Hiding in Plain Sight: Essays by Joon Yun, MD

Hiding In Plain Sight is a collection of essays that I have written on investing, healthcare, and life.

A Little Experiment

For the sake of experiment, read the next sentence once, while counting the number of “f”s that you see.

“Five-winged flies are the result of years of scientific study combined with the experience of many years.”

Most likely, you counted an “f” in each of the more vibrant words of the sentence: “five,” “flies” and “scientific.” Most people only see these three “f”s, when in fact there are six. The other “f”s are hidden in the unassuming preposition “of”. Your mind probably skipped over each “of” because it processed these words without absorbing the raw information of the letters that composed them.
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Day 222: Joon Yun

(From The Get Inspired! Project)

I go about my day really not thinking about ‘Do I know what I want?’ It’s more about ‘Am I available to what’s going on in the moment?’ And it’s a very nonlinear path, but it is much more … because I’m vulnerable and I don’t know where we’re going, I’m much more aware, and I find solutions to questions I wasn’t even asking.”

Toni Reece: Thank you so much, Joon, for agreeing to be part of the Project today, and before we begin, can you please introduce yourself?

Joon Yun: Yes, my name is Joon Yun. I am President of Palo Alto Investors, an investment management firm located in California, and I’m a physician by background. I ran healthcare investing at a firm for about 10 years, and I’ve been overseeing the firm for the last 2 years.
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The Next Black Swan: Global Depopulation

We’ve all heard the thesis on real estate investing: “They’re not making any more land.” It turns out that before too long we may not be making enough people either.

Global population has been expanding since antiquity, interrupted by wars, disasters, pandemics, and famine. Malthusian predictions of overpopulation, unsustainability, and resource depletion have also been a part of conventional wisdom since antiquity and remain popular today (see Paul Gilding’s “The Earth is Full” TED talk). It is, after all, a common trait of the human mind to assume that the past is an accurate predictor of the future.
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Value Investing Getting Too Crowded? Another Golden Age of Growth Investing Is On The Way

One of the landmark events on the calendar of investors took place last month—the Value Investing Congress in New York. But it behooves us to remember that an alternative approach also exists—that of growth investing.

While the two styles share many common principles, growth investing focuses on identifying companies with above-average growth rates, whose share prices today are considered inexpensive relative to their intrinsic value over the long term.

The dearth of investors who publicly tout the principles of growth investing is one sign that its golden age may now be upon us. The Wikipedia entry on “Value investing” lists more than a dozen current well-known value investors including Berkshire Hathaway chairman Warren Buffett. Value investing is a sensible discipline, and its success has attracted many acolytes. When too many people are performing the same analysis and arrive at the same conclusion, however, it becomes the crowded trade.
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Why Rising Healthcare Spending Can Be A Good Thing

Human endeavor creates value. Healthier people endeavor more. Thus, health is a creator of value, of prosperity. The converse is also true. Wealthier societies demand more healthcare. When life is grand, people want to live longer and they want to maintain healthy bodies. Therefore, health and wealth form a virtuous, feed-forward cycle.

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Another Golden Age of Growth Investing

One of the landmark events on the calendar of investors takes place this week — the Value Investing Congress in New York. But it behooves us to remember that an alternative yet equally tenable approach also exists — that of growth investing. While the two styles share many common principles, growth investing focuses on identifying companies with above-average growth rates, whose share prices today are considered inexpensive relative to their intrinsic value over the long term.

The dearth of investors who publicly tout the principles of growth investing is one sign that its golden age may now be upon us. The Wikipedia entry on “Value investing” lists more than a dozen current well-known value investors including Berkshire Hathaway chairman Warren Buffett. Value investing is a sensible discipline, and its success has attracted many acolytes. When too many people are performing the same analysis and arrive at the same conclusion, however, it becomes the crowded trade. By contrast, the only investor listed in the Wikipedia entry for “Growth investing” is Thomas Rowe Price, Jr., who died many years ago. Philip Fisher, another legend whose Common Stocks and Uncommon Profits is generally considered to be the reference work on growth investing, goes entirely unmentioned.
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Therapeutics as the Next Frontier in the Evolution of Darwinian Medicine

Evolutionary medicine (also referred to as Darwinian medicine) is the application of evolutionary theory to the understanding of human ailments.1 2 3 It explores evolutionary mechanisms of disease, offering a complementary framework to the proximate mechanistic explanations that prevail in medicine today. In this paper, we consider the application of evolutionary theory to the treatment of ailments.

A major contribution of evolutionary medicine is the framing of human diseases as maladaptations of our prehistoric factory settings. Our physiologic processes were shaped during prehistoric evolution to meet the needs of the era, but those same processes may behave maladaptively in the modern environment and produce disease. We take that notion one step further and propose an overarching therapeutic paradigm for human ailments based on evolutionary theory—the induction of adaptations in the body as a way to treat disease. It is the idea of creating somatic traits in the body that evolution might otherwise need to create over many generations through the sheer force of variation and natural selection. In the same way, that evolution has endowed us with traits that shield against biotic and abiotic stress to maintain homeostasis, we propose treating patients by endowing the body with buffers against ailments.
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Ethylene: The Most Important Molecule You’ve Never Heard Of?

Ethylene is a gaseous hydrocarbon with the molecular structure C2H4. It is commonly produced when hydrocarbons are exposed to oxidative stress, such as that found during lightning, volcanic eruptions, forest fires, and photochemical reactions on the ocean surface. Plants coopted ethylene biosynthesis during evolution to manage their response to oxidative stress from biotic and abiotic sources. Further exaptations of ethylene include modulation of plant life history events such as development, transformation, senescence, and death.

Due to a number of factors described below, humans may be subject to increasing ethylene exposure. The potential health consequences of ethylene exposure are not part of the public consciousness and warrant further exploration.
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Reverse Malthus

What are the potential implications of global depopulation?

The world population has been growing since antiquity, interrupted by wars, disasters, pandemics, and famine. But the global human population may soon hit an inflection point and enter a period of demographic contraction.

The population is already declining in many countries, including Japan, Brazil, China, Germany, Italy, Hong Kong, Singapore, Kazakhstan, Ukraine, Belarus, Moldova, Estonia, Latvia, Lithuania, Bulgaria, Georgia, Armenia, Bosnia, Croatia, Slovenia, and Hungary.1 Many more are on the brink. If it were not for international immigration, both the United States and the EU would have declining populations today. The total population of the continent of Europe, including Russia and non-EU countries, peaked in the year 2000.
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Not-So-Dire Diagnosis

Warren Buffett once famously stated that “Berkshire [Hathaway] buys when the lemmings are headed the other way,” conjuring up visions of rodents blindly following one another off a cliff. But the idea that lemmings participate in mass suicide is a myth, propagated by a Disney documentary. The widespread misuse of the lemming metaphor by investors to illustrate herd behavior itself reveals the herdlike behavior of investors and the scarcity of original insight.

Original insight is also uncommon among doctors. Physicians are trained through rote memorization, and independent views are often ridiculed by peers and prosecuted by malpractice attorneys. The hiring of physicians as consultants by investment firms seeking unique perspectives has instead led to a greater tendency toward consensus thinking.
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