Macro Dragon: Putting Compass on the Map… Mycelium, Magic Mushrooms + Psychedelics for Medicine & Treatment 

Top of Mind…

• We covered wk ahead yest – Macro Dragon: WK # 39… Flash PMIs, Nike, Costco, RBNZ, Turkey, Norges Bank + Mnuchin/Powell

• As a refresher INIL, is the moniker Invest Now, Investigate Later – its supposed to be attributed to the leviathan, Soros (like all legends, you don’t need the full name!). The idea is that often you come across something that has the makings/sound/look of a truly compelling investment… yet for whatever reason, you may not currently have the time & bandwidth to look deeply into it…

• So you put an INIL on, which is dipping your toe into it. If your initially wrong, that’s ok.. you dipped a toe in, cost is minimized. Yet once it’s in one’s portfolio, one greatly magnifies the probability of doing the detailed work to really decide whether its likely a dud or falls into the “too hard bucket” that needs to be folded, or is in the “buy it like a piggie” bucket, & hence one needs to massively upgrade the exposure.

• We’ve discussed the Cannabis revolution c. 2yrs back [still very much in motion & a multi-decade theme, cannabinoid, edibles, drinks, globally deregulation & education, greater tax for governments, lower crime, medicine over drug, etc], yet KVP has been on the look-out for the investment theme of psychedelics for a long time – especially in the potential treatment of depression, likely a multi-trillion problem globally.

• A lot of people don’t realise that the modern day healthcare & pharmaceutical business model is built around trimming the weeds of diseases & ailments, but not in uprooting the problem – simply due to profitability. Why give a permanent treatment for $100,000 when one can charge $25,000 a year for “treating” the subjects for the rest of they life? The pharma drug business is the ultimate bond coupon business…

• Hence when Compass Pathways [CMPS] – backed by the likes of Peter Thiel, Mike Novogratz, Founders Fund & Christian Angermayer (authority bias alert!) – went public last wk, the Dragon took note.

• Like most IPOs of late [Snowflake & Unity], it was priced better than expected at $17 post a range of $14 – $16m, then popped +71% on its first day to $29.

• Taking the company to a $986m mkt cap, after which it had raised close to $130m – most of which has been earmarked for clinical trials & research. Just to give context on mkt size, goliath Pfizer is $204bn in mkt cap, so yes similar to BYND, TSLA… CMPS likely will always have a potential take-over optionality attached to it.

• Whilst psychedelics have a tainted narrative (think Nixon & Reagan political drug propaganda that also coincided with the hippie era) & most seen as recreational drugs, there are medicinal natural uses going back centuries & spread out across different cultures around the globe (think mushrooms, DMT).

• For a period of close to 50-60 years there has been a vacuum & black hole of research in the space, that is now rapidly trying to catch up on time. For some clinical depressive patients who have been on heavy medication for decades, they have called some of these treatments tens years of therapy in one session.

• So whilst KVP still needs to dig much deeper into Compass Pathway, in regards to the theme, of psychedelics becoming part of mainstream medicines & treatment over the next five to fifteen years, he is a mega-bull.

• Here is the link to the Compass Pathway prospectus

• Here is the link to their site

• Here is one of foundation pieces on getting a mini-primer on the topic: Paul Stamets — How Mushrooms Can Save You and (Perhaps) the World (#340)

• Tim Ferriss driven documentary on this.

• Goes without saying, like any industry that is in the pioneering stage, there will be a lot of risk, noise, charlatans & vested interests both for & against it.

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On The Radar Today…

• JP: Still out on public hols, will be back in on Weds

• US: Existing Home Sales, Richmond Mfg. Index, Powell Testifies @ 22:30

• UK: Public Sector Net Borrowing, BoE Governor Bailey @ 15:30 SGT

• EZ: Consumer Confidence

• CH: CB leading index

  Note Wed will be flash PMIs across the board

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Dragon’s Must Reads…

• For the equity & equity tech fans – Eleanor Creagh highlighting Ant Group to join IPO rush

  Ant Group, China’s dominant mobile payments firm, are set to dominate the listed fintech space with their upcoming, humongous, record setting IPO. The Chinese fintech company founded by former Alibaba Group Holding (BABA) Executive Chairman Jack Ma operates the e-commerce giant’s Alipay payment service and could be the largest IPO ever when it dual-lists on the Hong Kong and Shanghai’s Nasdaq-style STAR Market exchanges later this year..

• John Hardy dropping a roadmap US Election Primer: The Final Sprint to November 3rd
  

  We sort through important dates in this final sprint phase of the absurdly long US presidential election cycle. Historically, we have seen significant shifts in the polling in the final weeks leading up to the election. As well, we consider factors that can change the odds between now and Election Day on November 3rd.

• Saxo’s US Election Cheat Sheet Which cuts into the three potential pathways into the elections, probabilities around them, as well as short & long-term positions across equities, bonds, commodities & currencies.

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Start-to-End = Gratitude + Integrity + Vision + Tenacity  | Process > Outcome | Sizing > Idea.

This is the way 

KVP