Investors Turn to Drink

Plus: Robots in your brain can be a good thing ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

November 28, 2022

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Good morning.

What recession? Judging by this holiday weekend’s shopping habits, Americans aren’t too worried about facing one anytime soon. Shoppers hit the retail shelves hard on Black Friday, pushing overall sales to a record $9.12 billion, according to new data from Adobe Analytics.

And that’s just half the story: putatively penny-pinching shoppers are expected to spend another $11.2 billion on Cyber Monday sales today. For retailers, it’s beginning to look a lot like a pre-inflationary, pre-pandemic, pre-all-the-bad-stuff Christmas.

Morning Brief

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A startup has big plans for tiny robots.

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Inflation is giving rise to a new, boozy alternative investment class.

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Tobacco prices could increase in the EU.

Health

Tech Company Wants to Cure Brain Ailments with Teeny Tiny Robots

If this were The Matrix, you wouldn’t want a robot climbing into your head. Now imagine if instead of trying to suck the life out of you, they were robotic life-savers.

The team that created Apple’s Face ID is on the verge of a game-changing medical development – robots smaller than a fingernail injected into the skull to deliver drugs directly to the brain, with no overspill to the rest of the body.

Fantastic Voyage

The tech and concepts behind Bionaut Lab’s latest projects are like something out of a pulp sci-fi novel. Robots only a few millimeters long will be shot into patients’ craniums. Using magnetic propulsion, the little droids will navigate to the affected area of the brain, release medicine, and then make their way back to the needle site for extraction. Leader Michael Shpigelmacher told the Financial Times he got the idea when he thought about how most pills and inoculations are circulated throughout the entire body, occasionally causing nasty side effects.

Shpigelmacher previously co-founded PrimeSense, an Israeli 3D sensor company that developed the tech for the Xbox Kinect gaming peripheral, and the business was bought by Apple in 2013 for $400 million. Looking to do something “more meaningful,” he left the consumer electronics business. His new LA-based startup just raised $43 million for the first round of clinical trials with investors including Israel’s Deep Insight and Canada’s Sixty Degree Capital.

If a medication is to be delivered to one very specific, hard-to-reach spot, without damaging other parts of the body, a robot would have to get the job done:

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Bionaut’s initial trials will target brain tumors and the rare pediatric neurological disorder Dandy-Walker Syndrome, which causes large cysts to form on the cerebellum. The goal is to one day treat much more complex but common issues like Parkinson’s, Huntington’s, Alzheimer’s, and strokes.

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The FDA has already granted approvals to help accelerate the clinical trials, and previously skeptical medical experts are seeing the potential.

“My biggest concern when I hear of any technology is: is it going to be deployed safely?” neurosurgeon Iahn Cajigas González told the FT. “And everything that I saw when I visited their facilities shows that they really are very meticulous at every stage of the way. So I think it would fill a very important niche.”

I, Robot: Bionaut Labs will be riding a wave of robotics-based medical breakthroughs. In September, a study at the University of California San Diego found that microscopic robots injected into the lungs of mice were effective at safely treating pneumonia and resulted in 100% survival rates. Also, Cornell University recently developed microscopic robots that can move autonomously and possibly navigate human bodies, identifying healthy cells and killing bad ones all on their own. Let’s hope they follow Asimov’s first law of robotics.

Alcohol

Prices of Rare Scotch Whiskies are Surging

A bear market worthy of the Leonardo DeCaprio movie The Revenant is driving investors to drink, if not quite literally.

“Fine and rare” single malt whiskies have exploded in price this year, according to a new report from Scottish investment bank Noble & Co — which means buying a boozy gift for your favorite uncle (or a gift to yourself to help survive your least favorite uncle) just got a lot more expensive.

Whiskey and Broke

While wine has long been viewed as an alternative asset class, bottles of whiskey, Scotch whiskies in particular, are quickly emerging as investors’ new beverage of choice to shield their portfolios from rampant inflation and volatile market conditions. Scotch whisky has long been a central piece of Scotland’s £15 billion food and drink industry accounting for 75% of all food and drink exports from UK-constituent Scotland, and 22% of all UK food and drink exports last year, according to the Scotch Whisky Association.

This year’s post-Brexit meltdown and subsequent cost of living crisis have made a bottle of GlenDronach even more appealing to exhausted pub-goers and investors alike. That has helped fuel a massive increase in the prices of scotch whiskey, according to the Noble & Co. report, which tracked roughly 580,000 whisky auction transactions over the past 10 years. The industry’s biggest players never imagined the short-lived reign of Liz Truss would produce such commercial bounty:

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Following Truss’s much-maligned tax-slashing, pension-squashing, pound-sinking “mini” budget proposal in September, Elite Wine & Whiskey, which provides clients with investment-grade whisky, told the Financial Times it saw an entire quarter’s worth of demand in just six weeks.

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Overall, prices of “fine and rare” single malts have jumped 23% year-over-year, according to the Noble report. Meanwhile, the volume of bottles priced between £100 and £1,000 has increased 30% in the first nine months of the year compared to 2021.

Bubble Trouble: The UK has long circulated a massive trade deal with India as a sort of consolation prize for leaving the European Union — creating billions of potential new customers for UK spirits exporters. But some worry the long-stalled deal has propelled whisky’s value, creating something of a bubble. Should the trade pact ever see the light of day, at least someone not in politics may finally benefit from Brexit.

Sponsored by The Motley Fool

Meet the “Netflix Killer” Stock

In recent years, Netflix was one of the go-to blue-chip stocks for any investment portfolio… but between recent market downturns, rising competition, and shifting consumer behavior, that may all be changing.

So, what will take Netflix’s place? The Motley Fool says this company is potentially in prime position.

Here’s why:

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PwC estimates revenue from media and entertainment will reach $2.9 trillion by 2026

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57% of Americans rate “variety of content” as a streaming service’s most important feature (not great for the ‘Flix, which is losing shows to Disney+, HBO, and others)

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This company benefits from every user that ditches cable for streaming – no matter the platform

So, what is it? You’ll have to check out The Motley Fool to get the full rundown, but here are some key details:

It’s a company that sits in the middle of the advertising market, which is 10x bigger than the online streaming industry. It’s 1/40th the size of Google, meaning there’s serious room for growth. And finally, it’s a relatively-unknown name in the industry, meaning the price hasn’t been driven up by name-brand demand.

If that doesn’t have you excited to learn more, we don’t know what will.

Tobacco

EU Likely to Raise Tobacco Taxes to Suppress Smoking

Butt out or pay up.

The EU is set to propose stronger taxes on cigarettes and its first union-wide excise levy on vaping and tobacco-warming products, according to a draft European Commission document, curbing smoking habits, and opening gobs of new tax revenues.

Smoke-free Zone

Belgium is leading the charge as the EU tries to reach a goal of a “tobacco-free generation” by 2040. The concept is simple — if you increase the excise levy (the tax to manufacture cigarettes and vapes), tobacco companies will likely raise the cost to buy their products, and hopefully dissuade a new generation of kids from picking up smoking in the process.

In countries like Greece, Bulgaria, and Croatia, tobacco products are cheap compared to other EU nations. A 20-pack of Marlboros goes for $3.30 in the Land of Roses, and nearly 40% of Bulgarians are smokers. In contrast, cigs in Ireland go for $15.85 on average, and about 21% of the population are smokers.

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The legislation would increase the minimum excise duty on cigarettes from $1.87 to $3.74 per pack of 20, which is expected to generate $9.6 billion in tax revenue for the EU. Rob Branston, an economist and member of the University of Bath’s Tobacco Control Research Group, told the Financial Times a tax update was “long overdue” and the “most effective tool for reducing tobacco use.”

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There currently isn’t an EU standard on excise taxes for liquid vaporizers and tobacco warmers, but many groups have been pushing for years to see one put in place. The concern is that they’re more attractive to younger, first-time smokers. Earlier this month, the EU banned flavored heated tobacco products after an uptick among younger consumers.

You’ve Got a Long Way, Baby: Of course, no matter the cause, there’s always a lobbyist looking to prevent new legislative efforts. Peter van der Mark of the European Smoking Tobacco Association told the FT “if you have a sudden very steep increase, you can create a market for illicit trade.” Whether he’s right or just blowing smoke remains to be seen.

Extra Upside

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Whole Foods ditches Maine lobster to the ire of New England pols.

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A Florida woman is suing Velveeta, arguing its mac and cheese takes longer than the 3 ½ minute cook time printed on the box.

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Across every cycle, there are several emerging industries that define the zeitgeist and shape the environment. More often than not, these phenomena have massive economic implications (think Steve Jobs introducing the iPhone, 2007). To stay ahead of the curve, we like to stay sharp on what’s happening at the bleeding edge — which is why we read Quartz Daily Brief. Converging at the intersection of important and interesting, this no-cost newsletter delivers delightful analysis on emerging markets across the global economy. See why it’s trusted by half a million business professionals — sign up here.

Just For Fun

Cool cave.

Confidence.

Written by Griffin Kelly and Brian Boyle.

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