Author Archives: theusernamewhichismine

Writer for sale

Very small post today because I forgot to write one, but I hope tomorrow to write about Beam Therapeutics so watch this space!

Anyway, I have a job, but I’m always open to new ones. I’ve looked at becoming a stock writer. I know it’s not glamorous or 6-figured, but writing about biotech and pharmaceuticals is a something I enjoy and a job I think I’d be good at. Don’t take this blog as the only signal of my quality (or lack thereof) I write most of these last minute because I have my own 9-5 right now. But I think some of these posts that I’ve spent time on are actually good, and so if any of my readers know of good places that would pay for freelance writers, hit me up at theusernamewhichismine@gmail.com.

People buy stocks instead of ETFs because their values are different

I enjoy talking stocks, and whenever you hang around on the finance parts of the internet, you’ll inevitably run into the following sentiment:

Why are you even buying individual stocks? You should just buy a broad-market ETF. You’ll never beat the market so ETFs are the best and most reliable way to grow your money.

Bogleheads et al

I’ve written about the Efficient Market Hypothesis before and about the difficulties of stock picking. I understand and to an extent agree with the arguments that people in general cannot beat the market reliably over any significant length of time. Any good runs are transitory, purely luck based, and eventually fall back to earth (see $ARKK 2016-2021 and then 2021-today). But that isn’t the primary value most stick pickers are going for, they’re going for potential return not expected return.

When you buy a broad market ETF, what is your expected return? Well the ETF tracks the whole market and the market goes up 5-10% every year, so that’s the return you can expect. Some years you’re down 20% (like 2021), some years you’re up 30% (like 2019), but on average you get a 5-10% yearly return that will slowly grow your money. Slowly is the key word: investing in the stock market probably won’t make you rich, for the average American it won’t even make you a millionaire over the course of your entirely life, but it will give you a small leg up in the long run with very little risk to yourself.

So what’s the expected return for stock picking instead? Well, definitely less than 5-10%. The efficient market hypothesis and significant amounts of experimental data show that stock pickers broadly lose to the market over any significant timescale. They might be up 100% one year but are equally likely to lose it all the next. But the key here is that the expected return is not everyone’s return. The expected return is just the average of everyone’s return, and while on average people lose to the market there are always a lucky few that beat the market and some of them win big. There is at least one person out there who went all in on Tesla stock in 2013, sold in 2021 when Musk started acting weird, and made a truly life changing amount of money, and everyone who stock picks hopes to be like that person. Is it likely? Of course not, but it’s possible and that’s what keeps people going.

This may sound illogical to a bogglehead, and they may scoff and say the stock picker is no different that the casino gambler, but let’s try another example. What is the expected return of starting a small restaurant? Well, it takes a lot of capital investment to start a restaurant and 80% of them fail within the first 5 years of operation, so it’s safe to say that the expected return of a restaurants is actually negative. On average a person starting a restaurant will end up losing money, so are an restauranteurs as illogical as stock pickers? I’d argue no, the expected return isn’t as important to them as the potential return. A restaurant is an opportunity to make a life-changing amount of money, and while it’s clearly very uncommon, it happens often enough to continue enticing people to try it. The bogglehead could just as easily state that it’s more efficient for restauranteurs to not open up restaurants at all and they should instead invest in broad market ETFs, but if no one ever took risks like that then we’d never have new businesses at all.

Big gains require big risk, and I’d argue being content with your lot and investing like a bogglehead is no more “logical” than going all in on smart but high-risk plays, it’s simply a questions of values.

Amazon and PE

Conventional business indicators such as the price-earnings ratio, the price-to-book ratio, and discounted cash flows belong in the Bronze Age – so say the new economists. But if the old metrics don’t capture the potential of today’s fast-growth companies, some new formulas can.

PERManent Upside, WIRED Staff, February 2000

I think about the above quote a lot these day. At about the absolute peak of the dotcom bubble, there were writers and (supposedly) economists claiming that the foundation of the stock market had changed, and that what appeared to be overvalued tech stocks driven by computer-illiterate investors FOMO-ing into anything with a website were in fact some of the greatest stocks to own since sliced bread. PE, PB, DCF were useless in evaluating these stocks, they stood on their own through a new metric created just for them, PERM. No one knows, cares, or remembers what PERM stood for (you can read the linked article if you really want to), but it was supposed to prove that earnings weren’t important and that high PE stocks were still good deals. I think about this a lot because this is the same argument many have used on me regarding Amazon.

Amazon had a bad 2022, over the year it’s stock price cratered around 50% and it lost 1 trillion dollars in market cap. The old adage that “Amazon’s PE doesn’t matter” has seemed less and less true as it’s PE has gotten closer and closer to “normal.” Sure it’s still well above value stocks, even well above most tech stocks, but it’s not to far off from Walmart these days which would have been unthinkable just a few years ago. It may be that economic gravity is catching up to Amazon, and if so I’d like to share my theory as to why. Full disclosure, I did buy 10 shares of Amazon right after their latest stock split and have held them ever since. I’m down rather a lot on the investment and if what I’m about to say is accurate I’m soon to be down even more, so you can consider that data point as a hedge against my thesis and read on.

The conventional theory for why Amazon’s PE never mattered was that it invested almost every dollar of profit back into the business. By re-investing their profits rather than claiming them as earnings, Amazon avoided a lot of corporate taxes. And if Amazon’s reinvestments were wise, then the stockholders gained value tax-free rather than through taxable dividends. There’s also an argument that Amazon’s reinvestments were more efficient even outside of tax implications. Every dollar Amazon reinvested could create so much growth that it was better for an investor to let Amazon keep their money and grow than for an investor to demand Amazon hand money back to shareholders. When you look at what Amazon was investing in: cloud computing, content delivery, and an every increasing share of online shopping; this certainly seems to have been the case for the last decade or so, an investor gained more value by parking their money with Amazon than they would have parking their money with a company that handed earnings back to investors.

But perhaps something has changed, and changed drastically enough that Amazon’s PE lows won’t be temporary. Amazon’s revenue and earnings continue to grow year after year, but if its stock price continues to sink it’s PE may eventually reach downright normal levels. If that is the case then I think the reason why would be clear: investors no longer believe that a dollar re-invested by Amazon is worth quite so much more as it used to be. Amazon may be approaching the limits of its momentous growth, and may now start evolving into a “mature” company like Microsoft and Apple before it. In those cases a moderately high PE is still justified, I mean these are trillion-dollar tech companies, but they can’t be expected to continue their meteoric growth and so PEs in the 100s are no longer sensible. Amazon is famous for how much it re-invests, but the dollar amount of investment is less important that the future dollars that investment generates. In the past, Amazon’s future returns of ever re-invested dollar were great enough to justify a sky-high PE but that won’t last forever. Many companies that aren’t valued like Amazon re-invest a lot of their profits, the Red Queen Hypothesis makes as much sense in biology as it does in Economics “you have to run as fast as you can just to stand still.” Companies which re-invest a lot to maintain their dominance don’t necessarily get a premium over those that hand money back to shareholders but maintain dominance. And if Amazon reinvests a greater percent of its earnings vs Apple or Microsoft but doesn’t grow significantly faster than them, then it’s stock price shouldn’t command a premium either.

I think it’s possible that Amazon is indeed maturing into a company that will be valued by it’s PE just like all the other tech companies. That doesn’t mean it’s time to dump the stock, the revenue and earnings continue to grow and will probably catch up to the PE, or at least that’s just as likely as the PE falling to meet the revenue. Regardless of the mechanics, economic gravity will eventually catch up to Amazon just like it caught up to Tech stocks of the 2000s. Nothing is ever truly new.

Buses have only gotten worse during my adulthood

I’ve lived in cities my whole life and yet it seems like the bus systems in every city I’ve ever lived in have only gone downhill. When I first went to grad school, I used buses and trains to get around town to do my grocery shopping and whatnot. By the time I was graduating, the buses had all gotten so sketchy that I no longer used them. People smoked openly on them, there were always homeless people panhandling, and they just seemed a little too violent to be safe. I eventually left that city for my current one, and the buses are STILL crap but in another direction. They’re never on time, I’ve had multiple days where a bus just plain doesn’t show up, and now they’ve altered the route schedule to ensure that my bus MUST take a much longer time to reach it’s destination. When I started riding my route, I could get from A to B in 20 minutes give or take. They’ve now altered the route to make A to B take 30 minutes, and if traffic isn’t bad and the bus is a little early, the driver will stop on the side of the road to ensure it takes no less than 30 minutes.

I don’t know what buses have always been this bad, but it’s really putting me off public transportation in general. It’s even more galling when the cities I’ve lived in are demanding ever increasing funding for ever worsening service. At what point should the city cut its loses and say no, no new funding without fixing what you currently have. More money isn’t a cure all, countries other than mine have much better bus service at much lower cost, I know, I’ve been to them. The cities I’ve been to seem to have a cost disease, where they keep spending more and more to get worse and worse and the only conceivable cure is more money. It’s infuriating.

Small post: I’m currently drawn in my by own nostalgia

I got Christmas gifts from my friends last year, and near all of them gave me video games (which is exactly what I gave them, so neither of us can complain). And yet barely any of them have I installed and played, I’m finding myself more drawn in to the familiar comfort of old games I’ve played through a thousand times. I wonder if this is just a reaction to my current scenario, I’ve been very busy at work and haven’t had much time to sit down and get comfortable with new games. I hope this is just a phase I’m going through that won’t last, I don’t want to find myself stuck in a few games for the rest of time, but for right now I’m just sitting here content with what I have. I keep promising myself I’ll install and play my gifts, and I really hope I get the feeling to do so soon.

Science needs good communication, but it also needs basic literacy

I’m really bummed out today and this post will kind of be a rant. As with most biochemical scientists I have a lot of temperature-sensitive materials kept in a -80 degree freezer box. Pretty much all my work since I started this job is kept in that box, along with samples sent to me by collaborators. Well over the winter break, a certain someone (I won’t name who, but I know who) decided to clean out the freezer, and they apparently didn’t read MY INITIALS which were written on my box, so they thought my box belonged to someone else who no longer works here and they tossed it. All my research products, gone. Half my samples from collaborators, gone. My only solace is that I still have collaborator samples LEFT, at least I still have something kept in separate boxes only for organization reasons, but still the loss of all that work is really making me not want to do any more work today or maybe ever. And it isn’t even someone I know really well who did this, I don’t know if that makes it better or worse. It’s someone I know, I’ve been to lab parties with them, but I struggle to think of their face from memory.

I’ll need to take stock of how far this has set me back. I need to contact collaborators to get new samples if possible. I especially need to strongly remind them that this wasn’t MY fault, although I worry that a petty collaborator might be furious enough to break off contact over something like this and blame me anyway. Most of all I need to make a plan to go forward. I haven’t been the MOST successful at my craft, like I said previously I still don’t have an extraction protocol that works every time, but I need to find some way to do things after this. At least it’s the weekend tomorrow, I can discharge over the weekend and hope to come back with something, but I think today is a lost day for science. I just can’t get myself in the mood to do work after discovering this.

Why do we still not know what causes Alzheimer’s disease?

Between 1901 and 1906, Alois Alzheimer began collecting data on the disease that would eventually bear his name. A patient with memory deficiency was autopsied after her death and her brain was found to contain amyloid plaques and neurofibrillary tangles. Around a half century prior in 1861, Guillaume-Benjamin-Amand Duchenne had described a disease that would bear his name, a form of muscular dystrophy, and like Alzheimer he had patient samples for study. In the next century and more both diseases would be studied and reported on, Duschenne Muscular Dystrophy was eventually linked to a single protein called dystrophin, and a number of FDA-approved treatments exist which target dystrophin and improve patient outcomes. Alzheimer’s disease was also linked to a protein, the amyloid plaques found by Alois contained a protein called amyloid beta. But while both diseases seem to have known causes, treatments for Alzheimer’s disease remain ineffective. What’s more, there is a growing body of evidence that the amyloid beta hypothesis for Alzheimer’s disease is on shaky ground. How is it that more than a century of study has not allowed us to even understand Alzheimer’s disease?

First, it must be said that the amyloid beta (Aβ) hypothesis for Alzheimer’s Disease (AD) didn’t come out of nowhere. Not only were the amyloid plaques found in Alzheimer’s patients coming from Aβ, but genetic evidence showed that the mutations associated with AD all seemed to affect the Aβ pathway. If the diagnostic criteria for AD included Aβ, and genetic evidence supported a role for Aβ, it seemed Aβ must surely be the cause of the disease. And further biochemical evidence supported a role for Aβ, for example when Aβ was shown to cause neuronal cell death in cultured nerve cells. The Aβ hypothesis even connects well with other diseases, Aβ acts as an aggregating prion and aggregating prions are known to cause other neurodegenerative diseases such as Creutzfeldt-Jakob Disease and Kuru. Note that some biochemists say a protein is only a prion if it comes from the prion gene of the human body, but like champagne this definition is expanding. So the Aβ hypothesis isn’t a hypothesis without support, it has strong biochemical evidence at the genomic and proteomic level, and fits in well with other brain diseases. It can certainly be said that Aβ proponents have ignored or downplayed evidence against the Aβ hypothesis, but that behavior is common in all disciplines. Science advances one funeral at a time.

Second, it should be recognized that AD is a difficult disease to study involving a difficult organ to study. AD affects memory and behavior by affecting the brain, those are processes and an organ that are still very opaque to us in general let alone in the context of AD. So AD is a disease we don’t understand affecting processes we don’t understand in an organ we don’t understand. Maybe we should feel grateful we even have drug candidates to begin with?

To bring this back to my own work, let me give you an example of the very small problem I am working on and the difficulties I am facing in getting data. We have a theory that there are different subtypes of AD. There is the rapid-onset (r-AD) subtype and the slow-onset or traditional (t-AD) subtype. We believe that this difference may be structural in nature, that the proteins causing r-AD and t-AD are the same but that they have different shapes. To this end, I am studying the structural variations of sarkosyl-insoluble proteins from AD patients.

OK what does that mean? I start by requesting patient samples from deceased AD patients matching either the r-AD or t-AD subtype. This is difficult because not everyone really agrees on the diagnostic criteria of these two subtypes (already we have problems!). Then once I have a patient sample, I perform a sarkosyl extraction. Sarkosyl is just a detergent like the one you wash your clothes with. A detergent can dissolve some things (like the dirt on your clothes) while not dissolving other things (like the pigments coloring your clothes). Previous studies have shown that the proteins causing AD are sarkosyl insoluble, so just like how laundry detergent will wash away dirt while leaving behind pigments, I can use sarkosyl to wash away non-AD proteins and keep the AD-causing proteins. These sarkosyl insoluble proteins include Aβ, but also include things like Tau and alpha-synuclein which some people hypothesize are the true cause of AD. The sarkosyl extraction is difficult, and I seem to fail at it as often as I succeed, am I just bad at my job or is this all really really hard? I hope it’s the latter but you never know. Then, once I’ve extracted the material I need from the patient’s brain, I use a variety of techniques to try to test our theory about AD. I can see if the extracts from r-AD and t-AD brains have different affects on neuronal organoids (artificial culture of cells that resembles an organ, in this case a brain), I can image the extracts with electron microscopy, I can take structural measurements with NMR, and so far all the data is frustratingly vague. I haven’t been at this job super long, but I can tell you I am not finding the One True Cause of Alzheimer’s disease any time soon.

And I think my struggles are fairly representative of the AD-researching community at large, or at least the ones I’ve talked to. It’s a disease that can only be studied biochemically post-mortem, the samples you get are both very limited and highly variable, it’s hard to relate the biochemistry back to the behavior and memory because we don’t have very good theories about that stuff to begin with, and we’re trying to use all the latest and greatest techniques to study this but we’re still struggling to get strong evidence to support our theories. After a century and more of study, we still don’t seem to be anywhere close to curing Alzheimer’s, we can’t really treat it, and we barely understand it. It can be frustrating and difficult work

Driving in the rain SUCKS

I’m tired. A friend of mine transferred colleges over the winter break, and after his other friend with a pickup truck got sick it fell to me to get him to his new town so he could move into his apartment in time for the Spring Semester. And DAMN did it rain on us! Sheets of water like rivers falling out of the sky! Cars on the highway not giving a damn! I felt even if I were to turn on my high beams on I would barely see the next car in front of me! The three hour round trip was a hell of a journey that I do not want to repeat, but I’m glad at least that my friend is safe in his new apartment.

Preemptively declaring victory on the “will Twitter die” prediction

It’s a new year, and with twitter still operating as usual I’d like to preemptively declare victory on my prediction that Twitter will not die in the next year. I’ll still have a full update on the 1 year anniversary of that post, but I think we have had enough time to at least take stock of things.

First I’d like to lay some ground rules. There was definitely a lot of misplaced hyperbole surrounding Elon Musk’s purchase of twitter. A number of articles about how the platform was dying, or unsafe. Some semi-major journalism outlets like CBS news even left twitter (for about a day, before rejoining). But a common defense mechanism for people who are publicly wrong is the “I was only joking” defense aka Schrodinger’s douchebag. I want to be clear that a lot of organizations like CBS were definitely acting like twitter would implode any minute, and so it’s important to note why these people were very wrong and what we can learn from this.

First note: is twitter dying because advertisers are fleeing it? Hard to say because advertisers are fleeing all companies right now. Advertisers fleeing Facebook (in the midst of a pandemic-related recession) didn’t stop that company from reaching a valuation of 1 trillion not long after, so stories about certain advertisers fleeing twitter aren’t really informative. At any time, with any company, you can always find some advertisers fleeing a platform, sometimes it says a lot more about the advertisers (losing money, can’t afford) than the platform (still growing). Considering the fact that the US economy is still not doing good (growth is expected to be zero or negative in 2023), then it’s natural that advertisers are fleeing twitter just as they are fleeing google advertisement. So without evidence that more advertisers are fleeing Twitter than are currently fleeing google and Facebook/Meta, then we can’t declare the death of twitter any more than we can declare the death of the other tech giants.

Second note: did twitter’s codebase collapse? Not at all, it still works fine. In the wake of thousands of firings of software engineers, some asked whether the software that underpins twitter wouldn’t collapse soon after. This seems like a farcical suggestion to me, a well run company should only put software into production if the code is ready for prime-time. If the code needs daily maintenance to sustain basic functionality, then it should be in testing not in the hands of users. The suggestion that twitter would collapse soon after it’s exodus of engineers was implicitly a suggestion that the company was a dumpster fire of near-unworkable code prior to Musk’s purchase. More puzzling was that it was former engineers making these claims. I get that they were unhappy to lose their jobs and there was likely a lot of emotions running high, but if you’re implying that the code you previously were responsible for was a dumpster fire that barely hung together, then I don’t know what company would want to hire you afterwards. Most tech companies try to have higher standards.

It’s too early to tell if twitter truly is dying, we’ll have better data next year on user totals and engagement. Certainly Musk’s freewheeling personality could be scaring off both advertisers and users, but some could also be drawn to it like a car crash. Whatever the eventual result, it’s clear that the short-term predictions of doom were widely off the mark (just as I said previously)

Science Update: why is Jose Romero spreading vaccine disinformation?

In November, the CDC declared it would expand wastewater testing for the detection of polio in America. The polio virus has unfortunately returned to American shores, decades after we had thought it eradicated. Jose Romero is CDC NCIRD (National Center for Immunization and Respiratory Diseases) director, and had this to say:

“When will we know that we’re out of the woods? When we get our vaccine rates at the national level — 93 or 94 percent — to have herd immunity in the community,” Romero said, referring to when enough individuals have been vaccinated so their collective immunity prevents the virus from circulating in that population

Via Washington Post

A fine sentiment, and a call for greater vaccination. Which would be all well and good if Romero’s statement on vaccines causing herd immunity wasn’t total disinformation. Before I get to why this statement is false, I first want to discuss why I’m writing this and why this is important. American public health has taken a blow over the past several years and in many ways this can be traced back to people’s growing distrust of public health officials. The causes for this distrust are varied, but because of the mistrust it is imperative that public health officials deliver accurate and relevant information to the public to help regain the public’s trust. I find it hard to believe that Jose Romero, who is an MD and the CDC NCIRD director, does not know or realize that his statement is false. I find it more likely that he is telling a public health white lie of the type that has become all too common, saying something false in order to encourage behavior he’d like to see. In this case, he wants to encourage more vaccine uptake, so instead of saying the truth (that the American polio vaccine only protects the recipient from paralytic polio and does not promote herd immunity or reduce community spread), he is saying something that he thinks will get more unvaccinated people to want to get the vaccine. The problem is that what he’s saying is wrong, actual scientists can tell us he’s wrong, and agenda-driven actors can then use his wrongness to discredit whatever else he is trying to say.

It you want two MDs to explain why Jose is wrong, This Week in Virology has you covered, but I will explain as best I can.

The polio virus is known to cause paralysis, but this is a secondary effect, the virus primarily infects the intestines. About 90% of people infected with polio will develop either no symptoms, or mild symptoms (fatigue, fever, diarrhea etc) but not paralysis. In 1% of polio infection the virus then spreads throughout the central nervous system, causing damage to nerve cells which leads to muscle paralysis. There are two main classes of vaccine that can protect against polio, the oral polio vaccine (OPM) and the inactivated poliovirus vaccine (IPV). It’s important to note that America only uses the IPV. The OPM contains a weakened form of the virus which is capable of replicating, and because it can replicate this weakened virus can then be passed on to others, infecting them as well and potentially causing paralysis in them. However this vaccine allows the entire immune system to come in contact with the virus and build defenses against it. The IPV does not contain a virus, only pieces of the virus are injected into the patient. Because of this, the virus cannot replicate and thus cannot be spread to others, but it also does not immunize as strongly as the OPM. So what if someone who received the IPV comes into contact with poliovirus? They are not so strongly immunized, so the virus can still replicate inside them and be excreted in the stool. But they are immunized enough to be protected against the major polio symptoms especially paralysis.

So to recap: the OPM is effective at preventing people from acquiring and spreading polio, but because it contains an actual virus, there are major downsides that must be considered. The IPV is not effective at preventing people from acquiring and spreading polio, but it prevents all the worst symptoms and has less downsides to its use. America only uses the IPV, so increasing our vaccination uptake will not prevent the acquiring or spreading of poliovirus and will not lead to herd immunity. The vaccine used in America only prevents people from getting paralyzed if they get infected with polio.

I think Jose Romero (or his staff) must know this, but I think they (like too many public health officials) are trying to influence behavior by shading the truth. This is a pattern of behavior that Josh Barro has also chronicled, dishonest framing has been used to obscure the truth for ostensibly noble ends. But lying doesn’t help, when people realize you’ve lied they become far less likely to trust you later. And for our nation’s public health community to continue this further decline in trust could prove disastrous.