Every year about this time I send out an unofficial end of year investor's letter -- "unofficial" because 1) it does not get sent to my investors and 2) it usually has little to do with investing. (This is not an official business correspondence)
I’ll get to business in a bit.
But first a story.
It's just after 7:00 on a December morning at the 50th Street subway stop in Times Square. The line outside the Stardust Diner stretches to Broadway, rounds the corner and stops just short of the stage door of the theater where The Music Man is playing. The Stardust is where the waiters and waitresses stand on the counter and sing show tunes.
Rachel from Friends worked there.
As I walk by the Stardust on my way to work, the Spotify algorithm serves up an old Cat Stevens song.
I left my happy home, to see what I could find out
I left my folk and friends, with the aim to clear my mind out
One hundred and eighty miles to the northeast, there's an iron gate at Brown University. New students go through the gate onto campus the first day of school freshman year and go back the other way at graduation. In between the gate stays locked.
The name of the song is On The Road To Find Out.
Depending on traffic, state trooper presence and the beat of the music playing on the car sound system, it takes between two and a half and three hours to drive up I-95 to get to Providence. The most memorable drive was the Covid evacuation pickup in March of sophomore year, the cars double-parked, clothes stuffed into Hefty bags -- students now refugees fleeing the oncoming viral army.
Well, I hit the rowdy road, and many kinds I met there
Many stories told me of the way to get there
The Stardust opens at 7 and it's already full, so the people I see on line will be the second sitting. There are no reservations. Lots of strollers on line and lots of sweatshirts and varsity jackets. Ohio State, Arizona. Lots of accents and dialects.
Tarana mentored two sisters from a Providence grade school, recent immigrants from Senegal. She'd pick them up and take them to campus and one day they decided to do field research, studying (if I remember right) something like the relationship between mood and sleep. They surveyed students and staff and professors, then tabulated the data and came up with a conclusion.
The sisters were 11 and 13 years old.
My office is about a ten minute walk from the Stardust diner, and that particular morning, with Cat Stevens singing in the background, I envision drives to airports in Texas and Colorado and Dublin and Madrid, taxis from JFK to the Marriott Marquis, QR coded tickets to Phantom of the Opera and Wicked and bookmarked pages from Trip Advisor that summarize which days the museums close and which hop-on hop-off bus tour stops where.
Cat Stevens released Tea for the Tillerman in 1970, when I was in middle school. I first heard it when we visited by father's old friend Carl Tasch, who had a son, Ira, who was my age. He played the album start to finish, which relieved us of having to find something to talk about.
On the Road to Find Out is the fourth song on side two.
I reach the office. A card in my wallet unlocks the elevator button to our floor, an action that creates one more data point in the building's security log.
What was the relationship between mood and sleep in a sample of the twenty or so people surveyed one Spring afternoon in Providence? How was the data analyzed? What was the conclusion?
The elevator opens, the work day starts.
Well, in the end I’ll know, but on the way I wonder
Through descending snow, and through the frost and thunder
I listen to the wind come howl, telling me I have to hurry
I listen to the robin’s song, saying not to worry
Of course the sleep data was never the point, and neither is the total amount of time spent on lines on a trip to New York. What matters is that two young girls will remember how easy it was to approach a bunch of older and very foreign acting people, to talk to them and to ask them questions a couple of miles and a world away.
So on and on I go, the seconds tick the time out
There’s so much left to know and I’m on the road to find out
Regarding business?: Not a great year, but it will be fine.
Wishing you all a happy and fulfilling holiday season, a successful and engaged 2023, and forever safe passage on the road to find out.
(Previous letters in the series: www.dbsable.com)
Every year about this time I send out an unofficial end of year investor's letter -- "unofficial" because 1) it does not get sent to my investors and 2) it usually has little to do with investing.
I’ll get to the funds’ performance in a bit. First, let’s pick up where we left off last year.
You’ll recall that Priya, Nikhil and I survived Tarana’s trip to the bridal gown store in the mall in Dartmouth, Massachusetts to buy a prom dress. More about that later.
Years ago a friend sent me a copy of a book with a “read this chapter” note. The important part was a story about an old man who liked to dance. If I remember right he used to go to a community center or some place like that and, no matter what kind of music was playing, he would go out on the dance floor and close his eyes and spin around and do whatever the music made him feel like doing. The way the old guy danced was nothing like the move-as-little-as-possible, keep your hands at your sides and, heaven forbid, don’t let anyone think you are enjoying yourself style that I had perfected years ago. His way was better.
I read the story, put the book on the shelf and figured I’d come back to it another time.
My father gave me a piece of advice: sometimes it’s best not to let everyone know what you’re thinking. I took that advice to heart. Maybe I learned it too well. I missed the part where if sometimes its best to keep things to yourself, then ― at other times― letting the world in is okay, and sometimes it’s a lot better than ok. Nikhil always understood that. A good example: we stopped at a town square during a festival in the Netherlands on our way to Kröller-Müller and Van Gogh a few years back. Nik and I wandered to the bandstand as the music started. His dancing involves a lot of jumping and pretty soon he had a bunch of bikers in leather jackets over black t-shirts, with long beards and dark sunglasses, leaping up and down with him to the beat of what was actually a pretty good band playing old Motown. A few songs, lots of spilled beer (theirs, not his) and many high fives and fist bumps with his new Dutch friends later, we were off. He was about fifteen the time.
I still have my friend’s book, which I have read through many times, and it’s easy to bring back the image of the old guy out on the dance floor. I thought about him again a few weeks after the David’s Bridal Shop episode.
The after-prom party for the Chapin class of 2018 was held in someone’s parents’ second or third house’s huge backyard, somewhere up in horse country. I think the story included shuttle buses and an enormous sloping lawn and a big tent and paper lanterns. Not burdened with the awkwardness of boyfriends and girlfriends and the before the after prom issues of is this a date date or a prom only thing (I am making this part up and it may have no relation to reality), the girls were free to be happy and to be loud.
Only not too loud. There was a neighbor and a phone call and maybe a police car, and the sound system, probably louder than Woodstock, had to be turned off. But the story ends well: a Bluetooth system switched on, dozens of headphones handed out, and the class of ‘18 and their guests spread out over the lawn dancing with abandon, neon glow sticks around their wrists and in their hair. To those of us watching from afar, a silent dance party on a starry starry night, a marvelous night for a moondance.
Oh yeah, before I forget, both funds did just fine this year.
Jumping the gun to wish you a great end of 2019 and happy, prosperous, and a choreographed with abandon 2020.
Every year about this time I send out my unofficial investor's letter -- "unofficial" because 1) it does not get sent to my investors and 2) it usually has nothing to do with investing.
I’ll get to the fund performance in a bit. First, a story.
We spent a long weekend in Newport back in May, and a heavy downpour that Saturday led us to the Dartmouth Mall in New Bedford, Massachusetts. More specifically, and improbably, it led us to David’s Bridal Shop.
Tarana’s school has a formal graduation ceremony, with hymns and speeches and limited seats for parents, grandparents and nannies (you need tickets to get in), and a commencement address, and each girl wears a long white dress. By tradition each dress is unique (there was a scandal involving a duplicate dress this year but I am not allowed to talk about it) and as March became April and April turned to May, finding the right dress rose higher and higher on the to-do lists for the members of the Chapin class of 2018.
Priya and Tarana were on top of this, but Nikhil and I were blissfully (and appropriately) unaware. The occasional white dress reference over dinner was easily lost in other transition talk as our family planned for both kids to move out of the apartment later in the summer, Nik into his own place and Tarana off to college.
For me, with the kids leaving, this was a year of vigilance for signs of overwrought sentimentality, which, whatever “overwrought sentimentality” means, sounds like a good thing to avoid. I kept an eye on myself for new obsessions and the emergence of odd hobbies. Indeed, I developed a passion for swapping out hard drives and upgrading RAM in old computers, but otherwise showed few signs of decompensating.
I dropped Priya and Tarana at the store and drive off to the far reaches of the many-acre parking lot, hoping that it would take so long to park that by the time Nik and I walked with our umbrellas back to the store, the dress would have been chosen, bagged, and paid for and the two guys in sandals, shorts, and hooded sweatshirts with Montauk printed on the front (Nik’s in green, mine in blue) would not have to see their daughter and kid sister prematurely wearing a wedding dress.
It was not to be.
David’s bridal is the Library of Congress of wedding dresses, rows and rows and rows. There were lots of fitting stations, each with a three-fold mirror and platform, and each with a little bleachers section so that the bride-to-be’s entourage could watch and weigh in. The women (all women, at each station, no best guy friends like in the movies) were split into two groups. One group, usually the mother and one best friend, gave their opinions right away, before the bride. The rest waited until the core group made up their minds, then cheerfully reinforced whatever was already decided. Dress after dress was unwrapped, modeled and rejected, until “the one” emerged, eliciting a roar from the bleachers, hugs and tears and the ringing of a loud bell (Nikhil and I laughed when we heard the bell the first time, drawing angry looks.)
But all of this activity faded when we reached the back corner and found Priya and Tarana and a saleswoman in cat glasses. I felt a sense of relief, because it looked like Tarana was playing dress-up, pulling costumes out of a fake cardboard storage chest in a friend’s attic. Nikhil and I looked at each and exhaled. The foundations of our existence remained intact, unthreatened by images of a future we were not yet prepared to see.
Then all of a sudden “the one” emerged, and we were no longer in someone’s parent’s attic. The women in next fitting station turned their heads towards Tarana and nodded and smiled and raised their eyebrows, the saleswoman put the right earpiece of her glasses to her lips, and Priya took a picture, then another one.
For Nikhil and me, the image we had feared was indeed remarkable, but it revealed the present, not the future. It was a graduation dress after all, found in an unusual place, but for worn for the right reasons at the right time. There were hugs but no tears.
And no one rang a bell. Nik and I made sure of that.
Regarding the fund: it was indeed a year of living (a little) dangerously. That said, the fund has done just fine.
My dear friends and colleagues – wishing you happy holidays and the best for 2019
(Below: Tarana is far right, second from the top; below that — Nikhil and I having survived David’s Bridal)
Eat Drink Son Daughter: A Saturday Morning In The Kitchen
It’s a recent September Saturday morning and I’m by myself in the kitchen thinking about a 1990’s movie from Taiwan. The sun is up, a window is open. The sailboats from the 79th Street boat basin are moored well past 100th Street, and the West Side Highway is weekend morning quiet.
I’m making an omelette, eggs scrambled into a mixing bowl, the other ingredients chopped or sliced in their own little plates waiting to be poured into hot oil one after the other, the order and timing based on size, protein and fat content (how quickly they cook), trying to coordinate each being done just right so the ingredients in the omelette will arrive at done-ness all at the same time.
Kitchens are the best chemistry labs. All of the ingredients are in the pan now, melding together. Fatty acids separate from glycerol from contact with the hot oil. Proteins unfold and unwind in what used to be the nuclei of the eggs. I lower the heat, run the edge of a spatula around the perimeter of the pan to keep the omelette from sticking, turn on the ventilation fan, open another window and hit the button on the Nespresso machine, pretending I’m making espresso with a burr grinder and the real Gaggia machine that I struggled with for years before sticking it in a high shelf in the pantry. I flip one half of the omelette onto the other, trying but not quite succeeding to make the edges match so that the top melds to the bottom, making it into one.
In the movie, a father prepares dinner for his three adult daughters. It’s a Sunday, he does this every week. While he collects vegetables from his garden, strips leaves from various plants and grinds them into spices and arranges a drum set’s worth of kettles and pans and pots over the stove over a huge stove, we learn about each of his daughters, and the challenges they face. Gradually each makes her way home. They eat together, plates of food and words and smiles and raised eyebrows crossing the table rapidly, managing never to collide.
I’ve seen the movie a couple of times. It’s more of a still photo than a film for me, the four characters pausing life for a couple of hours and recharging their energies together. It’s a beautiful image, and one that means much more to me now than in 1994, three years before Nikhil and six years before Tarana.
It’s a good omelette. I clean up and head out, feeling content in that sunny and breezy September morning way. Nikhil and Tarana are both settled in their new homes, working and studying and moving forward. I’m thinking about cooking and kitchens and making sure that they keep coming back.
A Violent Encounter With Transparency And Other Adventures In Biotech Fund Management: My Unofficial Investor Letter 2017
Reliable Deli is on the north side of East 54th Street, midway between Park and Madison. It has a rust-colored awning with white lettering, with a string of Christmas lights strung around its edges that blink on and off year-round. I've gone there four or five times a week to take out breakfast or lunch for the past 8 years. It's a bustling place, one of those places where you can get hot food, cold food, toothpaste, batteries, boxes of cereal, sandwiches, wraps, spicy Korean chicken, fake crab meat, and real duck. Deep metal pans under heat lamps. Sneeze shields over the buffets.
You get the idea.
Reliable has two tall glass doors that can swing in or out, like saloon doors, only much thicker and much heavier. One day this summer I must have had difficulty deciding which way I wanted to open the door so I just walked into it as if it wasn’t there. Right knee and forehead met the thick, thankfully shatterproof glass while I accelerated from a standing start. I bounced off the door, shook my head back and forth like a puppy hearing itself bark for the first time, while soaking up the collective concern and secondary embarrassment of everyone inside.
The staff sprung into action. A small stack of clean napkins was quickly applied to my forehead. A first aid kit appeared, its contents probably long expired. A heavily accented New York voice repeated over and over: “Get him to an emergency room. He needs an MRI. I'm a nurse. I know”
I had no intention of going anywhere except back to my office across the street. I felt okay. I am not a stranger to concussions, having suffered one while ice skating with my son years ago, and I somehow knew that the door had enough give to have not made my brain rattle around inside my head. The skin on my forehead, however, was not so fortunate. Just to left to the midline on the mild frontal bossing over my eyebrow there was a terrific gash, the result of the impact followed by a little bit of a smush and tear. I folded the stack of napkins to hide the soaked-through part, applied pressure again and this time successfully exited Reliable Deli.
I was quite a sight in the elevator, going back to the office, holding a white plastic bag containing the styrofoam container with my lunch in one hand and the other hand pressing the folded stack of bright napkins against my forehead. Thirty minutes later I sat in the exam room of a nearby urgent care center. A half hour after that I am back on the sidewalk, having replaced the paper dinner napkins with a folded stack of sterile gauze pressed against my forehead, dismissed from the Urgent Care Center and directed to the nearest emergency room. (“Too deep. And you need an MRI.”) I stood on Second Avenue, left hand against head, right hand holding cell phone, speaking to a helpful representative of my insurance company, who reassured me that as far as United Healthcare was concerned, I could choose between the equidistant emergency departments of Cornell Medical Center and NYU Medical Center, confident in the knowledge that my co-payment, deductible, access to care for the rest of my life, and future list of pre-existing conditions would be the same.
I went north to Cornell. “I used to work here,” I said over and over, eliciting a flash of semi-interest from the security guard at the door, the triage nurse, the admitting nurse, the intern who took my history, the attending who retook my history, and the volunteer whose job seemed to be to observe me for any signs of rapid cognitive decline.
I turned down the MRI and was content to let the intern place four interrupted stitches (it may have been silk or vicryl but I forget) into my forehead, although I was offered a plastic surgery consult. At that stage in my training, I could have thrown those stitches in my sleep. The intern’s handwriting was good so I figured his hands were steady.
I returned to the office with a bandage wrapped tightly around my head, returned to the ER a few days later to have the stitches removed, filled out a nice evaluation online about the quality of my treatment at the hospital, and ignored the monthly solicitations for donations that came for the rest of the year.
The next day, I was a celebrity at Reliable. Breakfast was on the house, as was lunch. The cashiers, the short order cooks, the stock guys all greeted me with warm smiles and curious glances to the scar on my forehead. Menus were taped on the glass doors at eye level.
I made a point of joking about the incident and repeating over and over again that I had been careless and preoccupied and stupid and that it was my fault. And that I was fine, no crazier than before, no ringing in the ears, and certainly no intention of talking with a lawyer.
After a few weeks, the menus came off of the glass doors, and the customers of Reliable Deli were again trusted to use their hands or back sides to enter and exit. The scar slightly to the left of the midline just above my eyebrow faded away. The Intern, who by now has rotated to the Intensive Care Unit or to one of the med-surg floors, had done a good job. Whatever acute or chronic damage that my brief violent encounter with the glass door may have caused will forever remain undetected by the MRI scan that I refused to have done.
Every semester, as my students get to know me better, their questions get more and more personal. Towards the end of each semester I get asked wisdom questions, about success and happiness. I’m no expert, but I do think that humility and the ability to laugh at yourself are good places to start. Also: the fund did just fine this year.
Distracted by a report by an analyst I do not know about a company I do not own in an industry I do not cover, with Claudio Arrau playing Chopin in my head, oblivious to a truck backing out of a hidden garage, I felt the nudge of a fellow pedestrian’s shoulder just in time to look up and veer out of the way.
It’s a relief when unseen forces erase danger, reinforcing that child-like feeling that God or the government or some all-knowing future mentor exists, solely for my protection and guidance.
Of course before I reached Fifth Avenue the magical thoughts were gone and I knew that I had better keep either my eyes or my ears on the road ahead. So I clicked away the analyst report and let the music play.
I like Chopin when played on an almost out-of-tune piano half an hour before last call in an nineteenth-century Parisan tavern, drunken and romantic. My near collision with the truck coincided with the horn fanfare that transitions the Andante Spiniato to the Grande Polannaise. Soon after the piano returned: a sad song from the right hand balanced by ringing, triumphant chords from the left. The two themes danced around each other, sorrow and triumph; the pianist taunting us with almost-missed entrances and barely audible notes. The music floated to an inevitable conclusion of sprints up and down the keyboard, and grand chords that pushed open the revolving door to my building and made me smile. I arrived at work, chastened for my inattention but grateful that triumph and sorrow together can still equal joy.
Van Gogh and Prime Numbers, Manhattan Preschool Admissions and Long-Lost Love in the Netherlands: Investor Letter 2013
Before I summarize the 2013 fund performance, a brief anecdote:
Tarana was four.
We sat at the kitchen counter, admiring Van Gogh's "Starry Starry Night" on a computer screen. Using crayons and old stationary, we each drew our own versions. Although I stayed within the lines, Tarana saw and better captured the wonder of Van Gogh's swirls, and while we used the same crayons, her colors more closely matched his.
When we finished, I wanted to expand the moment, to create an experience -- one that she would remember (and that we could use to illustrate her creative early childhood when the time came to fill out Manhattan preschool applications.) I played and told Tarana about Don McLean's "Vincent" -- but that failed to make an impression on her, and reminded me how depressing the song sounded on the radio when I was twelve.
Tarana ultimately made it into a good New York City kindergarten, no clumsy help from me needed.
Regarding the fund: 2013 was a good year.
My thoughts about 2014? The number suggests stability. It is equidistant from the nearest two prime numbers, 2011 and 2017, and the two nearest sets of twin prime numbers, 1997/1999 and 2027/2029.
Volatility emerges when you dig a little deeper; 2014 sits far from the midpoint between the average of the prime number squares on either side. The average of 43 squared and 47 squared is 2029.
We won't know how predictive any of this analysis is until 2015 (a number whose prime factorization -- 5 x 13 x 31 -- adds up to 49, the square of a prime, a characteristic that I prefer to ignore for the time being) but it's as predictive of the coming year as any other macro trend I have heard of or read about.
So, to sum up--
2014: stable, but with an underlying instability that may take fifteen years to resolve.
Meanwhile, in August, at the Kröller-Müller Museum in Otterlo, the Netherlands, Tarana stood for a long time in front of "Country Road in Provence by Night," a painting that -- for reasons possibly related to something she saw or heard as a young child -- she seems to love as much as I do.
Which suggests -- to me anyway -- that even with a macro strategy based on primes, twin primes or squares of primes, something beautiful eventually happens when you share your stars, your swirls and your colors with someone you love.
To my dear friends and colleagues-- wishing you happy holidays and the best for 2014 (prime factorization 2 x 19 x 53.)
David Sable MD
writer, teacher, fund manager and retired reproductive endocrinologist