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Tuesday, August 03, 2010

A Drunkards Walk

'A Drunkards Walk' was a fine read. The reason it has resonated so much with the CCS is due to the randomness of the biotech business model. In our science, desired outcomes make everyone happy. When outcomes are not favorable, the laboratory technician who ran the experiment, the statistician, clinical trial doctor..., is grilled to determine what he/she did wrong. Does the desirability of results bias the judgment on experimental outcome?

In a Drunkards Walk the relationship between randomness and our interpretations of life are explored. On one hand, we have got some serious scientific problems when it comes to biology level scientists trying to distinguish between random and non-random events. But the scientists don't really put a company on the map. Investors do, and we need them to be ignorant of the lessons taught in "A Drunkards Walk".

Check out this comment from a biotech company yahoo finance message board: "@#$%^&* will either hit a home run or will be made to look like an idiot. Either way, I am still invested. Lottery ticket, hopefully a payout. I have lost before."

Thank you for investing sir.