In reality, I was road-kill.
The sucker at the poker table.
The cartoon character who ran off the cliff and hung in the air for a couple of seconds before looking down and realizing that I was -- for the moment anyway -- defying gravity.
I failed to realize that while my understanding of the science behind companies' assets gave me an edge in trading with those who lacked my technical vocabulary, that edge was more than counter-balanced by experienced stock traders' understanding of more important things.
Like stocks and trading.
My colleagues at Special Situations ("Special Sit") gave me a crash course in trading, and before long I knew to check holders lists and volume flows and financing overhangs and cap structure messiness and full dilution levels that made stocks un-investable, to calculate the effective float and to check with my trader to see if there were "blocks out there" on which we could bid.
This education was med school all over again -- knowing in advance who needed a pre-op bowel prep and who needed cardiac clearance, who needed a bedside bleeding time because of chronic aspirin use and whose chest x-ray had to be run early since it would inevitably be read as "cannot rule out" this or that underlying disease -- that would need to ruled out in the middle of the night for the next day's surgery to proceed on schedule.
A good checklist + experience equaled good medical care. In depth knowledge of science and medicine + knowing how to invest and trade equals a profitable portfolio.
And those advantages of a medical background? Turns out they matter, but only when layered on top of proficient portfolio management.
An example of helpful doctor's instincts, but first some background:
The human body is amazing in the way it zones off certain parts to protect them from the army of bacteria that is always waiting to occupy any surface or cavity that lets down its guard. Bacteria colonize our skin, the uppermost digestive and respiratory tracts and the lower most digestive tract, but are off limits to the nervous system, the blood, bones, small intestines, lungs and the upper reproductive tract.
Think about the respiratory tract. Like houses with a common driveway, the lungs and the digestive system share a common connection to the outside world, the (very) unsterile mouth and throat. The body protects that lower respiratory tract (ie the lungs) with special white blood cells, with cilia (mini-brushes) that push foreign material back out and with mechanical reflexes like coughing and sneezing. The business end of the respiratory tract, where oxygen is transferred to blood, is a *pristine" environment. Doctors learn this early in the basic science part of early med school, and the lesson is reinforced when we learn internal medicine, infectious disease, pulmonology and anesthesia. Our sense of the lungs as a zealously-protected part of the body becomes instinctive.
So.... when presented with companies based on inhaled drug delivery platforms, we have an immediate and innate skepticism that a lot of other investors may not have. Of course there are drugs that are routinely delivered by inhalation, but most of these are designed to act ... in the lungs. When drugs attempt to cross into the blood stream from the lungs to act systemically (think insulin for example), or are destined for the far-off central nervous system (and having to pass the blood-brain barrier as well) they encounter some of nature's best engineered defenses.
And -- no surprise -- development of inhaled systemic drugs has been difficult and largely unsuccessful.
Just like they taught us in med school.