The Rule Breaker portfolio eked out a 1.35% gain, Monday, thanks to a single stock. Otherwise, the portfolio would've been, like the Motley Fool NOW 50 (off 0.46%), down today.
Fighting against the downstream like a powerful riverboat paddler soloing his way up an angry Mississippi was Celera Genomics (NYSE: CRA), our incredibly volatile December 1999 investment that was purchased at $39, spiked (with the help of a huge short squeeze) to over $270 for a lightning flash, dropped off a cliff in the face of possible government interference in March, plummeting to $50, and then rose 34% today ($23 1/2) to $92, re-establishing our double. That is, the close back over $78 marks our having doubled our money in this investment. We're not unused to watching moves like what you've seen with Celera, though it must be said that Celera is about as volatile as a midcap comes.
Of course, in and around that price volatility, we have watched a small and growing group of scientists, computers, and MBAs struggle to map the genome in head-to-head competition with the government's Human Genome Project. Certainly, it's amazing to consider there was any competition at all.
In 1998, Dr. Craig Venter said he could begin and finish mapping the genome in just three years, and at a fraction of the government's expenditure on the publicly funded (read: your money, too) Human Genome Project. Now let it be said that the government has wasted and continues to waste far more money on things of much less value than our genetic code; from this standpoint, I find the Project worthwhile.
At the same time, as an investor, and as an entrepreneur, I am frequently looking to invest in opportunities where the primary competition is just the government. That's because government is inefficient and its workers lack grand incentives, whereas the individual entrepreneur and part-owner employees have tremendous incentive and therefore work like heck to be as efficient as possible. Fewer committees, too -- that always helps. (Gratuitous Motley Fool Tip for Life #438: Beware of all initiatives catalyzed by, or requiring, "steering committees.")
What Venter has done is what he stated he would do, and press reports now indicate that Celera is prepared to make the announcement of having mapped the human genome -- all the gene letters in place, end-to-end, constituting each of our 46 chromosomes (23 pairs) -- this week. Perhaps Wednesday at the latest. This would, as the BBC puts it, "pip" the international team of publicly funded researchers.
I expect there are many people -- given the amount of trading volume and volatility, there would have to be many -- who are holding CRA shares purchased over $150 or $200, who may not find so much solace in one day's trading that puts the shares back over 90 bucks. This said, if you're investing patiently as a Foolish business-focused investor, you would have to continue to be encouraged by the research success and positioning that Celera has achieved. Only the latest example is this week's cover story in BusinessWeek magazine, with Dr. V right there on the front page.
In fact, rather than blather on anymore in what was otherwise an unexceptional business day, I will suggest that the Foolish investor click that link and read the article. Your time will be very well-spent, if you're someone looking to understand the most revolutionary technology the world has ever seen. Read of Venter's vision, of his having been frustrated by many in academia who said his ideas wouldn't work, of his eventual success, and of the feelings he'll likely continue to encounter from people working within and without the Project for whom every additional Venter success represents a condemnation of their own naysaying.
We continue to stay invested in Celera because we are business-focused investors. And I can think of few more interesting, relevant, or dynamic businesses to be a part owner of. Celera is showing early indications of weaving its way into the Zeitgeist in the same way that America Online and Amazon.com have (in another relevant technology).
Here's that link, again: Venter's Face.