Hello and happy Friday, readers! This is Sy. I hope you’ve had a wonderful week.
The finance world has been watching the crackerjack rise of bitcoin, the digital cryptocurrency phenomenon, with a combination of fascination and, in many cases, severe skepticism. Bitcoin is currently trading at around $16,000; at the beginning of the year, it was at $1,000, raising warnings from some analysts and prominent financial figures that it’s a bubble. The currency is extraordinarily volatile despite its recent ever-peaking performance, rising by thousands of dollars in value on one day only to fall by even more the next. Which raises the question: For an investor, what does holding on to such a volatile asset do to mental health?
Financial decision-making is among the most stressful processes out there. And, when it comes to high-risk, high-reward investments like bitcoin, an investor may go through a roller coaster of emotions. As the cryptocurrency specialist site Bitcoin.com notes, there’s been at least one story about an investor who committed suicide following a deep depression about a bitcoin investing strategy gone awry; following bubble bursts and market crashes (a distinct possibility with bitcoin), visits to mental health professionals rise as economic anxiety balloons.
One of the most stressful parts of high-risk trading is the oscillating emotions. For instance, there is evidence that “decision-makers in a happy mood have higher levels of financial risk tolerance, holding bio-psychosocial and environmental factors constant,” according to a 2017 study by British researchers. In other words, there can be a short-term tendency to “buy on the emotional high,” particularly among less experienced investors.
But those emotional peaks can be followed by deep troughs, particularly when considering a relatively new product whose value may whiplash. There’s also financial FOMO (“fear of missing out,” for the non-millennials) and the hindsight effect of selling too early or too soon. With a digital currency like bitcoin, there’s also the added risk of potential hacks that can wipe out billions in value.
Those are mental and emotional realities of risky trading. And minimizing the psychological toll of financial stress may boil down to asking three basic questions, writes Paul Merriman, founder of Seattle-based Merriman Wealth Management: 1) Have you lost sleep over an investment?; 2) Do you constantly, compulsively follow the financial news over an investment?; and 3) Does watching financial news make you worry about your future? “If you answer yes to even one of those questions, you probably have taken on too much risk,” says Merriman.
Read on for the day’s news, and enjoy your weekend.
CRISPR used to turn genes on without editing genome. We’ve written often about the rise of the revolutionary CRISPR gene-editing technology, which can be used to do everything from growing massive tomatoes to nixing genetic diseases. Now, scientists have used CRISPR to unilaterally turn on specific genes in mice without having to actually modify the underlying genome. (Los Angeles Times)
Teva may cut up to 10,000 jobs in massive restructure. Embattled generic drug maker Teva may be planning to axe a staggering 10,000 jobs, according to a report in Bloomberg. That would be more than 15% of its global workforce. New CEO Kare Schultz is attempting to right ship at the Israel-based pharma giant, including by planning to cut debt by nearly $2 billion over the next two years. Schultz has also shaken up the top executive ranks at the company in recent weeks. (Bloomberg)
Philipines seeks refund from Sanofi amid dengue vaccine concerns. The fallout over French drug maker Sanofi’s dengue vaccine continues as the Philippines seeks back $59 million it had paid the company for the treatment, Dengvaxia. “We will demand the refund of the 3 billion (pesos) paid for the Dengvaxia and (demand) that Sanofi set up an indemnification fund to cover the hospitalization and medical treatment of all children who might have severe dengue,” Health Secretary Francisco Duque said Friday, according to Reuters. The Philippines were conducting a mass immunization campaign against dengue with the vaccine; but then, reports emerged that it may actually make the condition worse in certain people who have never been infected before. Sanofi has said it is cooperating with investigations and points out there have been no deaths reported from Dengvaxia use. (Reuters)
THE BIG PICTURE
Will Susan Collins really get her Obamacare deal? Maine Sen. Susan Collins, a moderate Republican, was one of the three GOP members to scuttle Congress’ Obamacare repeal efforts over concerns that it would hike premiums and lead to coverage losses while reshaping Medicaid. But Collins voted for the Senate’s tax plan—which also targets Obamacare by nixing its insurance mandate—after receiving assurances from President Trump that a “stabilization” bill for the program would also clear Congress. Now, those assurances are in question, especially as House conservatives balk at the idea and House Speaker Paul Ryan emphasizes he wan’t party to the ostensible concessions wrung by Collins. (Politico)
Why All CEOs Should Visit China, by Adam Lashinsky
GE Is Laying Off Thousands of Workers, by Jonathan Vanian
The 5 Best Fintech Stocks to Buy for 2018, by Jen Wieczner and Scott DeCarlo
Here’s What the U.K. and the EU Just Agreed to On Brexit, by David Meyer
|Produced by Sy Mukherjee|