Healthcare is a huge part of our economy. But innovative technology doesn’t equate to great investment potential and guaranteed wealth! There are issues of practicality, usefulness, and acceptance. Everything has to be evaluated within the reality of reimbursement, expenses, regulation, and cash flow – to balance the investment potential with the intrinsic value of the service or product, and the longer-term management capabilities. Sometimes we fail to deliver better healthcare, not because a treatment doesn’t exist or science can’t develop one, but because a company can not survive the logistics of access, delivery, and sustainability. Good business is investing in tools and activities that can achieve ideas and implementation… In Sickness and Wealth… as we explore innovative companies and how they deliver value.

Our Mission

LEARN     The primary goal of In Sickness and Wealth is to uncover investments in extraordinary companies at the cutting edge of the $3 trillion health care industry—across all segments including biotechnology, pharmaceutical companies, diagnostics, medical devices, medical services, equipment, instrumentation and several others. It is our hope that we can provide keen insight into these companies while balancing the potential reward with a frank discussion on risks. We also will search out candidates that have the greatest potential for long term capital growth, attempting to be long term investors, and trying to emulate Warren Buffett whose favorite holding period is “forever.” Many of our holdings have been held for five to seven years, some for much longer.

INVEST     In Sickness and Wealth will have “skin in the game”. Al Frank, one of the most successful newsletter writers ever, was the editor and publisher of The Prudent Speculator. An intriguing feature of his newsletter was the inclusion of his own personal portfolio. Al didn’t just discuss stocks like many newsletters do. He actually invested his own capital and posted his personal portfolio details each month—he ate his own cooking. The editors of this publication will do likewise. While we stop short of formal recommendations, we will post comments about personal purchases/sales and regularly reassess the investment thesis on companies of interest. Our coverage universe may contain hundreds of companies; but not all will make it into the portfolio due to valuation or a change in the company’s fundamentals.

EMPOWER     In Sickness and Wealth also strives to go beyond making money. We will view any investment (potential or actual) as a share in a great business. Investing in such businesses hopefully will lead the reader to a greater understanding of the scientific and medical world in which we live. These companies will be more than mere investments with ticker symbols, balance sheets and income statements. Take, for example the business of Genentech (owned by Swiss firm Roche Holdings). In addition to being a very profitable investment, this biopharma company developed life-altering drugs like Herceptin, a compound that helps battle against a particularly aggressive form of breast cancer in women with the Her-2 gene mutation. Readers will see Illumina Inc. not merely as a stock that’s gone from $40 to $140 in four years (with a high of $240!), but a cutting edge provider of DNA sequencing instruments that are helping unlock the mysteries of the human genome that will ultimately lead to new treatments and cures for diseases.

There is a thrilling educational element to some of these companies and we will attempt to tell the story of extraordinary companies and individuals who have a front row seat in the areas of cancer, heart disease, diabetes, infectious disease and other relevant topics in the healthcare space.

Astrophysicist Janna Levin once wrote that,

Science without storytelling collapses to a set of equations or a ledger full of data.”

Certainly we will examine investment merit through evaluation of data and science, but only in a relevant manner. As an example we might go ”light” on the pharmacokinetics of Vertex’s Kalydeco, and instead emphasize precisely how the drug dramatically improves the lives of those living with Cystic Fibrosis, and the ramifications for Vertex’s shareholders. Beyond the investment thesis, each issue will seek to educate! If we achieve these goals, we will experience the rewarding feeling of investing in an industry that makes a tremendous positive impact on the lives of billions of people while at the same time being schooled in an area that touches every human being at some time in their life. We’d take that trade any day.

About Us

So who are we, at In Sickness and Wealth? Our monthly publication is the joint efforts of David Lerman and Jodie Warner. While David’s background is a bit circuitous, Jodie has an excellent background in many areas in healthcare.

David obtained his Molecular Biology degree at the University of Chicago where he worked in the lab of Niza Frenkel, one of the foremost virologists in the world. One of his primary duties was to isolate DNA from viruses–that would subsequently be used in experiments leading to new discoveries about how viruses behave, how they multiply and how they cause disease. He had the good fortune to be surrounded by exceptionally intelligent individuals, as one of his lab mates was Ann Kwong who became a PhD and the co-developer of Telaprevir at Vertex Pharmaceuticals (the team that achieved a cure for Hepatitis C, a chronic condition that can have devastating effects on the liver).

After four years at Baxter, he decided the laboratory wasn’t for him, and took his avocation, investing, and turned it into a full time career as a portfolio manager/trader for a small money management firm, Zavanelli Portfolio Research. He then became a market maker on the floor of the Chicago Board of Trade. After four years of yelling and screaming in Chicago’s trading pits, he received the opportunity of a lifetime, to work at the Chicago Mercantile Exchange — where he remains. During those years he wrote and published a book, Exchange Traded Funds and E-mini Stock Index Futures, and he was also an adjunct professor at Harper College where he taught investment management. At the CME, he works with the largest pension funds/endowments and money managers in North America. He also conducts 401k seminars for CME Group and produced and edited the company’s quarterly 401k newsletter to employees.

Despite the career transition from science to finance/investment and derivatives, David’s interest in medicine and healthcare continues to this day. Over the decades, his knowledge in these fields combined with his love for investing, has brought terrific rewards. We look forward to sharing this great passion with subscribers who have similar interests.

Jodie pondered, “What college major prepares someone to cure cancer?” and chose chemistry. But she ‘found’ her career on a bulletin board in the Life Sciences building – a Medical Technology poster – that promised a major that didn’t force her to choose between chemistry and biology. Much to the dismay of her chemistry advisor, she turned down an undergraduate research position and defected from the ‘pure’ sciences to pursue a more ‘vocational’ major in laboratory medicine. She reveled the synergy and practicality of experiencing her classes as she worked – anatomy as she assisted an autopsy, genetics to crossmatch compatible blood products, microbiology to isolate infectious agents, and molecular biology to identify microscopic cells.

Despite the opportunity to attend medical school, she once again rejected the logical path. She wanted to do more than see patients; she wanted to cure them. The concept of pursuing an MD/PhD escaped her, and scared of the financial commitment, she instead used the solid foundation of the science and analytical skills she had already banked, to explore a broader range of other problem-solving careers. Information technology (Y2K, interoperability, and paperless systems), academia (teaching phlebotomy techniques), and business management (“margin for the mission”) were jobs that revealed the importance of balancing perspectives – not losing sight of the big picture while staying focused on the details. She expanded her view beyond the narrow focus of her microscope by pursuing an MBA from the University of Notre Dame and traveling to China. This helped her gain a better understanding of the global economy and how everything is interconnected.

A fortuitous exchange of business cards during a chance meeting led Jodie to question how a Molecular Biologist wound up an expert on Exchange Traded Funds… and left Dave wondering why a Lab Scientist from a rural hospital was studying Global Finance and the balance sheets of volatile biotechs.

Together, Dave and Jodie offer an attractive combination of unique talents. A few years ago when Jodie shared with Dave, a small company named Illumina and how it was going to revolutionize genomics and the way we look at disease, Illumina was trading at $40 per share. Dave wasn’t convinced. But he did suggest she quit her job and go to work as a research analyst for a Wall Street firm or a Hedge fund and triple her salary. She countered: “I have a better idea…let’s start a publication dedicated to finding and investing in great companies in healthcare.” And it was then, the idea for In Sickness and Wealth was born. (By the way, Illumina’s 52-week high has since reached $242 and traded at four times the price of a few years ago when they first had that discussion.)