In Search of the Perfect Investment

They priced Alibaba (BABA) at $68 a share last night.

I suspect that none of my readers — like me — got any shares at $68.

I suspect Alibaba will be a decent performer in coming years. It’s in the right place at the right time.

This morning many syndicate buyers will flip their shares. But there’ll be equally many crazies who’ll buy the opening frenzy.

One thing different about this IPO is that a lot of shareholders from earlier rounds are being allowed to sell. Normally these guys have to wait six month.

If you’re willing to endure today’s madness, pick up a handful.

Next week it may be cheaper. There’s no way to predict this, though lots of people will try.

 The Transformation. If you see this September 15 issue of the New Yorker,

read the article called the Transformation. It’s about major medical breakthroughs by:

Excerpts from the article:

+ Stein described one patient to me, a woman in her late sixties with A.M.L. She had already undergone a bone-marrow transplant, had relapsed, and then had more chemotherapy; nothing helped. To Stein’s surprise, after three months on AG-221, her leukemia had gone into complete remission and her blood count had returned to normal. “It was transformative,” Stein said. “She gained weight and told me that the pep in her step was back.” Another patient, a sixty-year-old man with A.M.L., also had failed to benefit from several regimens of chemotherapy, and he, too, went into remission after taking AG-221. Moreover, the side effects of the medication, which is given orally, have been manageable—mostly mild nausea and a loss of appetite.

+ Advances in DNA technology and in computing led to the mapping of the healthy human genome, and of other genomes, including those of various cancers. Scientists assumed that they would soon decipher how tumors arise and find a way to stop them. In the case of some cancers, that promise has been fulfilled, but for most, especially once they have spread, it has not. In 1998, after the development of new drugs that could shut down certain cancers by choking off their blood supply—an advance, known as anti-angiogenesis, that has given rise to the drug Avastin—the Nobel laureate James Watson predicted that this work would “cure cancer in two years.” Immunotherapy has recently been shown to be highly effective against melanoma and kidney cancer, but many other cancers manage to evade this type of therapy.

The more scientists learn about cancer, the more diverse and vexing their opponent appears. Most cancers have several potential ways of developing. Even within a single tumor, individual cancer cells may follow separate road maps. A drug designed to target one pathway may succeed in destroying only a fraction of the tumor, leaving the rest to grow, spread, and kill. The IDH-2 mutation is just one of many enzyme mutations that are found in acute myelogenous leukemia. Recently, Timothy Ley, a researcher at Washington University, in St. Louis, and an expert on the genetics of blood cancers, published a study involving two hundred patients with A.M.L.; he found that each patient harbored a unique set of mutations. “It’s complex, but I’m not daunted,” Ley told me. “At least now we know what we’re dealing with.”

Agios hopes that AG-221 will become a key in treating those cancers which are driven by IDH-2. In March, the company launched clinical trials of another drug, AG-120, which targets a different mutated enzyme, IDH-1. The mutation occurs in as many as ten per cent of A.M.L. patients, but it’s also found in seventy per cent of patients with a type of brain tumor called a glioma and in fifty per cent of cases of cancer of the cartilage. The treatment of cancer, which traditionally adopted a destroy-the-village strategy, is becoming ever more like precision warfare. “We treat people with the specific mutation who may benefit,” David Schenkein, the C.E.O. of Agios, told me. “We don’t treat people who would not respond to the drug.”

If you’re a New Yorker subscriber, you can read the entire article online, here.

More about password managers. Everyone has their own patented method of keeping passwords — from shoeboxes with 4 x 6 cards, to software like Dashlane or 1Password. I write all mine down in a simple text file called Password.txt. I also use the browser Firefox which does a semi-good job of remembering them and now claims to allow me to access them all through the cloud. So, this semi-important subject needs a little more research. For now, my system is working. Don’t mess with it.

The Jewish board of directors
Schwartz, Cohen and Ginsburg were all close friends since childhood.

They decided they wanted to go into business together.

Schwartz says, “OK! I’ll invest $100,000.”

Cohen says, “I will go for $200,000.”

Ginsburg says, “All right, I’ll put in $1,000.”

Cohen says, “Since I’m putting in $200,000, I’ll be President and CEO. Schwartz, for your $100,000, you can be Vice President and CFO. And Ginsburg, for your $1,000, you will be our Sexual Adviser.”

Puzzled, Ginsburg asks Cohen, “What is a Sexual Adviser?”

Cohen replies, “When we want your f**king advice, we’ll ask for it.”

Finally found: The Perfect Investment
“I have good news and bad news.”

The CEO replies: “I have had an awful day, let’s hear the good news first.”

The lawyer says: “Your wife invested $20,000 in five pictures that are worth $2 million.”

The CEO replies enthusiastically: “Well done, that is very good news indeed! You’ve made my day. What is the bad news?”

They are pictures of you in bed with your secretary.”

Harry Newton, who’s off this weekend to his 45th business school reunion and to see his new granddaughter. Both are in Boston. The granddaughter is more interesting. But then all my classmates say the same thing about their grandchildren.

What’s fascinating (at least to me) is what we didn’t have when we graduated: microprocessors,  laptops, cellphones, smartphones, the Internet, satellite TV, voice mail, CNN, the Sony Walkman, Apple, Microsoft, fiber optic communications and Moore’s Law.

Hayes introduced the 300 bit per second dial-up modem eight years after we graduated in 1977. My FiOS at home today is 45,000,000 bits per second running on the Internet.

There are over 1.2 million apps on Apple’s App Store today. We didn’t even know what an app was.

The term Silicon Valley hadn’t been coined and Henry Kissinger had not visited China and opened it up — ultimately bringing several hundred million people out of poverty. Arguably, our biggest post-WWII foreign policy accomplishment. And, of course, Alibaba didn’t exist.

Michael, my son, graduated from business school five years ago. Imagine what his world will be like in 40 years at his 45th reunion. I pray he does something “insanely great” — the words Steve Jobs used to refer to his first Mac, which also wasn’t around 45 years ago.