travmatt (u/travmatt)

travmatt commented on “Is curing patients a sustainable business model?” asks Goldman Sachs (2018) arstechnica.com/tech-poli... · Posted by u/isomorph

read_if_gay_ · 4 years ago

Let me repeat. If treatment brings in more profit than cure, and you and your competitors have a treatment, then it is in none of your interests to bring out the cure, since anyone who does it would reduce their own profit besides killing that of their competitors.

There is no "global conspiracy" required at all. Not actively doing research towards reducing your own profit is enough.

Outsiders could theoretically come in, yes. But the hurdles are huge for biotech startups, and of course the established players are lobbying to keep it this way, so I won't be holding my breath. It's different from the tech world.

travmatt · 4 years ago

Any business who followed your logic would be then vulnerable to the first competitor who was willing to sell the cure instead. To prevent that from happening, it would take a global conspiracy of every company who could develop said drug, along with the complicity of every scientist who knew about said research and who would be tempted to develop or leak its it themselves.

travmatt commented on “Is curing patients a sustainable business model?” asks Goldman Sachs (2018) arstechnica.com/tech-poli... · Posted by u/isomorph

read_if_gay_ · 4 years ago

> that nobody else in the world could create the same drug

Could create it and make a profit selling it.

If the cure generates less profit than current treatment, and if you’re currently selling treatment, then that’s not going to be worth it for you.

If you don’t, well you still need to get it to market, which requires substantial investment.

My point is that the described scenario is not entirely unlikely. For example, type 1 diabetics in the US need something like $600 worth of insulin, every single month for the rest of their lives. Say that’s 60 years, you’re looking at $430k, not even counting needles, sensors, and other stuff they might need (or absolutely need). Average patients won’t be able to cough up nearly as much for a cure.

Pharma has just been way faster than tech in realizing that the subscription model has far better yields.

travmatt · 4 years ago

In reality, a company will look at the cure and know that it will end the market in management. They will also understand that whoever brings the cure to market first will take the majority of the profits, and the other will just lose. A company will not refrain from selling a cure to protect the market share of its competitors.

Your idea only works if you believe there is a global conspiracy of businesses and scientists who all agree to embargo research into cures, and who are all willing to forgo any profits on the cure while also recognizing any scientist and company not in their conspiracy could wipe out their profits at any time.

travmatt commented on “Is curing patients a sustainable business model?” asks Goldman Sachs (2018) arstechnica.com/tech-poli... · Posted by u/isomorph

cogman10 · 4 years ago

I'm not in the industry, but I've read a lot about how drugs get to market and this sounds valid. It takes a LOT of time and money for a drug company to get to the point of knowing how safe and effective a drug is in humans. That's pretty much the last step of drug manufacturing.

By the time a company has spent that amount of research effort and money, there's no way they'd just abandon a drug because it isn't rent seeking enough. Businesses want to recover whatever investment they can.

travmatt · 4 years ago

If a company is aware that a new drug could cure a previously managed disease, it’s pretty obvious that you’d like to be the one pocketing any available profits before a competitor does. The conspiracy only works to the extent that nobody else in the world could create the same drug, and that every person aware of its existence is prepared to keep it secret and lose out on the money to be made selling it.

travmatt commented on Young Koreans are echoing r/WallStreetBets in their war against short sellers restofworld.org/2021/sout... · Posted by u/RealDeinonychus

Retric · 5 years ago

I was making a different point, yes on most days it’s a net positive. But, it’s also introducing new black swan events like a short squeeze where the price becomes wildly disconnected from the underlying economic reality.

It’s often argued that a small increase on most days is more important than large but rare inaccuracies, however it’s a question of how you’re measuring things. If you use a direct average vs square root of the sum of inaccuracies squared etc.

travmatt · 5 years ago

I don’t think the stock market has correlated with underlying economic realities in a long time, and I don’t think short selling is the cause of that.

Additionally, I’d think that the small constant corrections of short sellers helps avoid most large cost corrections later.

travmatt commented on Young Koreans are echoing r/WallStreetBets in their war against short sellers restofworld.org/2021/sout... · Posted by u/RealDeinonychus

Retric · 5 years ago

Short selling doesn’t actually help with price discovery as it can artificially inflate or deflate the stock price in ways that buying and selling doesn’t. Knowing something is 55.54$ not 55.55$ isn’t nearly as important as knowing it’s around 55$ not 155$, thus if anything short selling is harmful to price discovery.

travmatt · 5 years ago

Economic research[0] disagrees with you.

“””

We show that stock prices are more accurate when short sellers are more active. First, in a large panel of NYSE-listed stocks, intraday informational efficiency of prices improves with greater shorting flow. Second, at monthly and annual horizons, more shorting flow accelerates the incorporation of public information into prices. Third, greater shorting flow reduces post-earnings-announcement drift for negative earnings surprises. Fourth, short sellers change their trading around extreme return events in a way that aids price discovery and reduces divergence from fundamental values. These results are robust to various econometric specifications, and their magnitude is economically meaningful.

“””

[0]https://marginalrevolution.com/marginalrevolution/2021/01/sh...

travmatt commented on Young Koreans are echoing r/WallStreetBets in their war against short sellers restofworld.org/2021/sout... · Posted by u/RealDeinonychus

kminehart · 5 years ago

Short selling is valuable. What's more valuable than putting your money where your mouth is?

The way I see it, every action you take in the stock market is a reflection of your beliefs; if you buy a stock, you believe, and are indicating, that the stock is undervalued. If you sell a stock, you believe that the stock is overvalued.

Short selling is a valuable way to indicate that you believe a stock is overvalued whenever you don't own the stock.

I understand why some may read about short selling and think it's profiting off of other's miseries, but they provide value in the market, and whether or not people are short selling the stock, if it's overvalued then it's overvalued.

travmatt · 5 years ago

Markets cannot find efficient prices without short selling.

travmatt commented on Young Koreans are echoing r/WallStreetBets in their war against short sellers restofworld.org/2021/sout... · Posted by u/RealDeinonychus

woopwoop · 5 years ago

One of the most powerful people in the world literally saying "Short selling should be illegal.":

https://mobile.twitter.com/elonmusk/status/12017814896391618...

travmatt · 5 years ago

One of the people in the world most vulnerable to short selling is against it.*

Short selling is still an essential part of markets and price discovery, it’s not really that hard to understand why Elon is against it.

travmatt commented on The GPU Sadness Index: Tracking eBay Pricing tomshardware.com/news/gpu... · Posted by u/rbanffy

chrisseaton · 5 years ago

Why don't scalpers or miners sign up for the same contracts?

travmatt · 5 years ago

I saw a picture on Reddit of a wall stacked high with 3060’s. In the comments, the poster mentioned he placed a bulk order, the downside was it took a while.

travmatt commented on WH Ignores Yellen $800k Speaking Fees from Firm Bailed Out GameStop Hedge Fund realclearpolitics.com/vid... · Posted by u/9387367

byecomputer · 5 years ago

Some might argue that public officials being paid extraordinary sums by private investment firms in exchange for access and influence is nefarious in itself.

travmatt · 5 years ago

Some might argue that you should provide evidence and arguments that support your allegation that’s she’s selling influence.

travmatt commented on WH Ignores Yellen $800k Speaking Fees from Firm Bailed Out GameStop Hedge Fund realclearpolitics.com/vid... · Posted by u/9387367

nanis · 5 years ago

> Why does comic-con pay famous actors to appear?

In the case of Comic-Con, they do that because their audience who pay for their tickets are more likely to pay if the actors they like are part of the experience.

In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess.

Even "networking" in this context is geared towards signaling to friend & foe that you now have inside reach to people whose actions or even mere words can move mountains of money in one direction or another.

Totally different.

By the way, this is standard textbook economic analysis and it would not be different if the names and political parties were switched.

travmatt · 5 years ago

I have a hard time reconciling the fact you claim to be making a dispassionate analysis, and yet cannot find a single accomplishment of Janet Yellen that would merit her being an in-demand speaker, except her ability to ‘direct government largesse’. If you were trying to make a sincere argument, I suspect you’d find a few reasons people would value her ideas.