Quantum Wealth Summary
- What you need to know: This Kiwi biotech company used to be a rock star, delivering a 1,600% return from March 2020 to September 2021. However, since then, the stock price has plunged 95% from its peak.
- Why it matters: Small-cap stocks are highly volatile. They can rise or fall sharply based on sentiment alone.
- Here’s the state of play: We explore whether this Kiwi company could get a second wind and enjoy another rebound — or whether it makes sense to bet on another global company with stronger fundamentals.
My parents were born in Malaysia in the 1950s.
It was a time of great change for Southeast Asia.
The ailing British Empire was gone, but in its place was an ascendent United States. The postwar economic boom was just getting started. Innovation and prosperity would accelerate in the decades to come.
What kind of difference did it make? Well, a huge one. In my own Malaysian family, I can see a clear dividing line between the past and the present:
- For example, I have uncles and aunties that I have never met. This is because they either died in childbirth or in early childhood. Tragically, they didn’t have access to modern healthcare.
- Also, here’s another example: in the older days, if you lived to be 50, your family and friends would be obliged to celebrate a second birthday with you. Why a second birthday? Well, why not? By reaching the age of 50, you had beaten the odds.
Globally, the historical long-term trend for longevity is striking. Here are some facts from A Wealth of Common Sense:
- By the late-1600s, one-third of the children born in the richest parts of the world died before their 5th birthday. Today, this sad fate befalls just 6% of the children in the poorest parts of the world.
- In 1800, among all babies who were ever born, roughly half died during their childhood. Life expectancy was just 30 years and no country had a life expectancy above 40. Life expectancy at birth was only 45 years in 1870. The average life expectancy around the world today is 72.
- Every single country in the world today has a lower infant or child mortality rate than it had in 1950.
Of course, all this is made possible through the rise of modern medicine:
- My parents’ generation — the baby boomer generation — became healthier, wealthier, and more socially mobile than any generation before them. Their journey was transformative. They could dream of bigger things. Achieve bigger things.
- Now, in this era of social media filled with agitation and sensation, it can be easy to forget how far we’ve come. We tend to take healthcare for granted. But such progress is hard-won. It comes from great sweat and sacrifice.
Here’s an intriguing fact from The Conversation:
It takes 10 to 15 years and around US$1 billion to develop one successful drug. Despite these significant investments in time and money, 90% of drug candidates in clinical trials fail.
So, in biotech, failure rather than success is the rule:
- Want to get rich quick? Well, this certainly isn’t the place to do it.
- Biotech is not just about finding a needle in a haystack, but finding the right haystack to begin with. The odds are overwhelming. Extraordinary determination and ingenuity are needed to get to the finish line.
So, at the moment, here’s what we’re watching:
- This Kiwi biotech company used to be a rock star, delivering a 1,600% return from March 2020 to April 2021. However, since then, the stock price has plunged 95% from its peak.
- Small-cap stocks are highly volatile. They can rise or fall sharply based on sentiment alone.
- We explore whether this Kiwi company could get a second wind and enjoy another rebound — or whether it makes sense to bet on another global company with stronger fundamentals.
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