WEBVTT - Here's How the New Weight Loss Drugs Could Change Everything 0:00:10.119 --> 0:00:13.400 Hello, and welcome to another episode of the All Thoughts Podcast. 0:00:13.520 --> 0:00:14.880 I'm Tracy Alloway. 0:00:14.560 --> 0:00:15.720 And I'm Joe Wisenthal. 0:00:16.079 --> 0:00:18.520 Joe, would you ever go on ozembic? 0:00:19.000 --> 0:00:19.160 Oh? 0:00:19.239 --> 0:00:20.040 Yeah, definitely? 0:00:20.280 --> 0:00:21.360 Yeah? 0:00:21.400 --> 0:00:23.720 Really well yeah, well not. This seems fun. 0:00:23.880 --> 0:00:27.440 It reduces your appetite, probably lose weight. It seems like 0:00:27.480 --> 0:00:29.760 it also has a bunch of other I keep seeing 0:00:29.760 --> 0:00:31.720 these other things, like it's good for like, you know, 0:00:32.159 --> 0:00:35.639 impulse control and all kinds of positive things that, yeah, 0:00:35.640 --> 0:00:35.880 why not. 0:00:37.320 --> 0:00:39.879 Yeah, it's supposed to be good for impulses and addiction. 0:00:40.240 --> 0:00:42.560 And also I think there's some new stat out saying 0:00:42.560 --> 0:00:45.240 that it reduces the risk of heart attack and stroke 0:00:45.280 --> 0:00:48.120 by twenty percent. Well, anyway, who would you? 0:00:49.240 --> 0:00:49.680 I think? 0:00:50.360 --> 0:00:54.120 Yes, however, I would definitely wait for the price to 0:00:54.160 --> 0:00:57.400 come down a little bit and maybe for more of 0:00:57.440 --> 0:01:00.680 the side effects to become a parent, but I'm very 0:01:00.720 --> 0:01:04.280 cautious with these sorts of medical breakthroughs. 0:01:04.520 --> 0:01:04.759 Uh. 0:01:04.840 --> 0:01:07.200 Yeah, I have to. I feel like my like, I 0:01:07.200 --> 0:01:07.800 don't know that. 0:01:07.840 --> 0:01:10.520 Much about all these drugs like ozimpic and mcgovey and 0:01:10.560 --> 0:01:13.760 the other golp ones, but they seem pretty great, and 0:01:13.800 --> 0:01:16.920 I'm just like, yeah, upward and onward. The March of 0:01:17.000 --> 0:01:20.280 progress science. I love it, no, but I actually do 0:01:20.360 --> 0:01:22.679 think like it is. Something I've been thinking about is 0:01:22.720 --> 0:01:26.399 like people are so skeptical of even the possibility of 0:01:26.480 --> 0:01:28.080 the existence of a wonder drug. 0:01:28.400 --> 0:01:29.520 The people are like, Oh, it's. 0:01:29.360 --> 0:01:31.039 Going to do this, it's going to do this, it's 0:01:31.040 --> 0:01:32.880 going to be bad, it's going to reverse, it's going 0:01:32.920 --> 0:01:35.120 to and maybe that's possible. 0:01:35.440 --> 0:01:37.039 But what if it really is a wonder drug? 0:01:37.200 --> 0:01:39.680 Well exactly, And I think it opens up a ton 0:01:39.840 --> 0:01:44.280 of interesting questions, specifically about what it means for wider 0:01:44.400 --> 0:01:48.560 society and the wider economy. When we know that obesity 0:01:48.960 --> 0:01:53.280 and diseases like diabetes have been this huge weight on 0:01:53.600 --> 0:01:57.240 both the socio economy and the healthcare industry. 0:01:57.560 --> 0:02:02.200 Obesity itself is like just this gigantic economic force. It's 0:02:02.240 --> 0:02:05.480 a business force. There are businesses that thrive on how 0:02:05.560 --> 0:02:07.920 much people like to eat unhealthy foods. 0:02:07.920 --> 0:02:09.919 They're huge costs to ensures. 0:02:10.000 --> 0:02:13.720 There are other second order effects of related to injuries 0:02:13.760 --> 0:02:17.800 and heart complications and so forth. It's such a modern 0:02:17.880 --> 0:02:21.440 important phenomenon that we're there to be and maybe it 0:02:21.480 --> 0:02:22.520 kind of looks like there is, but. 0:02:22.480 --> 0:02:23.360 We're there to be. 0:02:23.440 --> 0:02:27.520 This sort of like straightforward way to reduce obesity. It 0:02:27.520 --> 0:02:29.600 seems like the implications would be huge. 0:02:29.360 --> 0:02:32.600 Right, And I keep getting visions of like Star Trek 0:02:32.680 --> 0:02:34.920 in my head where everyone is kind of slim and 0:02:35.000 --> 0:02:38.920 dressed in tracks great and very athletically capable, and we 0:02:39.000 --> 0:02:41.600 all just wander around spaceships. So that sounds great. 0:02:41.760 --> 0:02:41.919 Well. 0:02:41.919 --> 0:02:44.160 Anyway, on a serious note, I think we need to 0:02:44.200 --> 0:02:48.360 dive into these new sets of drugs. What exactly are they, 0:02:48.560 --> 0:02:53.240 how do they work, and more importantly, more interestingly, what 0:02:53.400 --> 0:02:56.480 do they actually mean for the wider economy and the 0:02:56.520 --> 0:02:57.400 business environment. 0:02:58.040 --> 0:03:00.360 So many I'm so glad we're doing it because it 0:03:00.360 --> 0:03:03.799 does feel like beyond just the companies selling these drugs, 0:03:03.800 --> 0:03:06.200 which we know have been taken off. We're recording this 0:03:06.280 --> 0:03:10.079 on August ninth. Just yesterday Nova and Nordis, the Danish company, 0:03:10.200 --> 0:03:13.400 soared because they had another test showing that one of 0:03:13.400 --> 0:03:16.680 these drugs was very good for fighting heart disease. So 0:03:16.720 --> 0:03:19.880 we know that there's like the interest in the vendors 0:03:19.919 --> 0:03:22.280 the sellers of these drugs. But again, what does it 0:03:22.320 --> 0:03:24.760 mean all these second and third order effects if they 0:03:25.000 --> 0:03:27.240 really become extremely widespread and it kind of looks like 0:03:27.240 --> 0:03:29.679 they're on the trajectory feels very unexplored. 0:03:29.800 --> 0:03:33.120 Yep, So let's dive into those second order effects of 0:03:33.200 --> 0:03:36.160 miracle weight loss drugs. A fun episode ahead. We have 0:03:36.640 --> 0:03:39.120 really the perfect guest. We're going to be speaking with 0:03:39.200 --> 0:03:43.640 James Van Galen of Citrinidus Capital also known as Citrini 0:03:43.840 --> 0:03:46.200 on Twitter. So, James, thank you so much for coming on. 0:03:46.200 --> 0:03:48.640 All thoughts, Hi, Tracy, Joe, thanks for having me. 0:03:49.080 --> 0:03:52.880 So, James, from what I remember, you actually have something 0:03:52.920 --> 0:03:54.680 of a medical background. Is that right? 0:03:55.680 --> 0:03:57.880 Yeah? I worked my way through undergrad as a paramedic 0:03:58.080 --> 0:04:00.600 for a while in Bridgeport, Connecticut, and then when I 0:04:00.600 --> 0:04:04.920 transferred to UCLA, I worked as a paramedic in Compton, California. 0:04:05.000 --> 0:04:07.760 So I'm not a stranger to the medical field. Then 0:04:08.000 --> 0:04:11.840 for about four years I started what co founded one 0:04:11.880 --> 0:04:16.200 of Connecticut's first medical marijuana dispensaries. So I definitely am 0:04:16.240 --> 0:04:18.839 not a stranger to the medical field. Now I do 0:04:18.880 --> 0:04:21.000 the hedge fun thing, and it comes in andy once 0:04:21.040 --> 0:04:21.720 in a while. 0:04:22.600 --> 0:04:27.360 Investing in medical technology or sorry, you know, I or biotech. 0:04:27.400 --> 0:04:30.039 Often it seems like the sort of like Roulette wheel, 0:04:30.040 --> 0:04:33.000 And I'm always skeptical that anyone who is like not 0:04:33.120 --> 0:04:38.760 a scientist can actually have informed insights on new medicines 0:04:38.800 --> 0:04:40.919 and how big they could get, et cetera. Can you 0:04:40.960 --> 0:04:43.320 just sort of like give your overview of like how 0:04:43.360 --> 0:04:45.280 do you even like think about these things? Like if 0:04:45.320 --> 0:04:47.880 you're not like a scientist, how do you even begin 0:04:47.960 --> 0:04:50.520 to wrap your head around like how do these drugs work? 0:04:50.560 --> 0:04:52.640 And how big they could be? And which ones I 0:04:52.680 --> 0:04:55.000 have more potential than others? Like what's your like framework 0:04:55.040 --> 0:04:57.800 for like sort of just like evaluating some breakthrough in 0:04:57.880 --> 0:04:58.440 the first place. 0:04:59.360 --> 0:05:02.360 I mean, I don't do a ton of like biopharma investing. 0:05:02.400 --> 0:05:04.560 I'm not a scientist, but I do have a bus 0:05:04.920 --> 0:05:08.080 network of channel checks and I'm a big proponent of 0:05:08.200 --> 0:05:11.280 basically if you don't know something, ask you know, and 0:05:11.480 --> 0:05:15.880 we are so so I am. You know, I'm always 0:05:15.920 --> 0:05:18.040 bothering them, and you know I'll cost me as a 0:05:18.040 --> 0:05:20.800 couple of dinners or something. And but you know, I 0:05:21.520 --> 0:05:25.040 don't do much, if any investing in companies that are 0:05:25.080 --> 0:05:27.320 still clinical stage, right, And you know, a lot of 0:05:27.360 --> 0:05:29.920 my investing is kind of thematic investing. It's focused on 0:05:29.960 --> 0:05:33.040 these kind of paradigm shifts, these mega trends essentially, and 0:05:33.480 --> 0:05:36.160 when you see something like this, right, you know, all 0:05:36.200 --> 0:05:40.200 the feedback from channel checks is good, and it's something 0:05:40.240 --> 0:05:42.520 that we kind of needed as a you know, as 0:05:42.560 --> 0:05:46.279 a in developed markets at least for decades, right, And 0:05:47.320 --> 0:05:50.839 you just see the kind of behavioral incentives that exist 0:05:50.880 --> 0:05:54.039 surrounding it. And I always come back to basically you 0:05:54.080 --> 0:05:57.120 look at like viagra in the nineties, and you know, 0:05:57.160 --> 0:05:59.360 you did not have to be a doctor to kind 0:05:59.400 --> 0:06:03.800 of see Pfiser just killing it, you know, just doing 0:06:04.320 --> 0:06:07.599 amazingly with this drug that solved the problem that people 0:06:07.600 --> 0:06:09.799 had that you know, needed to be fixed and it worked. 0:06:09.880 --> 0:06:11.960 And you know, honestly, that might be the reason that 0:06:12.000 --> 0:06:15.320 most of us know who Phiser is, right. So you know, 0:06:15.520 --> 0:06:18.520 whether it's buying Maderna when they're developing a co vaccine, 0:06:18.600 --> 0:06:20.680 or buying Eli Lilly when they're developing, you know, a 0:06:20.680 --> 0:06:23.640 fat vaccine, or a Pfiser with Bager in the nineties, 0:06:23.800 --> 0:06:26.920 it all falls under the mega trend looking for kind 0:06:26.960 --> 0:06:28.760 of these paradigm thematic shifts. 0:06:29.200 --> 0:06:32.919 I think people forget nowadays that viagra was initially developed 0:06:32.960 --> 0:06:36.400 for something totally different to what it's used, and that 0:06:36.640 --> 0:06:39.720 happened to be a sort of happy side effect of 0:06:39.760 --> 0:06:42.000 the medication. I guess and then it became known for that. 0:06:42.400 --> 0:06:45.400 But just on this note, let me ask the basic question, 0:06:45.600 --> 0:06:49.839 So how did these drugs gop one I'm not even 0:06:49.839 --> 0:06:52.440 sure what that stands for, but how did these come 0:06:52.600 --> 0:06:56.200 into being? And how are they starting to spread through 0:06:56.200 --> 0:07:00.000 the market such that I meet vcs who will openly 0:07:00.120 --> 0:07:02.640 say that they're on a zempic and I'm pretty sure 0:07:02.680 --> 0:07:05.320 they don't actually have diabetes. 0:07:05.520 --> 0:07:08.480 You know. So GOLP one stands for glucagon like peptide, 0:07:08.760 --> 0:07:10.040 not to get I don't want to get like two 0:07:10.040 --> 0:07:14.480 scientific but basically, the peptide helps kind of prime insulin release, right. 0:07:14.560 --> 0:07:17.240 It allows the body to absorb glucose after a meal, 0:07:17.520 --> 0:07:19.560 and you have specific cells in your pancreas that can 0:07:19.640 --> 0:07:23.320 recognize GLP one through what molecules called receptors. Right. So 0:07:24.640 --> 0:07:27.840 essentially we've been looking into these drugs you know, called peptider. 0:07:28.160 --> 0:07:29.960 The medical field has been looking into them, you know, 0:07:30.040 --> 0:07:33.160 since the seventies. And GLP one's primary benefit was the 0:07:33.160 --> 0:07:35.440 fact that it was able to produce blood glucose levels 0:07:35.600 --> 0:07:38.680 via insulin release, which is you know, very desirable in 0:07:38.720 --> 0:07:42.880 a patient with diabetes. And the thing was the you know, 0:07:42.960 --> 0:07:45.640 when it comes to peptides. Normally, you're trying to mimic 0:07:45.880 --> 0:07:48.520 the peptide that your own body produces. So the actual 0:07:48.560 --> 0:07:52.480 molecule glucagon like peptide one is only to able to 0:07:52.560 --> 0:07:56.560 create these effects for a very short time span. And 0:07:56.800 --> 0:08:03.080 so what these genius anders discovered was that they can 0:08:03.240 --> 0:08:07.080 essentially mimic these hormones and have these molecules that bind 0:08:07.080 --> 0:08:09.960 to the receptors they're called agonists, right, and that can 0:08:10.000 --> 0:08:12.800 create an effect that lasts, you know, four hours or 0:08:12.800 --> 0:08:15.960 even weeks. And that was basically the basis of the 0:08:16.000 --> 0:08:21.240 initial development and the impetus for it was essentially to 0:08:21.840 --> 0:08:24.000 go after diabetes. Right. If you have something that can 0:08:24.080 --> 0:08:28.080 regulate glucose that is possibly dysregulated in a patient with diabetes, 0:08:28.720 --> 0:08:34.360 that's kind of something that seems desirable, right. So they 0:08:34.360 --> 0:08:37.160 were kind of predicted to also prolong this feeling of 0:08:37.200 --> 0:08:42.640 you know, fullness and slow gastric emptying. And they also 0:08:42.679 --> 0:08:45.920 provide a variety effects in the brain. And these drugs 0:08:46.000 --> 0:08:49.920 do cross the blood brain barrier. And the first GLP 0:08:50.040 --> 0:08:53.679 one drug that was approved by the FDA was Exenotide. 0:08:53.760 --> 0:08:56.959 It was marketed under the name Bieta. So Bieta was 0:08:56.960 --> 0:09:00.160 approved in two thousand and five, right, and primarily be 0:09:00.280 --> 0:09:04.360 used in type two diabetes. And while you have something 0:09:04.400 --> 0:09:07.880 like semic glutide right now, which is ozembic generic name frozenpic, 0:09:08.600 --> 0:09:12.560 and then Munjaro, which is Lily's drug. Ters Appetite is 0:09:12.559 --> 0:09:16.680 the generic fan. And the thing is once you have 0:09:16.760 --> 0:09:20.079 a class of drugs, but you can kind of anticipate 0:09:20.679 --> 0:09:23.120 what the side effect profile will be. It's not necessarily 0:09:23.200 --> 0:09:25.840 that you can, you know, anticipate every single side effect, 0:09:25.880 --> 0:09:27.720 but you kind of you get an idea of the 0:09:27.720 --> 0:09:31.040 structural activity relationship. You get an idea of, you know, 0:09:31.120 --> 0:09:34.400 this dose dependent curve and where side effects start becoming apparent. 0:09:34.559 --> 0:09:38.400 And so with GLP ones they have side effects, right, 0:09:38.440 --> 0:09:42.120 they have some gi side effects, and these GLP one 0:09:42.120 --> 0:09:45.160 receptor agonists, like semic glutide, they can be pretty bad. 0:09:46.200 --> 0:09:50.880 But what Lily saw was essentially it was decided that 0:09:50.880 --> 0:09:53.959 they would try it to go after different receptors in 0:09:54.120 --> 0:09:56.800 the same system, right, so they kind of get this. 0:09:56.960 --> 0:10:00.080 It's got like Ter's Appetite. Munjaro is basically a a 0:10:00.200 --> 0:10:06.280 dual GLP one receptor and then GIP receptor agonists. So 0:10:06.559 --> 0:10:09.640 the way that that works is the GIP activity allows 0:10:09.679 --> 0:10:13.520 you to take a higher dose before experiencing the side effects, 0:10:13.760 --> 0:10:17.160 the GI side effects, and we also kind of know 0:10:17.280 --> 0:10:19.920 you know these since these drugs, you know, Trulicity was 0:10:19.920 --> 0:10:22.040 a big one that it was approven I think twenty 0:10:22.120 --> 0:10:25.320 fourteen for type two diabetes. It saw very wide use. 0:10:25.360 --> 0:10:28.719 So when you encounter someone and they're like, oh, you know, no, 0:10:28.880 --> 0:10:30.680 for sure, these drugs are going to aunt your insides, 0:10:30.720 --> 0:10:32.640 you know, like I don't. I don't blame them for 0:10:32.760 --> 0:10:35.040 that because if you look at the history of weight 0:10:35.040 --> 0:10:39.360 loss medication, you think Fenn Fenn, right, which like basically 0:10:39.400 --> 0:10:42.679 melted your heart. Then you know vermon event, which was 0:10:42.720 --> 0:10:46.080 like this genius invention where the scientists were like, well, 0:10:46.480 --> 0:10:49.840 you know the cannabinoid receptors basically the receptors that THHC 0:10:49.920 --> 0:10:52.200 act on, those make you hungry, So if we block 0:10:52.280 --> 0:10:55.240 those receptors, then it should make you not hungry. And 0:10:55.280 --> 0:10:57.920 it did. But you know what else the cannabinoid receptors 0:10:58.000 --> 0:11:01.160 make you is happy. So I don't know how they 0:11:01.160 --> 0:11:03.080 didn't see it as coming, but it made people very 0:11:03.120 --> 0:11:05.960 sad and increase the likelihood that they would commit suicide. 0:11:06.320 --> 0:11:08.679 And that so that drug was pulled very quickly, and 0:11:08.880 --> 0:11:10.680 you know, you kind of look at the pass of 0:11:10.720 --> 0:11:13.440 the weight loss industry. People take you know, tapeworm pills 0:11:13.480 --> 0:11:18.240 and just doing absolutely insane things, and it's kind of like, Okay, 0:11:18.280 --> 0:11:21.840 now you have this drug and the absolute worst concern, 0:11:21.880 --> 0:11:24.200 you know that there's a warning on the FDA label 0:11:24.320 --> 0:11:27.440 is that it may you know, it may result in 0:11:28.120 --> 0:11:31.200 thyroid cancer. But the thing is the only time that 0:11:31.200 --> 0:11:33.440 that's ever been observed with these gop one drugs is 0:11:33.440 --> 0:11:36.080 in mice. And the thing about mice is when you're 0:11:36.080 --> 0:11:38.320 doing a trial with a mouse, the mouse is not 0:11:38.360 --> 0:11:41.640 going to tell you I can't handle these side effects anymore, 0:11:41.640 --> 0:11:44.400 I'm going to stop taking the injection. Right, No mice 0:11:44.520 --> 0:11:48.680 drop out of trial studies. So what happens is, you know, 0:11:48.800 --> 0:11:51.720 like the if you were to take the equivalent dose 0:11:51.800 --> 0:11:55.920 that caused you know, these endoprin cancers in mice, before 0:11:55.960 --> 0:11:58.920 you reach that point, you would be so sick to 0:11:58.960 --> 0:12:01.880 the level of not being able to function. And it 0:12:01.920 --> 0:12:04.280 is so the dose was much much higher, and that, 0:12:04.360 --> 0:12:07.680 you know, the it has not been observed in humans. 0:12:07.880 --> 0:12:11.640 And the other thing is this is probably a little controversial, 0:12:11.640 --> 0:12:16.000 but the fact is, like obesity is devastating, right, it 0:12:16.080 --> 0:12:19.280 is absolutely terrible the way that increases mortality. I mean, 0:12:20.240 --> 0:12:23.520 I'm going to drop some statistics that Lily dropped on 0:12:23.520 --> 0:12:25.480 an earnings call, which is that you know, there are 0:12:25.520 --> 0:12:28.840 two hundred and thirty six OBC related health conditions. Type 0:12:28.880 --> 0:12:31.320 two diabetes risk is increased by two hundred and forty 0:12:31.320 --> 0:12:33.839 three percent in people with obesity, heart disease by sixty 0:12:33.920 --> 0:12:36.720 nine percent, high blood pressure by one hundred and thirteen percent, 0:12:36.880 --> 0:12:41.520 high cholesterol by seventy four percent. And the contribution to 0:12:41.559 --> 0:12:46.199 all course call all cause mortality is so significant that essentially, 0:12:46.280 --> 0:12:50.440 if I had a drug that would again this has 0:12:50.480 --> 0:12:53.880 never been observed in humans, It's probably not going to 0:12:53.920 --> 0:12:56.480 be because of the relationship that I described with the dose. 0:12:56.600 --> 0:12:59.360 But let's say I had a drug that one hundred percent, 0:12:59.400 --> 0:13:01.559 no matter what, forty years you're going to develop that 0:13:01.600 --> 0:13:04.960 word cancer from me. Even if that was the case, 0:13:05.640 --> 0:13:07.960 if it also one hundred percent of the time made 0:13:07.960 --> 0:13:10.920 you not opdes anymore, the net effect on your life 0:13:10.960 --> 0:13:12.440 expectancy would still be positive. 0:13:30.480 --> 0:13:33.640 You know, you mentioned in the beginning that you as 0:13:33.679 --> 0:13:36.800 an investor, you like to think about people called paradigm 0:13:36.840 --> 0:13:40.720 shifts or mega trends and so forth, and one of 0:13:40.760 --> 0:13:43.360 the things that thinking about it in this context, and 0:13:43.400 --> 0:13:46.160 I think there is a very good argument. I'm basically 0:13:46.280 --> 0:13:49.640 sold that the rise of these drugs will constitute a 0:13:49.679 --> 0:13:51.800 paradigm shift or a mega trend or something like that, 0:13:51.880 --> 0:13:53.840 and I feel like many people buy that. But the 0:13:53.880 --> 0:13:57.640 other thing is that like betting on mega trend often 0:13:57.760 --> 0:13:59.600 is not trivial in terms of even if you could 0:13:59.600 --> 0:14:01.720 predict the trend, you might not know what to invest in. 0:14:02.160 --> 0:14:05.240 And so, you know, a good example might be say 0:14:05.320 --> 0:14:08.240 like the rise of Chinese industry or something like that 0:14:08.320 --> 0:14:10.320 over in the you know, in the twenty first century, 0:14:10.400 --> 0:14:13.360 since it's entry into the WTO. And it's not like 0:14:13.440 --> 0:14:15.920 I don't think like buying like Chinese stocks have like 0:14:16.000 --> 0:14:19.480 been like some like extraordinary winner certainly like long stretches 0:14:19.520 --> 0:14:22.280 of time where that doesn't work. So like, what's the 0:14:22.320 --> 0:14:28.160 next step from identifying mega trend to then thinking about, okay, 0:14:28.360 --> 0:14:31.360 these will be actual winners as public market investments. 0:14:32.200 --> 0:14:35.000 Well, let me talk a little bit about hype, right, 0:14:35.080 --> 0:14:38.600 You just had Dan Lobe and talking about how it's 0:14:38.720 --> 0:14:41.520 more important to monitor you know, Reddit boards than it 0:14:41.600 --> 0:14:42.680 is to monitor fund. 0:14:44.080 --> 0:14:48.120 Baby Tracy's Tracy's message in her bloombergs. 0:14:48.160 --> 0:14:50.160 Tracy's ready to ready to spend up a fun that 0:14:50.200 --> 0:14:52.720 takes advantage of that. I think she's very proud of 0:14:52.720 --> 0:14:54.760 the redd investors. What was that the guy in the 0:14:54.760 --> 0:14:56.480 basement has the edge If that's the case. 0:14:56.600 --> 0:14:59.280 Yeah, well it's all about the story, all about the narrative, right, 0:14:59.320 --> 0:15:02.440 and the guy reading Reddit might have a better handle 0:15:02.480 --> 0:15:02.760 on that. 0:15:03.240 --> 0:15:05.800 But go ahead, right, this kind of you know, the 0:15:05.920 --> 0:15:09.240 metic investing. So yeah, you guys, ever heard of the 0:15:09.240 --> 0:15:11.960 Gardner hype cycle? Yeah? For those who haven't, the way 0:15:11.960 --> 0:15:14.200 that it looks is you have this kind of parabolic 0:15:14.280 --> 0:15:17.840 rise between the technology trigger and then the peak of 0:15:17.880 --> 0:15:23.840 inflated expectations, and kind of the axiomatic way to give 0:15:23.880 --> 0:15:26.360 an example of this would be the dot com bubble. Right. 0:15:26.360 --> 0:15:29.400 You have the technology trigger, which is the Internet, and 0:15:29.440 --> 0:15:31.560 then you it kind of goes parabolic all the way 0:15:31.640 --> 0:15:34.080 up to the peak of inflated expectations, which would probably 0:15:34.080 --> 0:15:36.640 be you know, in nineteen ninety nine pets dot com 0:15:36.680 --> 0:15:40.720 type stuff where the things that are happening are absolutely ridiculous, right, 0:15:40.800 --> 0:15:44.600 the forecasts are insane. And the thing about a mega 0:15:44.640 --> 0:15:48.280 trend or you know, a theme that is persistent, is 0:15:48.680 --> 0:15:51.080 it doesn't go unnoticed for very long. It can be 0:15:51.120 --> 0:15:53.360 a significant amount of time. But you know, you speak 0:15:53.400 --> 0:15:55.560 about like Chinese industry in the twenty first century, you know, 0:15:55.600 --> 0:15:58.640 like there was a period of time where you could 0:15:58.640 --> 0:16:01.200 have been early on that and you could have invested 0:16:01.200 --> 0:16:03.040 and made excellent returns that you know, the peak of 0:16:03.080 --> 0:16:07.440 inflated expectations, and then uh kind of exited before I 0:16:07.440 --> 0:16:11.160 guess I think maybe there was kind of a byphasics, 0:16:11.200 --> 0:16:13.120 so maybe it would have been the Asian currency crisis. 0:16:13.160 --> 0:16:15.840 But the then what happens is you get this trophic 0:16:15.880 --> 0:16:19.880 disillusionment right where it's like this technology isn't real. Everything 0:16:20.000 --> 0:16:23.200 is kind of hyped up. It was all bs whatever. Right, 0:16:23.200 --> 0:16:26.000 it's a bubble, and that's exactly it was a bubble. 0:16:26.120 --> 0:16:27.800 And then you get this well, you know, the thing 0:16:28.200 --> 0:16:30.760 funny thing is people say it's a bubble while it's 0:16:30.800 --> 0:16:33.720 going up, which is kind of like when people say, 0:16:33.800 --> 0:16:35.520 you know, like, okay. 0:16:35.080 --> 0:16:39.040 This is the difference between a journal instor just a 0:16:39.080 --> 0:16:40.720 bu blah blah blah blah, and then other people are. 0:16:40.760 --> 0:16:41.520 Making a for chane. 0:16:41.640 --> 0:16:43.960 It's like right, like you know, like this is why 0:16:44.360 --> 0:16:47.000 no reporter should ever should ever get into trading. 0:16:48.960 --> 0:16:51.080 I mean, you know, like how long was you know, 0:16:51.200 --> 0:16:54.120 Bitcoin had a you know, awful year last year, but 0:16:54.360 --> 0:16:57.360 like how long was it going up for before? You know, 0:16:57.400 --> 0:16:59.760 like obviously it was a bubble. But like, you know, 0:16:59.760 --> 0:17:02.080 that doesn't mean that you have to like be like 0:17:02.160 --> 0:17:04.399 a monk about it. You don't have to have this 0:17:04.480 --> 0:17:07.760 monastic view where God forbid I benefit from a bubble. 0:17:07.800 --> 0:17:10.719 You know, those people are wrong. Who cares? So anyway, 0:17:10.720 --> 0:17:13.400 you get to kind of this trave disillusionment. And then 0:17:13.440 --> 0:17:16.000 the next phase is kind of the slope of enlightenment 0:17:16.080 --> 0:17:18.679 where you know, you borrow a phrase from the VCS, 0:17:18.720 --> 0:17:21.000 it gets democratized. You know, you can go out in 0:17:21.000 --> 0:17:22.480 the street right now. If I got on the street 0:17:22.480 --> 0:17:24.639 and I ask someone what the Internet is, they're going 0:17:24.680 --> 0:17:26.040 to look at me like I have five heads. They 0:17:26.080 --> 0:17:27.840 don't necessarily have to know how it works, but they 0:17:27.880 --> 0:17:30.080 know what it is, right, And then you get the 0:17:30.119 --> 0:17:34.359 plateau of productivity. In the prototypical Gardner hype cycle, the 0:17:34.359 --> 0:17:39.160 plateau of productivity is actually below the peak of inflated expectations. 0:17:39.560 --> 0:17:42.480 But I think most of the time in markets it's 0:17:42.600 --> 0:17:45.760 actually higher. Obviously, there's a bit survivorship bias on this. 0:17:45.960 --> 0:17:48.959 You know, nobody that owned pets dot Com benefited from 0:17:49.000 --> 0:17:54.240 the plateau of productivity. But if you think about you know, Facebook, Amazon, Apple, 0:17:54.240 --> 0:17:57.280 you know these you know they or even you know, 0:17:57.320 --> 0:17:59.480 you look at like the nifty to fifty in the seventies, right, 0:17:59.560 --> 0:18:02.120 like some of them have had very bad returns, like IBM. 0:18:02.240 --> 0:18:04.760 But then you know, honeywell or carry your global you know, 0:18:04.800 --> 0:18:10.080 you get the uptake on the GDP effect. And essentially 0:18:11.119 --> 0:18:13.160 this is kind of the enemy of the mega trend, 0:18:13.240 --> 0:18:15.960 right because it's very easy to recognize it in the beginning, 0:18:16.000 --> 0:18:18.879 and then if you're too late with it, you're gonna 0:18:18.920 --> 0:18:21.720 think that the peak of inflated expectations is just the 0:18:21.760 --> 0:18:25.960 pullback right when it's not. You know, So this is 0:18:26.040 --> 0:18:30.359 kind of something where it's good to continuously monitor whether 0:18:31.240 --> 0:18:33.560 your thesis is playing out, whether it is actually had 0:18:33.600 --> 0:18:36.840 you know, whether it's artificial intelligence or you know, like 0:18:36.880 --> 0:18:40.240 you said, the rise of Chinese industry, or the Inflation 0:18:40.440 --> 0:18:43.840 Reduction Act and the impact and impetus of fiscal spending 0:18:44.320 --> 0:18:47.040 or you know, GLP one drugs that as long as 0:18:47.080 --> 0:18:48.840 you are on top of it and you can see, 0:18:48.880 --> 0:18:51.359 you know, what are the earnings expectations like and what 0:18:51.440 --> 0:18:53.520 are the actually you know, like like Nvidia is probably 0:18:53.560 --> 0:18:56.840 gonna you know, beaten raised for the next couple of years, 0:18:57.119 --> 0:18:58.520 but then you you know, where is going to be 0:18:58.560 --> 0:19:02.600 the point where the expectations aren't sustainable and when it 0:19:02.680 --> 0:19:05.240 comes to you know, you said you wanted to talk 0:19:05.240 --> 0:19:08.239 about the knock on effects, which kind of I mean, 0:19:08.320 --> 0:19:10.399 that's my favorite part of these things, right, like like 0:19:10.440 --> 0:19:13.960 when you actually capture a theme and you know, let 0:19:14.000 --> 0:19:15.359 me ask you a question like do you think the 0:19:15.440 --> 0:19:16.840 knock on effects are happening yet? 0:19:17.880 --> 0:19:20.679 I don't know what the take up. So my impression 0:19:20.800 --> 0:19:23.159 is that actually we should ask how much do these 0:19:23.240 --> 0:19:26.040 drugs actually cost because my impression is that they're pretty 0:19:26.119 --> 0:19:30.800 expensive and so they're not making huge inroads into the 0:19:30.840 --> 0:19:34.639 general population just yet, but that could easily change. 0:19:35.280 --> 0:19:38.320 Well, you know, right now, as far as weight loss 0:19:38.359 --> 0:19:43.720 is concerned. As an FDA on label indication, Novo has monopoly, right. 0:19:43.800 --> 0:19:46.080 Novo has wegov, which is the drug that you know 0:19:46.280 --> 0:19:49.520 just was had the big headline about twenty percent production 0:19:49.720 --> 0:19:54.639 in heart attack risk and essentially when they had you know, 0:19:54.680 --> 0:19:57.560 they can much charge what they want, right, and the 0:19:57.600 --> 0:19:59.920 way that it's going to develop is Lily's drugman jar 0:20:00.119 --> 0:20:03.240 which is much more effective, and there are other drug 0:20:03.240 --> 0:20:05.800 bredits true Tide which is still in clinical trials, but 0:20:06.160 --> 0:20:09.520 Munjara will be approved for weight loss. But at the 0:20:09.600 --> 0:20:12.600 end of this year, you know that was reaffirmed by 0:20:12.840 --> 0:20:14.840 or within the next six months. Right, that was reaffirmed 0:20:14.840 --> 0:20:17.679 by the Lee on their earnings call. And let me 0:20:17.720 --> 0:20:19.560 get the answer to the question first, because I want 0:20:19.560 --> 0:20:21.440 to go into something that's going to answer your question, 0:20:21.520 --> 0:20:23.800 but I do want to assess, right, so you think 0:20:23.800 --> 0:20:25.960 that the not going effects are happening yet no? 0:20:26.160 --> 0:20:29.200 So actually I've been wondering about this because I actually 0:20:29.480 --> 0:20:31.320 was kind of under the impression link. When are we 0:20:31.359 --> 0:20:35.520 going to see a company crash on earnings because they say, 0:20:35.560 --> 0:20:38.800 you know what, we're seeing our sales collapse because. 0:20:38.520 --> 0:20:40.160 No one's eating our chips. 0:20:40.680 --> 0:20:42.680