Medical Device and Healthcare to Save the Day

Over the past two years we have seen significant upheaval in our economy. Mainly due to artificial demand created by inappropriately easy access to credit through real estate financial alchemy, we now suffer for what we spent over the last decade (or at least over the second half of the last decade). There are too […]

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Over the past two years we have seen significant upheaval in our economy. Mainly due to artificial demand created by inappropriately easy access to credit through real estate financial alchemy, we now suffer for what we spent over the last decade (or at least over the second half of the last decade). There are too many books and movies about the topic to mention.

One author I enjoy reading is John Mauldin.  John is an investment advisor with a gift for explaining what has happened to our economy in plain terms, even if it gets a bit technical at times.  In those instances, I wind up learning something new about financial derivatives and other creative ways to make money that make little in the way of quality of life.  While Mr. Mauldin has been cool about any rapid recovery, he has consistently stated one opinion: that we live in a world dominated by people with the desire to make things better than they are now, and this will produce innovation that we can’t even imagine today.  The US is the hub of this activity.  From a newsletter John sent on Nov 29, 2009, nearly a year ago:

But how many setbacks, bumpy rides, and false starts have I gone through over the decades? Frankly, I try to forget. But the point is that each of those episodes was another learning opportunity. And I woke up the next morning and started trying to figure it all out.

But it’s not just me, it’ is tens of millions of entrepreneurs and businessmen and women in the US, and hundreds of millions worldwide, that have the same ambitions and drive…every day we get up and try to figure out how to turn it into real income. And some of us are talented or lucky (that would be me) enough to make it happen.

Long-time readers know that I think we are in the midst of a secular bear cycle, much like 1966-82. The next decade is likely to produce less than average growth, due to structural problems and the bad choices we have made with personal and government debt. I am perfectly cognizant that unemployment will be over 10% for a protracted time. That is tragic for those unemployed and underemployed. I realize the entire developed world has huge and seemingly insurmountable pension and medical obligations over the next few decades, which we cannot possibly hope to meet. The level of angst that we will live through as we adjust will not be fun.

But the point is, that is just what we do – we live through it. In spite of the problems, we get up every day and figure out how to make it. Would it be better if we could get our act together in (pick a country) and not be forced to adjust because we have come to the end of the line? Yes, I know we will likely have some very tumultuous times ahead of us, making business and investment decisions more than a little difficult.

So what? The future is never easy for all but a few of us, at least not for long. But we figure it out. And that is why in 20 years we will be better off than we are today. Each of us, all over the world, by working out our own visions of psychic income, will make the real world a better place.

He goes on to talk about healthcare and the innovations to come:

Ever-faster change is what is happening in medicine. None of us in 2030 will want to go back to 2010, which will then seem as barbaric and antiquated as, say, 1975. Within a few years, it will be hard to keep up with the number of human trials of gene therapy and stem cell research. Sadly for the US, most of the tests will be done outside of our borders, but we will still benefit from the results.

I spend some spare study time on stem cell research. It fascinates me. We are now very close to being able to start with your skin cells and grow you a new liver (or whatever). Muscular dystrophy? There are reasons to be very encouraged.

Alzheimer’s disease requires somewhere between 5-7% of total US health-care costs. Defeat that and a large part of our health-care budget is fixed. And it will be first stopped and then cured. Same thing with cancers and all sorts of inflammatory diseases. There is reason to think a company may have found a generic cure for the common flu virus.

A whole new industry is getting ready to be born. And with it new jobs and investment opportunities.

I couldn’t agree more.  While we have seen (IMHO) the manipulation of money and its flow wind up creating a banking business model where a profitable, non-recourse mortgage lending business was independent of underwriting the loans (I am not exaggerating here), the future has the potential for the genuine improvement in the quality of life for the world.  This is something to both be excited about and be proud to be a part of as a research company serving the medical device, pharma and healthcare communities.

Let me know what you think…do you agree?