Not the least was the announcement by Google’s YouTube that it is adding full high-definition 1080p streaming. This is higher quality than cable companies provide. So what does it mean? It means, among other things, that the networks are now in full panic mode. Already, the trickle of cable television cancellations has begun as users hook computers and media players to HD screens. Up to now, however, the trend has been limited largely to the more technically sophisticated. That’s changing.

True HD streaming and downloading have been available for some time on sites less well known than YouTube. My kids, for example, watch their favorite programs online at sites like Hulu.com, even though they could watch them on our rarely used television. When a feature comes to an important well-known site like YouTube, however, it has become mainstream…

You, as an investor, need to be aware of what’s going on. And frankly, most of my friends my age simply aren’t. Moreover, you shouldn’t be so naïve as to think that it is only hackers who are putting these alternative distribution channels in place. If you think Google founders Larry Page and Sergey Brin don’t know that they’re helping consumers circumvent the old distribution channels, I’d like to talk to you about some swampland in Florida…

Companies and institutions once thought to be permanent parts of the financial landscape are disintegrating. Others are arising. The entertainment and news industries are reeling from the impact of ‘the network’ while the entire functioning of marketing and advertising is mutating as the Net displaces obsolete communications industries.

Bet on More Convergence originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

A trickle of solid peer-reviewed evidence that most people are severely vitamin D deficient has turned into a flood. If the new consensus is correct, and I believe it is, increasing your vitamin D level could, for most people, add years of healthy life. It could also save the U.S. economy hundreds of billions annually…

D is not just another nutrient. Putting it simplistically, it is the über-nutrient that affects the way all other nutrients, not just calcium, are utilized. Virtually every cell in the body has a D receptor, even those in the brain. Until recently, however, few asked why. This is a particularly interesting question because there is very little vitamin D actually available in food. Most of our nutritional D, in fact, is added. Historically, the primary source of D, not only for humans, but for many other animals, has been sunshine. We convert the energy found in ultraviolet B in our skin to vitamin D. Obviously, there is something critically important about D if our prehistoric ancestors could manufacture it even during times of famine.

Now we see a compendium of solid peer-reviewed research indicating that many of our most troublesome and expensive diseases are symptoms of vitamin D deficiency. Rickets, apparently, was only the tip of the iceberg. Other diseases on the list of conditions caused or exacerbated by D deficiency include cancers, diabetes, susceptibility to bacterial and viral infections, autoimmune diseases such as multiple sclerosis, psoriasis, heart disease, stroke, osteomalacia or age-related bone mass thinning, osteoporosis, depression and even food allergies. Obesity, in fact, is highly correlated with vitamin D deficiency. In many of these conditions, risk factors drop within months, and by as much as 80%.

I know, I know. This is a financial newsletter, but living a longer healthier life is not just an end in itself. It is the most important component of an optimal financial strategy… The nature of exponential growth is simply this: The longer you live, the faster your portfolio grows.

The Uber Nutrient Worth “Hundreds of Billions” originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

Regardless, the prize for medicine this year is extremely significant. Telomerase is the ‘immortalizing enzyme,’ produced by stem cells. When administered to adult cells, telomerase adds life-extending telomeres to the ends of a cell’s DNA. There has been no more important discovery in the history of medicine.

The list of scientists credited with the discovery is sorely short, having ignored the contributions some other critical researchers who have made crucial contributions to the current state of the science — one of which runs a company in the Breakthrough Technology Alert portfolio. I’m glad, however, that the award will help bring attention to regenerative medicine.

As more people learn what regenerative medicine can do, it will attract additional capital and accelerate progress. It will also, of course, push up the value of companies that hold important patents covering telomerase and other stem cell technologies.

The most important patents associated with telomerase and stem cells are already in our portfolio.

The Nobel Prize that Matters originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

So what have we been waiting for? The answer is A) the will and B) permission. The will exists, but the permission, in America at least, has to come from the FDA — an organization that is, apparently, well-meaning, but actually behaves like a protection racket for the existing pharm industries.

Well, that doesn’t work anymore. We live in a new globalized world with instant communications, a relatively free flow of capital and high economic growth where it never existed before. You can’t stop the signal. You can’t stop technological and medical process, though you can drive them offshore.

China has capital, drive and no guilt at all about economic growth and the so-called ‘income disparity’ that is driving our current administration and crippling our economy. The Chinese are playing catch-up right now, furiously running to advance technologically and economically. Look for American biotechs to explore collaborations outside the U.S.

The Future Home of Biotech? originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

You may have read about the discovery, recently, of a new and radically more effective mosquito repellent. Based on molecules found in black pepper, it was not discovered using traditional laboratory methods. Instead, it came about through computer simulations based on knowledge of mosquito cell biology. This is just the tip of the bioinformatics iceberg.

Until recently, cell biology has been something of a “black box.” We could observe how cells functioned, but had little insight into the actual mechanisms. Now, though, scientists are learning how cells work on the molecular level.

Using mathematical models and new technologies for detecting molecular processes, researchers are extracting raw data from DNA and modeling the ways genes work and interact. To understand this field, you should view your own genome as a giant software program for manufacturing proteins.

The process of unraveling and decoding the DNA software involves massive amounts of data collection. Then, once collected, correlation and other forms of computer analysis are performed on those data to figure out cause and effect. How big is this challenge?

Consider this: Each human cell contains about 3 gigabytes (3 billion bytes) of pure data and instructions. If this information were written in book form, it would require 5,000 volumes, each 300 pages long. That’s 120 times larger than the kernel of the Windows operating system, which is about 25 megabytes of code. This data resides, of course, in each cell’s pinpoint-sized nucleus. The human body, in turn, has approximately 100 trillion of these 3-gig cells.

Add to this complexity about 5,000 different proteins expressed by each cell. Different cells, however, express different proteins. These proteins, the proteome, behave as computer commands and serve to communicate between cells.

The decoding of all these systems is, obviously, a huge computational challenge. It has only just begun and it would not be possible, in fact, without recent advances in computer technologies. As more powerful computing comes online, the pace of bioinformatics discovery will accelerate. Quantum computing, because it is particularly suited to sorting out cell biology, will enable a “quantum” leap in understanding.

Today, there are three main areas of research in computational biology. These are genome analysis, protein structure prediction and drug design.

• Genomic analysis is, as you would expect, the statistical analysis of genes. As more and more DNA is analyzed in conjunction with individual medical information, more is known. Among other reasons for performing this analysis, scientists are looking for the genes that cause or contribute to diseases.

• Protein structure predictions are based on computer models that integrate information about the function of these proteins. This is an immense task, as there are tens of thousands of proteins. Ultimately, understanding the proteome will enable truly personalized medicine, with minimal side effects for patients.

• With the knowledge gained from understanding the genome and proteome, computer models of target proteins can be created. Using these virtual proteins, drugs can be designed and tested using in silica simulations before testing in the lab.

The development of these virtual molecules, the heart of computational biology, is ending the practice of shooting blindfolded while hunting for drug candidates. Instead of randomly testing different drug candidates and analyzing the results, the field of candidates can be significantly narrowed using simulations. This radically improves the “hit rate,” increasing the speed of drug discovery and lowering costs.

Moreover, computer cell simulations improve as additional data are collected and integrated back into the models. Significant advances have already taken place in this transformational space. Medicine, incidentally, is only one area that is benefiting from bioinformatics. Many of the benefits are taking place in the agricultural sector. The genetic engineering of microorganisms is another area of enormous potential.

This new science of building and experimenting on virtual molecules may be the most important new experimental tool since the scientific method was codified by John Stuart Mill in the 1840s. As Moore’s law (the exponentially increasing power and cost-effectiveness of computers) continues to prove true, so will the power and importance of bioinformatics.

Regards,

Patrick Cox
for The Daily Reckoning

When Computers Meet Cell Biology originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

During the long noisy buildup to Van Jones’ involuntary resignation, not one word about the controversy appeared in the paper pages of The New York Times and many other MSM outlets. Only now are those who depend on these old media outlets even hearing Jones’ name; and it is often in stories that infer that he was somehow smeared.

It is a remarkable state of affairs when important news and objective fact are being discovered and reported by a lone individual using nothing but his computer and an Internet connection. Meanwhile, old media are losing money and firing reporters daily.

This is the power of technology. We will continue to see this sort of disruption across the board, but this specific lesson concerns old media. Few of these old media institutions are capable of adapting…

When we finally emerge from this government-created fiasco, it will be a far better and more profitable world. As old institutions crumble, new ones will be born, and we’ll invest in the best of them.

The Only Worthy Van Jones Takeaway originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

The sequencing of the human genome has resulted in the emergence of an enormously important new branch in the biotechnological sciences. The most common terms for this field are ‘bioinformatics’ or ‘computational biology.’

Until recently, cell biology has been something of a ‘black box.’ We could observe how cells functioned, but had little insight into the actual mechanisms. Now, though, scientists are learning how cells work on the molecular level. Using mathematical models and new technologies for detecting molecular processes, researchers are extracting raw data from DNA and modeling the ways genes work and interact…

The process of unraveling and decoding the DNA software involves massive amounts of data collection. Then, once collected, correlation and other forms of computer analysis are performed on those data to figure out cause and effect. How big is this challenge?

Consider this: Each human cell contains about 3 gigabytes (3 billion bytes) of pure data and instructions. If this information were written in book form, it would require 5,000 volumes, each 300 pages long. That’s 120 times larger than the kernel of the Windows operating system, which is about 25 megabytes of code. This data resides, of course, in each cell’s pinpoint-sized nucleus.

The decoding of all these systems is a huge computational challenge. It has only just begun and it would not be possible, in fact, without recent advances in computer technologies. As more powerful computing comes online, the pace of bioinformatics discovery will accelerate. Quantum computing, because it is particularly suited to sorting out cell biology, will enable a ‘quantum’ leap in understanding.

The Last Emerging Tech originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

That’s going to change.

Moreover, there will be huge profit opportunities, in many enabling technologies, for those who invest accordingly. And today I’m going to tell you about a company that will hand you your best chance to make a transformational fortune.

We know that many current treatments work on some people, yet not others. Some drugs are safe for many people, but have dangerous side effects for others. This is because all of us have individual differences in our genetic code based on heredity and environment. Even slight differences can lead to very different reactions to medications.

This has created serious regulatory problems. Drugs are denied regulatory approval not because they do not work, but because some fraction of the population suffers adverse effects. As a result, we are often denied incredibly effective therapies simply because they are not universally effective.

This shockingly primitive state of affairs exists because, until very lately, we simply have not had the tools to get to the genetic roots of disease. Scientists and pharmaceutical companies haven’t precisely known how a particular drug’s chemical profile interacts with a genetic one. Medical science, in turn, has been unable to tailor drugs to work with a specific genetic makeup.

This is rapidly changing. Just a few short years ago, the human genome was first mapped. The genome, as you know, is the entire collection of genetic code that defines us at a biological level. Now scientists are studying single genes and their individual expressions.

It is meaningful, from the investor’s perspective, that Dr. Francis Collins, the head of the Human Genome Project, has just been selected by the Obama administration to head up the National Institutes of Health. Collins has long been a prominent champion for using the knowledge gained from human genome to accelerate personalized medicine.

This is important because institutional forces, with lobbying clout, always resist change. Much of Big Pharm, and its regulators, are vested in the “one size fits all” model. Many of the old players fear personalized medicine because it threatens the existing hierarchy. Collins’ presence at the top of the NIH will help counter this institutional resistance.

Incidentally, Collins has stated that genomics is currently where the computer industry was back in the 1970s – at the beginning of a technological revolution. While he was speaking in scientific terms, we should remember that the ’70s was also the right time to begin investing in a diversified portfolio of breakthrough computer technologies. Those who did so, despite claims that it was too risky or early, were made rich.

Dr. Collins is not alone in his views about personalized medicine. Former FDA director under G.W. Bush Dr. Andrew Von Eschenbach urges that the FDA approval process be overhauled and streamlined to help accelerate the adoption of personalized medicine. He is on record predicting that the medical industry will, in fact, undergo this profound metamorphosis.

I won’t pretend, by the way, that the prospect of socialized US medicine does not threaten the pace of this transformation. If American pharm’s prices and profits are controlled by the same people who run the Post Office and Medicare, it will not be good for R&D. It will not, however, stop progress. It will only shift it offshore.

Canada and much of Europe have squelched innovation in their countries by nationalizing health care. Rather than allowing drug companies the profits needed to fund future medical technologies, they mandate cheap care. This is why we regularly see politicians from these countries coming to the US to avoid long delays or get therapies unavailable in their own countries. I live in Florida, incidentally, and a million or so Canadians winter here annually. The weather is a factor, of course, but so is our superior medical care.

Many Asian and Eastern European countries, though, have learned from America’s past successes. They are more than willing to become the next medical science powerhouses.

I speak regularly with the CEOs of some of the most important breakthrough medical companies. Universally, they tell me the same thing. They are all constantly courted by Asian investors who come with the blessings of their political leaders. These American CEOs are saddened, as am I, by the prospect that they may be forced offshore. They are, though, unwilling to halt the progress of medical science in the misguided quest for lower medical costs. I maintain hope, by the way, that Americans will stop this self-destructive move toward socialist health care.

In Greek mythology, Proteus was the son of Poseidon, who could change his shape at will. From this comes the adjective “protean,” meaning versatile, flexible and adaptable. It is not coincidence that this also describes the proteins expressed by our genes.

By now, the public is somewhat aware of genome progress. Now that the code is cracked, however, we know that it was simply the first step in the process of developing truly personalized medicine.

Though our genome contains the basic information that determines our biology, our proteome is the entire domain of protein chemistry that regulates the structure and functioning of our individual cells. By extension, the proteome determines how each of our bodies function. Everyone’s proteome is unique, because each of us has a unique genome and has been exposed to unique environmental factors.

The human genome contains a staggering amount of information. If it were a book, it would contain a billion words. Yet consider this: Each individual gene can determine the cellular manufacture and function of many, many proteins. Genes are merely the instructions for making proteins. Unlike our genome, which stays mostly the same over time, our proteome is always in a state of flux.

Proteomics concerns itself with these proteins and their interactions. These interactions determine the course of nearly all human diseases. They also open up entire new avenues of treatments and investment.

One important proteomic avenue is cancer chemotherapy. A recent study of personalized medicine by Scottsdale Healthcare showed that when cancer patients were individually profiled at the molecular level, treatments were more successful. Tumors that had resisted shrinkage using several courses of conventional chemotherapy were successfully treated when the patient’s individual genetic makeup was used to customize treatment.

Many of these personalized treatments use therapeutic monoclonal antibodies directed against specific proteins. They work only, however, in specific tumors that strongly express that particular protein. For example, tumors need to develop new blood vessels in order to grow. If the protein instructions are known, antibodies can be developed that prevent new blood vessel formation by these tumors. Antibodies can also be developed against other growth factors that feed the tumor’s growth.

We have already seen big investor successes in this arena. Early investors in Genentech struck gold. Genentech, now owned by Roche, was the first company to develop a targeted proteomic cancer therapy when it brought the breast cancer drug Herceptin to the market in 1998. Yet Herceptin is effective only in less than a third of breast cancer patients. In some, it can trigger dangerous cardiac side effects.

The FDA, therefore, has approved procedures to test the breast cancer for the genetic protein expression that is specifically targeted by Herceptin. Women can now be individually screened for overexpressing the particular HER2 protein that Herceptin targets.

Regards,

Patrick Cox
for The Daily Reckoning

The Impact of the Genome originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

If you were at the Agora Financial Investment Symposium in Vancouver, you may have heard Juan Enriquez announce that Exxon Mobil had given Synthetic Genomics Inc. (SGI) $300 million to work on producing biofuels using algae. SGI is run by Craig Venter, the man who broke the human genome. Exxon is not a company known for wasting money on environmental gestures. The energy company wants and expects that Venter will find a way, using genomics and algae, to produce raw materials for its refineries.

The startup Solazyme, which I’ve written about before, just picked up an additional $57 million in its quest for algal oil. Solazyme is targeting not only fuels, but also oils for cosmetics and the food industry. Solazyme is concentrating on using sugars, instead of sunlight. The company uses biomass and industrial byproducts, including cellulosic materials and waste glycerol, to feed their algae. As a result, they can grow algae in dark tanks, which has obvious advantages.

Then there is the wild card, Joule Biotechnologies. Little is known about this company except that the photosynthetic microorganism it uses to produce energy is not algae. Some are reporting that they are harnessing bacteria, but that is not yet certain. Currently, however, the company claims it can produce fuels competitively when subsidies are factored in. I don’t believe you can or should count on subsidies, but the core technology may be improved to the point that it is honestly profitable…

Fortunes will be made in this space, and we intend to have a piece.

Biofuels are Back originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

There is, however, another aspect of companies that control breakthrough medical technologies that makes them immune to downturns: Their initial customers include extremely wealthy early adopters.

The number of high net-worth individuals — people controlling at least $1 million in assets excluding primary residence — has been growing dramatically for decades, far outpacing inflation. They and their immediate families comprise a population that may exceed 25 million people. Spending on luxury items by HNWIs and family members remains strong. While the biggest concentrations of HNWIs are still in North America and Europe, the fastest growth, by far, is in China and India.

The market segment that continues to buy Ferraris, yachts and private jets will also buy regenerative therapies for themselves and their loved ones. HNWIs are largely immune to the big economic fluctuations. When stem cell therapies bestow the power to rejuvenate hearts, livers, skin and cartilage, even at sky-high prices, there will be millions and millions of happy buyers.

A Recession-Proof Sector originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.