I’ve been thinking about H.L. Mencken lately. The reason is all the attention given to stem cells since the lifting of the funding ban.

Mencken had a genius for stating overlooked truths. One, which I’ll paraphrase, is that we all know that the media get it wrong when they’re covering our areas of expertise. Then, defying logic, we believe the media when it covers something outside our fields. There are exceptions, of course, but his observation is too often true.

This is the case, by the way, not only for the newspapers and networks. Even the more respected scientific journals are making huge mistakes. If you subscribe to Nature, you may have seen the recent article titled “Virus-free pluripotency for human cells.” The authors write, “For the first time, specialized human cells have been transformed into a state similar to that seen in embryonic stem cells, without using viruses.”

If you’ve been reading Breakthrough Technology Alert for any length of time, you know this is not true. In fact, there was one doctor who accomplished this virus-free transformation several years ago…

I suppose I should actually be happy when journalists get it wrong. It means that my readers are among the very few people outside of the scientists doing the research who know what’s really going on.

Incidentally, my colleague Chris Mayer once took a group of us to the bar, not far from Agora Financial headquarters, where Mencken often drank. Let me give you one more quote from the Sage of Baltimore. He wrote, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety).”

The new administration is now saying the economy is “fundamentally sound.” Since it mocked Sen. McCain for saying the same thing before the election, we are being asked to believe that the stimulus bill has fixed the problem.

Unfortunately, this is not true. I agree that the economy is sound in the sense that it will overcome the damage done by the political classes. Most stocks, though, continue to suffer. The evaporation of investment capital is even more of a problem. Some startups and small-caps that would have succeeded wildly will not survive.

That’s why I’ve always diversified into transformational stocks. If you had bought into the leading six or seven computer companies at the start of the computer revolution, more than half would have failed, but the winners would have made you rich.

It’s important to remember that there are several sectors now that will be bigger than computers. Stem cells is one of them, but so are RNAi and nanotechnology. Don’t be alarmed. Don’t mistake temporary problems for long-term trends.

The people who are getting their cues from the mainstream media have bid up stem cell companies, including the wrong ones. For that reason, I’m going back to RNA interference in the next issue. This industry is making miraculous progress toward controlling the genetic switches that cause most diseases.

Sincerely,
Patrick Cox

March 19, 2009

Patrick Cox

Patrick Cox has lived deep inside the world of transformative technologies for over 25 years. In the 1980s, he worked in computer software development and manufacturing. By the mid-1990s, he worked as a consultant for Netscape — the company that handled 90% of all Internet browsing traffic at the time. InfoWorld and USA Today have featured Patrick's research numerous times. He's also appeared on Crossfire and Nightline. Patrick has been quoted by The Wall Street Journal and Reason magazine. His expertise brought him to Agora Financial, where he now heads Breakthrough Technology Alert, the only place you'll find the truly transformational technologies that offer exponential gains.

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