The Best $1,000 Investment You Can Make
By Rob Fannon, editor, Phase 1 Investor
February 20, 2009
Your local walk-in clinic is about to undergo a radical makeover.
Instead of sizing up your height, weight, pulse, blood pressure, glucose levels, and throat cultures, your doctor will judge your health with a simple read-out of your personal genetic code. With a drop of blood (and a personal check), you can order next-day pick-up of your genetic blueprint.
Imagine carrying around a key card like the ones you use now for your video store and warehouse club. But this one will carry the 6 billion-letter code that defines every aspect of your biology.
Doctors and pharmacists will be able to predict what disease you'll likely contract down the road... and prescribe preventative therapies. They'll use this blueprint to design your optimal diet, exercise routine, and drug treatments. And that's just for starters...
Imagine how you could use the data to prove your identity indisputably, and the security applications this would allow. The data may even guide decisions like whom you marry or what jobs and hobbies you pursue.
The possibilities are boundless. The catch, however, is cost.
The government-sponsored Human Genome Project unveiled the first copy of the entire human genome in 2000... after spending 13 years and $3 billion. Its publicly traded rival, Celera Genomics, accomplished the same task for $300 million that same year.
Every year, DNA sequencing technology gets faster, cheaper, and more accurate. Still, the best anyone can do is map out a DNA sequence for $60,000. That's much better than $3 billion, but still too expensive to be done at your local walk-in clinic.
In October 2006, the X Prize Foundation offered a $10 million prize to the first team to build a machine that can sequence 100 human genomes in 10 days for $10,000 or less per genome. No winner yet. The National Human Genome Research Institute (part of the NIH) wants to be able to map an individual's genetic library for $1,000 per genome by 2014.
Already, more than 1,000 predictive genetic tests are commercially available. It's a $200 million or $300 million industry. (Check out my experience with genetic tests here and here). But today's tests are pricey and limited in scope.
The company that finally transforms the entire genome into a consumer good within reach of the average customer would be a big winner, owning a market worth upwards of $10 billion a year. Here is a sampling of the major players engaged in the race:
Company |
Market Cap |
P/E ratio |
Affymetrix (AFFX) |
$200 million |
N/A |
Beckman Coulter (BEC) |
$3 billion |
13x |
Illumina (ILMN) |
$4 billion |
30x |
Life Technologies (LIFE) |
$3.5 billion |
14x |
Luminex (LMNX) |
$800 million |
55x |
|
This short list likely includes the eventual winner in the $1,000 genome race. Each company has a slightly different approach. The trick is, of course, to produce superior technology and run a profitable business.
I predict we'll have a winner within five years. Picking the right name is a surefire way to double your money before the $1,000 genome race is won.
Good investing,
Rob Fannon
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| • |
Gold fund GTU at all-time highs... up 55% since October. |
| • |
No relief for banking shares... Citigroup and benchmark regional bank ETF at new lows. |
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Casino giant MGM Mirage continues historic collapse... down from $100 to $4.50. |
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Tech blue chips Dell and Nokia hit new lows. |
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Last |
Change |
52-Wk |
| S&P 500 |
783.25 |
-0.66% |
-42.41% |
| Oil (USO) |
24.07 |
+5.29% |
-69.65% |
| Gold (GLD) |
95.80 |
-1.15% |
+2.75% |
| Silver (SLV) |
13.76 |
-2.89% |
-22.26% |
| U.S. Dollar |
87.47 |
-0.61% |
+14.87% |
| Euro |
1.27 |
+1.19% |
-13.77% |
| VIX |
46.41 |
-4.23% |
+90.20% |
| HUI |
315.07 |
-2.75% |
-32.43% |
| 10-Year Yield |
2.82% |
0.09 |
-0.79 |
|
| Company |
Sym |
Industry |
Zion Oil and Gas |
ZN |
oil & gas |
O'Reilly Auto |
ORLY |
auto parts |
NRDC Acquisition |
NAQ |
acquisitions |
Central Gold Trust |
GTU |
gold fund |
ICU Medical |
ICUI |
medical supplies |
Anadys Pharma |
ANDS |
pharma |
|
|
| Company |
Sym |
Industry |
Bemis |
BMS |
packaging |
CSX |
CSX |
railroad |
Hudson City |
HCBK |
bank |
Nokia |
NOK |
cell phones |
Whirlpool |
WHR |
appliances |
Bank of Montreal |
BMO |
bank |
Capital One |
COF |
credit cards |
Genuine Parts |
GPC |
auto parts |
Natl Bank of Greece |
NBG |
bank |
Torchmark |
TMK |
insurance |
BB&T |
BBT |
bank |
Comerica |
CMA |
bank |
General Electric |
GE |
conglomerate |
3M |
MMM |
conglomerate |
Tyco Electronics |
TEL |
semiconductors |
AXA |
AXA |
insurance |
Citigroup |
C |
bank |
Walt Disney |
DIS |
entertainment |
Konami |
KNM |
video games |
STMicro |
STM |
semiconductors |
American Express |
AXP |
credit cards |
Caterpillar |
CAT |
machinery |
Fortune Brands |
FO |
conglomerate |
MGM Mirage |
MGM |
casinos |
Teco Energy |
TE |
utilities |
Aflac |
AFL |
insurance |
BT Group |
BT |
communications |
Discover |
DFS |
credit cards |
ING |
ING |
bank |
Suntrust |
STI |
bank |
Wynn Resorts |
WYNN |
casinos |
BOK Financial |
BOKF |
bank |
Dell |
DELL |
computers |
Host Hotels |
HST |
hotel |
Owens Illinois |
OI |
packaging |
Weight Watcher's |
WTW |
weight loss |
|
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