but I liked the one of Spark Therapeutics a couple of years ago, this is a company that was addressing macular degeneration, retinal eye diseases, blindness, you know, basically, that was found in children, but it was correctable with gene therapies. And so they released a drug like sterna, that would cost $425,000 per eye, or $850,000, for both eyes,
Dan Kline 26:19
A bargain, a bargain at any price
Simon Erickson 26:23
A bargain compared to you know, not being able to see the rest of your life having to have a helper, you know, assist you through everything through decades, it was an incredible bargain. But then if you’re paying $850,000 up front, you’ve got to make sure that it’s going to work. And so what did Spark do, you know, they set up for reimbursement, three, a short term efficacy study, and then a longer term durability study where there would be payments that would be made by insurers, or whoever the payer was, that would come over time, as long as the patient responded, as they expected to respond. And for a drug like this that showed it higher than 90% efficacy, very, very strong drug, great for science, great for patients, that was made possible by this kind of shift to value based care. And I think we’re going to be seeing a lot more of that, especially as innovation in this field continues.
Dan Kline 27:07
Simon, I know Dana wants to weigh in. But is this similar to what we’re seeing with like, a shift to telemedicine and health insurance companies doing things? Like if you hit your appointments, or, you know, if you prove that you’ve gone to the gym or stopped smoking or whatever it is, they’re they’re incentivizing actual good health. So is incentivizing efficacy, efficacy, kind of the same thing?
Simon Erickson 27:27
Similar in the idea, Dan, I think that it really goes after the most expensive conditions out there, right? Like, we know, we need to be healthy, we know we need fitness data, we want to check in and make sure that you know, we’re we’re running and eating healthy and all those things, but things like immunotherapies, you know, in the full field of oncology, some of the stuff that’s really, really expensive out there needs to be justified, that it’s working. And I think that this is, you know, one of those fields, yes, there’s the other side of it, too, that’s kind of more continually checking in on you, but I’m talking about kind of the most expensive treatments that are available.
Dan Kline 27:58
Dana, I know you wanted to get some words in I know, you have to go. So why don’t you say your piece on value based care?
Dana Abramovitz 28:04
So yeah, so value based care is another area where I’ve done some work more recently. And, you know, so, you know, a lot of it came from, you know, what the center for Medicare and Medicaid was, services were doing, you know, coming out of the Affordable Care Act. So, you know, again, innovation, but you know, innovation, in terms of your reimbursement and payment and, you know, making sure that patients were getting the services that they were needing that, you know, Medicare and Medicaid we’re paying for, right? And so, you know, I know that you know, and this was, you know, just beyond necessarily drugs, but you know, like, for, sorry, my phones ringing. For like surgeries, you know, in hospitals, right, so, you know, um, you know, different medical devices. So how would you, you know, check on on those things, sorry, The answering machines turn.
Simon Erickson 29:06
We’re very excited about this topic, Dana.
Dan Kline 29:10
We’ve had dogs, we’ve had babies, I disappeared, once my computer just went absolutely insane. There is nothing that can’t just we’re going to talk about this a lot more. We’re going to Dana’s gonna be a regular presence here on Seven Investing now, but she has a pre existing engagement and has to go so I don’t want her to be late.
Dana Abramovitz 29:30
What do I do, I want to say I have a little bit more time watching the time, but I just wanted to say that you know, like, so value based care, you know, extends beyond, you know, just drug development. And so a lot of the other things in healthcare, so here, like what insurers are doing, what hospital systems are doing, you know, people that are in, you know, the medical devices, as well. So, you know, all of that all of that focus is going to you know, play a part in looking at the companies that we’re evaluating
Dan Kline 30:04
That was Dana Abramovitz. We are so excited to have her as our newest investor on Seven Investing now yeah actually hit us up at seven investing with with questions for Dana podcast topics you’d like her to do with with myself and Maxx segments we want to do in the show. It’s a different perspective than for them than from where Maxx Chatsko is coming from. But it’s also a very complimentary perspective. So it makes us immeasurably stronger as a team. It is also going to be fun when I talk about retail, having a different perspective, being able to talk about that as well. With that, Dana thank you. Welcome. We see you if not later this week, certainly next week and we will see you Friday on the team call which goes live on the eighth so if you join at Seven Investing.com/subscribe, you will be able to see Dana and her first pick live well not live taped and defending it explaining it to all of us, you’ll get to watch mass Maxx asked some great questions. But with that, I’m going to talk about the third key healthcare giveaway takeaway. And that is can Amazon, Apple, or Google disrupt the healthcare market? So here’s how I look at it. You have a lot of insurance companies whose interests are keeping things the same? They they might go incrementally and and maybe they’ll make some little changes, like paying for a teledoc appointment, they might rotate in different drugs that they’ll cover and different things that they want. But they don’t want to disruption. They don’t want to disruption, because they are the thing being disrupted. So if you look at Amazon, they have every incentive to say we are spending X amount of billions of dollars a year on employee health care. How can we build something for our employees that then become something we can roll out to other companies and that’s what they’re doing. So they have a system they piloted in Seattle, where if you wake up Simon and you don’t feel well, you have the the sniffles, or maybe your your stomach’s not feeling so great. You can have a teledoc appointment. And if the doctor decides you need it, Amazon will dispatch a nurse to your house. And that nurse will take vitals, maybe take a blood sample, maybe take some other unfortunate samples, whatever it is, you need to be giving, they’ll do that. So you’re having the sort of hybrid approach where you’re getting full on care. And that can be cheaper than actually going through a health insurance company because there’s not necessarily a middleman. And now it might be a contracted model. Amazon uses a lot of contractors to supplement its workforce. Like you know the same way it’s the janitor might be a contractor working for third company, the nurse and the doctor might work that way as well. But they have the heft to figure this out. Google, Amazon and Apple also all have health care devices. So I am wearing my Apple Watch. And my Apple Watch tends to terrify me because I see way too much information about my heart rate. So my my resting heart rate is in the 60s. But when I’m doing this type of rate, it goes up to about 104. That causes me to Google, what’s a normal heart rate? And should your heart rate go up this much just from talking? And so but it also gives me all sorts of information. Did I move enough today did I did I stand? There’s a device from Amazon that will actually give you like sleep patterns. And the same thing with Fitbit, which is a Google product where you can wear it and it will tell you you’re not sleeping enough you’re not getting enough REM sleep. All of this is going to sort of filter into being able to disrupt healthcare. One of the things Apple asked for you to do when you wear the watch is can we aggregate your data? So there’s an AI into this I’m we’re going to talk about AI with Steve on Friday show based on someone asking us on Twitter. But so imagine if they go and notice a trend of people who are Simon’s general health Simon’s in, in good health, he he’s in good shape. He he works out, you know, all of those things, oh my god, they have a predilection towards some form of cancer, or they get ALS at a higher rate or who knows what it is. But there’s data you can’t necessarily aggregate across doctors and platforms that you can through devices like the Apple Watch, or the Fitbit. So I think there’s going to be massive disruption in this space, as they learn more data and can just say, hey, why is there a cancer cluster in Houston, and maybe they’ll find out that there’s something wrong with the water or there’s something environmentally causing it. We’re going to get actionable changes. We’re also going to get much more ability. You know, we’ve talked about the insurance company, I think Steve uses it, that you let them monitor you’re driving and if you prove to be a safe driver, you pay a lower rate. A lot of insurance companies use some form of that. But that particular company is actively monitoring. You might get Hey, Simon, if your watch says that you’re you know, you’re getting the proper exercise every day, we’ll actually charge you a lower rate and same thing if you know we see that your your food intake is better. We’re gonna see a lot of that and it’s really going to upset the status quo. Again, not a lot of incentive for the CVS is in the Walgreens and the Aetnas and the insurance companies of the world to want this type of change, but we’re absolutely going to have it. Sam Bailey there’s a question from our very own Maxx Chatsko. Let’s take that one as I think Apple’s ongoing privacy push is not so subtle indication of its health ambitions. Privacy and health information go hand in hand. I think you’re right. And Apples been very careful to say that if I let them use my health info, no one’s gonna know it’s Dan Kline health info. It’s just going to be put into a group of 47 year olds lives in Florida still can lose a little bit of weight, you know, but is active and works out whatever the group they decide. It works a lot like television ratings, like, like with television ratings, we don’t actually know what Simon watches. But we know what people like Simon watch, and that that sets advertising rates, we’re gonna see that with health care. Simon Erickson, I know you want it to weigh in here. Aside from my being a little bit silly about your particular aggregating information, what did you want to add to the topic of tech and health?
Simon Erickson 36:01
Well, I agree with you, Dan, this is a big trend that we should be paying attention to. And, you know, we know that hospitals are overcrowded, especially primary care, physicians are overcrowded. But the system as a whole is kind of stressed out. And there’s got to be a more proactive predictive way to improve healthcare. This is a way to do it. Right? All the companies are using AI, all the tech companies to do it, this exact same way of monitoring, you’re driving if you’re if you’re living a healthy life, to get better rates. And in my opinion, I think this goes to the employers. You know, I think that the way that you actually provide the incentive, because there’s a lot of privacy concerns, like you mentioned, people are kind of, I just don’t know, if I want to have those tech companies have access to all my data. But you know, if you’re working for a company that picks up the tab for most of your health care insurance, and they say, hey, if you sign up for this program that we have with Apple, we guarantee your data is safe, and your privacy is safe. And you’re going to get a bonus and incentive of $5,000 a year to do it. And we want to encourage as many people as want to to do this. And if you don’t, that’s fine, too. It’s an opt in program, I think you probably wouldn’t get a lot of people who would say yeah, I’ll take the money. And I’ll be healthier, and I’m comfortable with this. So we’ll see how it plays out. It’s definitely an incentive, not only for the system as a whole, but those tech companies. Healthcare is a new frontier for them.
Dan Kline 37:13
Yeah. And the reality is, these tech companies are so big, that it makes sense for them to say, okay, we’re spending whatever the number is 7000 per year per family of employees, because your health insurance at these companies are really good. Like when I was a contractor at Microsoft, so I wasn’t on their health care plan. But I was privy to what it was. And it basically it didn’t quite cover 100% because if you cover 100% people take it that don’t need it that have health insurance options from elsewhere, but it covered basically everything. And they realize things like paying for your gym, or you could buy a piece of exercise equipment every year that actually improve the health of their workers. We’re seeing in the US a change to the attitude of healthcare, I think if there’s one thing, oh, there’s a few things the pandemic has taught to us. First, you want the guy making your burrito to have paid sick days, because the last thing you want is him to come into work and infect a bunch of people because he was worried about getting paid or not getting paid. The second thing we’ve learned is that if Simon’s not feeling well, maybe he can do his meeting over Zoom. It’s not that important to be in person. It’s nice, I miss in person. But we understand the sort of risk reward of it. That’s going to allow companies to experiment, we’ve seen this on sort of a private level, there are a number of let’s call them faith based that there were people of the same religion are banding together, paying money in and essentially hiring doctors. And basically, all your healthcare needs are free, and you’re buying, you know, disaster insurance in case something wrong happens and you need to go to the hospital. So there are all sorts of models and the the breadth, the scale of an Amazon. Imagine if Amazon decides when they are partnering with other companies. But if they say, hey, any company in a state Amazon has distribution in you can buy into this and all of a sudden a small company like Seven Investing can offer Amazon concierge healthcare service. Like that would be a massive, massive benefit. And right now we’re a company that has employees in multiple states. It’s really, yeah, multiple countries, which which not an issue there because Australia has universal health care. So Anirban does not need that. But the rest of us it would be tricky for you to find healthcare that could operate in each state, it becomes very much like sales tax, which is unbelievably difficult to figure out as you’re selling around the country. It’s why you don’t do it. It’s why the computer programs do it. So going forward, I think this is what’s going to change. And people ask me all the time, you know, do I think Apple can go from a trillion dollar company to a $4 trillion company like and I think they can because healthcare is massive. And I think it’s all going to be different. The one thing I would tell you to sell. don’t own insurance companies. I don’t think the future is bright for things we don’t like that don’t perform well. How many of you have had a sick relative If I have to fight for medicine? I have a cousin who has lifelong will be battling leukemia, and they found a pill that would work for him and did work for him for a number of years, he’s on something else now. And it was they wouldn’t cover it, and they had to fight it. And eventually they did approve it. But that’s a system people don’t like I liken it to cable, we all got cable from our cable provider and watched our bills steadily go up while the service went down until we didn’t have to. And we’re going to be in a case with healthcare, where we don’t have to.
Simon Erickson 40:29
Well and Dan to say to that, too. I mean, I think that that is something that needs innovation, right? We talked, we chatted about value based care earlier in the program. And the insurance companies are on the same page, they don’t want to just be spending a ton of money for you know, something that’s reactive, they want to be proactive and keeping people healthy, too. I think that’s going to kind of show you know, who is ahead of the curve on changing this system. And we talked a lot about also kind of the fitness side of this, the basic health, the primary care side of it, this is kind of more of a nudge, right, eat healthier, be healthier, sleep more the things we kind of already know. That’s a very, very different topic than the what I would consider like the really big things that we really should know about. Right? Like, say we’re talking about genomes earlier, say that I am predisposed with a gene that I can see through is through a DNA sequence that I take that I’m predisposed to develop a certain form of cancer. But if we can correct that really, really early on, I wouldn’t get it, I wouldn’t have to go through all the treatment later on in life. That’s a much, much bigger problem than just saying, hey, Simon you needto sleep more. And so like the diagnostic side of this, especially in oncology, and the more expensive, more serious conditions, that’s going to be really where people are going to say, hey, AI, get this right, make sure you’re right, we can’t be 95% sure, we need to be 100% sure that this is what you see. And this is how we treat it. That’s a that’s $100 billion plus per year that we’re spending on cancer drugs alone. Nevermind the time the treatment to it’s a huge opportunity for somebody cracks this.
Dan Kline 41:54
Yeah. And you don’t have to be 100%. Right. So let’s say what happens is, you run all your markers, you do all your genetic testing, and Simon, you are more likely than most to get a certain type of cancer. But if you avoid these things, you’re less likely to get that cancer. You can make not painful, proactive steps that, okay, maybe you drink less coffee, or you know, or whatever, don’t, don’t don’t have as much red meat or whatever it is. Well, those aren’t major steps and they’re going to be beneficial even if it turns out, you beat the odds and don’t get that type of cancer. So I think we’re going to have two things. We’re going to have an absolute medicinal overhaul of how we deliver drugs, how we test drugs, and then we’re going to have a disruption to the system of, you know, years ago, I would have said it would have been governmental where we all understand the idea that we’re paying X amount of billions into health care, and a lot of it is getting wasted. And we should probably just all have healthcare that’s become so politicized. I don’t expect that to happen. I do think companies which have a lot of power, because they’re spending a lot of money on health care, are going to look at how they’re spending money and create or find a better way. And then I don’t want to say benevolently because there might be a markup on it, they are then going to make that available to other companies and scale is going to matter. So I’m really excited about this. We’re going to be talking about this with the whole team. But most specifically with Dana with Maxx. I’m looking forward to it. Simon, this is a weird show. We’re not doing many of the regular segments. But we are going to hit our finisher Sam Bailey, if you could share the graphic. Which market segment will create the most wealth for investors over the next decade? Only about 30% thought it was healthcare about 56% thought it was artificial intelligence, 5.5% percent thought cannabis and only 7.7% said space. Simon, if you told me the next 30 years, I think I would have said space. I think the idea of colonizing like I believe very much in the we can’t stay on earth we have to go to other planets there had you know, first of all be space tourism. And then it’ll be literally like, Oh, yeah, my kid lives on Neptune, or whatever it happens to be, it’s probably not space travel, looks anything like we know now. Which of these segments would you have picked?
Simon Erickson 44:08
I would like the one that combines all four of them together, Dan, where it’s healthcare and AI and cannabis and space is some opportunity that appeals to all of those. You know, three of them go vertical, and then AI goes horizontal, which is why I voted for B for this one because I think AI can be used kind of for a whole bunch of different industries. And it will be used. It’s almost like when we say AI think that in maybe even five years time it’s not even a buzzword because there’s like oh yeah, we’re using machine learning for this, this and this part of our business. So I would go B personally.
Dan Kline 44:37
My favorite use of AI and this flew under the radar. But about 18 months ago, maybe McDonald’s bought an AI company, and they use that AI in their drive thru line. So instead of the old line of like, would you like to supersize that or would you like fries with that? Or could I interest you in a coke or whatever they were trying as their upsell. They’re using AI to determine based on the weather, the makeup of you, your car, whatever it is, what upsell to sell you. So they might look at me and go, Oh, would you like a Mcflurry? With that they might look at you and go, Oh, hey, can we get you a second cup of coffee there, whatever it is. So you’re gonna see AI, you might not even see it, there is AI in places where you don’t know where it is. I actually talked with an executive from Chick-fil-a on a cruise ship, who said they technically could do a facial scan and know what you’re going to order. But they’ve decided that you know, that, that their customers would not like that. They don’t want to see pre populated orders, like, but that’s how accurate it could be. Amazon, we’ve talked about this many times, uses AI to pack boxes before you order it. So like today, I ordered some tea and some razor blades. And they would know, at some point before I placed that order, that’s statistically 100% likely someone’s going to order that and they’ve already packed it before my name goes on the order. So we’re gonna see AI and all sorts of places in 10 years, I actually think that’s the one. Healthcare, it’s a longer horizon. And I think a lot of money’s gonna move around in that space, it is going to create wealth. It’s also going to create failure, like you’re gonna see, you know, look, I love CVS, the retail business, I don’t love see CVS, the they own Aetna part of the business, I think that’s going to be very problematic. But even CVS is working to disrupt healthcare with their minute clinics, with their ability to administer vaccines and, and deal with pretty much everything up to a full physical like anything, you know, more simple than that you can handle on a walk in basis. And that’s kind of disrupting their own business, which is a little bit interesting. It’s gonna be something we talk about quite a bit on the show. Simon, I’ll give you the last word here.
Simon Erickson 46:36
And our colleagues, Steve Symington, who’s on the you know, the show right now here with us, he’s actually finding those opportunities for the innovators that are using AI for verticals for specific opportunities. I know that several of his recommendations in recent months have been tapped into AI. Pretty exciting stuff. If you ask me that he’s looking at right now, Dan,
Dan Kline 46:54
Steve will be joining me and Matt Cochrane on the Friday edition of Seven Investing. Now there could be more of us where we’re going to do shows with all six of us, or all seven of us, we’re going to do shows with just one on one, we’re going to mix it up regularly. Today was exciting. I, I have to say I don’t like sitting in the background. But it was fun to watch Dana and for those of you who to give a little bit behind the scenes. Dana was having technical problems and logged on for the show correctly. Maybe 18 seconds before we went live literally. She couldn’t get her camera to work. at the last second one of us figured out hey, maybe change browsers. She had to restart her computer. It was touch and go whether Dana would have been calling in on a soup can and a string. So it is always exciting. Sam Bailey, I apologize for any gray hairs This caused you, we will promise we will we will try to make that not happen on Wednesday. If you’d like to get in touch with us, it’s very easy. And it’s firstname.lastname@example.org that’s our email. That’s your questions about your membership. You’re thinking about joining. You got a great business partnership you’d like to talk to us about. Whatever it is, if you want to interact with us in more of a dialogue about companies about you know trends in our spaces, that’s @7investing on Twitter. We’re also on LinkedIn where we are on pretty much every platform you can go to. Simon’s working on our Tik Tok where he does dance interpretations of our picks. We we have not allowed that one yet. But we’re always happy to talk on Twitter. I’m pretty much on Twitter, like 14 hours a day answering comments. I pretty much respond to everything. Very excited about all the new people Dana will bring into the fold. Simon you knocked it out of the park with this one.
Simon Erickson 48:31
I think so Dan, and you know, again @DanaAbramovitz7 for anyone wants to follow Dana on Twitter. We also gonna send out an invitation later today, not only announcing Dana joined to the team to our subscribers, but also inviting them to a Friday subscriber call. We’re going to be talking about our previous recommendations kind of any questions you want to ask us about our previous picks. Dana is going to be sharing some more insight about healthcare. And we’re gonna be seeing that later this afternoon. So if you want to get started with Seven Investing today, it’s a great time, because Friday is going to be a big day for us to discuss our previous recommendations.
Dan Kline 49:02
Friday is a coffee and a Red Bull day just to give you the schedule. At 10 o’clock, we talked to our new subscribers that call is really about how our service works, the basics of investing, how to get a brokerage account, all those sort of things. At 11 to 1230. We update our members on many of our past picks we each bring a few to the table and then we also take questions. We’ll also take questions leading up to that so if you’re a member and there’s something you want us to talk about a past pick on that show hit us up at email@example.com. Don’t do it publicly on Twitter because we don’t share what the past pics were on Twitter, but you can certainly dm us. I know that my DMS I have to approve you but everyone can DM me as long as we’re connected. So more than happy to do that. And then of course at 1230 we do 7investing now. So that’s 10 o’clock to about 130 we take 20 minutes off more or less and then we tape our marathon pitch call we all lay on our case for our May stocks. You ant to get in now seveninvesting.com. I’ve said this before. We are charging 711 prices for a Morton’s experience you are getting a top tier investing service and we’ve kept it inexpensive because we want everyone to be in it. If you’re someone who’s spending hundreds of dollars 1000s of dollars with a financial advisor, why are you doing that you can be a member at Seven Investing and get access to our picks. If you’re new to investing. It’s affordable. We want everyone in the tent. With that. For Simon Erickson. I am Dan Kline, I am tired. This was an exciting, adventurous show. We will be back on Wednesday. See you then.
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