23andMe Takes on Long Covid Impact

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News her company. You might recall a Business Week cover story back in November about how twenty three and Me wants to use its customers genetic data to beat cancer. It was a fascinating story when we think about innovation disruption when it comes to treatments,

especially when it comes to cancer. We've got with us and Wichiski, the co founder and the CEO of twenty three and Me and joins us this afternoon via zoom from Las Gatos, California. And how are you. I'm good? Are you? We're doing well? Thanks, it's really good to have you with us. I want to get into everything that you're understanding when it comes to COVID and long

covid via twenty three and me. But first I want to just get your get your thoughts on what we're seeing with the macro environment, with the volatility in the stock market. We should note a year to date shares of twenty three and me. Uh, down about give us your take. Oh well, that's that's that's a big question. UM. I mean, look, the markets are definitely complicated right now, and I think that you know, it's as coming from the Wall Street world and now being the CEO of

a publicly traded company, UM, it is. You know, it's it's interesting that twenty three continues to execute UM. I'm incredibly proud of the team. UM. We continue to move programs through the pipeline. UM, you know, make drug discovery. UM continue to UM you know, engage our customers on you know, genomic medicine and where we can go with that.

We recently acquired a company called Lemonade, so it gives us the ability to offer UM care to our customers both through pharmacy as well as to access to care providers. So UM the company has just continued to execute. But obviously market conditions are are challenging. So we're very mindful of the fact that market conditions have changed, and um,

you know, the future is more than certain. So we take all that into consideration now and we want to talk to more about what you're doing, because I feel like we just came back from a conference it was all about the financial world. Um. I was involved in a panel that specifically about what the future of money is, reimagining it, and I think when it comes to things like financial services and certainly healthcare, it does feel like we're on the cusp of doing things so different, especially

when it comes to treatment modalities. Having said that, I just want to go back to the market environment because we're asking all of our leaders this. I mean, when you do have a stock that is down more than six, I mean, what kind of pressure does that put on you and your team who are working on things that are going to take some time. Yeah, you know, I was investing back in sort of when the market crash back in two thousand, um, you know, two thousand one um,

and it took a long time to recover. And I think that there's the way we approach this is really about making sure that we're doing things that are going to um, you know, see see value within near term and you know probably have to to you know, minimize some of the projects that are going to focus on some of the longer term initiatives, but really focus on priorities and and you know, also making sure that you're using cash and the wisest way, so um, all kinds

of things that we start to you know, reevaluate. But you know, it's it's really about making sure that you we you know, we have a very strong balanciet right now and making sure that we um, you know, extend that runway as long as possible, and making sure that

all the programs that we're focused on are really essential. Uh. And I want to get to the research that you've recently found at twenty three and me some really interesting stuff when it comes to long COVID and I think, you know, we're at the point in the pandemic where Caroline I traveling yesterday, at some points I felt like I was the only one wearing a mask on some of those flights in the airport and even at this

conference that we were at. But Long CODE have my mask go back you did too, Yeah, but but we were it was like, yeah, that was it. Um, we were in Texas to be fair, But I do want to know and what you found when it comes to long COVID, because that's something that I think about a lot and one of the reasons why I don't want to get COVID. Yeah. So there's a couple of things

that are really interesting thing for me about this. So first and foremost, you know, the way part of what we conceptualize when we started twenty three and me, and it goes back to some of your earlier questions, was really a whole new way of doing research, Like how is it you can have millions and millions of people engaged on a single platform with phenotypic data, with their genetic information, and be able to go back to them

very quickly, easily ask more questions and make insights. And so this long COVID research that we've done is really a good example of how the twenty three model works. That we could put out a survey to our customers, collect a lot of information and make really interesting and meaningful findings. So one of the things a couple of things here that are are interesting and again being female.

It's obviously top of my mond mind. UM. Over seventy eight percent of those diagnosed with long COVID were women, so clearly disproportionately impacting women. UM. People with depression diagnosed depression and anxiety are more than twice as likely uh to have it, so twice twice increasing their risk. UM. Half of those people are UM, you know, having persistent symptoms for over six months UM, and about ten percent

or having it for over a year. UM. So it's you know, all this data comes from about a hundred thousand customers who reported that they had COVID, over twenty six thousand that said that they had long COVID. So we have a lot of data here, and it's definitely concerning that it's again impact so many women. UM. Anxiety being a risk factor is obviously quite interesting to to follow up further on, and the fact that it's so persistent,

so similar to you and what you just said. I was recently at Lego Land and nobody was wearing a mask but me and I am. I'm sticking to my mask quite quite of my yeah pay airport yesterday, Carols, I've wear this duck mask around and and all our listeners, and this guy at the airport was like, what is that mask? And I had to explain, this thing is actually pretty comfortable. It's go ahead there. I love it.

I love it. No, I think it's just it's it's just clear that there's you know, I this this clear like long term impacts here and so understanding it. There's a lot more to be followed up on with respect to long COVID. We kept saying that milk and we're at the Milk and Institute in April. Um, nobody had masks on and what is the head of Mayo Clinic comes up, comes up, and who's an m D. And he was the only one having a mask, and he kept it on to the interview, took it off for

the interview, and put it right back on. He's like, why wouldn't I wear a mask? At this point? UM, so much more to talk, Please come back soon. We love to hear about the work you're doing because I think it's so relevant to where we are going in the world. Uh. And Sky she's co founder, chief executive officer twenty three and me via Zoom from Los Gatos, California. I did have a mask, and I also I do like to wear it on the plane too, because it

keeps me warm. And then there was somebody like coughing like crazy, and I was like, yeah, but when I was hanging out by the pool, I wasn't wearing it. Now you weren't. I don't wear it out, Can I tell you? He looks so California. I wish I had taken a picture. All right, lots more to come right here on Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So this story is among the most right

on the Bloomberg Today. It's also on the Bloomberg Big Take. It is an excerpt from a new book that's also featured in the new issue of Bloomberg Business Week, which is out on newsstands. You can find it online at Bloomberg dot com, slash Business Weekend on the Bloomberg terminal. It is riveting. I read it in this week's issue of Bloomberg Business Week. The story by Michael Smith and

Jonathan Franklin. It's an excerpt from the new book Cabin Fever, and it describes the panic and despair aboard Holland America's MS Zandem as COVID ripped through passengers and crew. Michael Smith's Projects and investigations reporter for Bloomberg Business Week. He joins us viasume from Miami. Joel Webber is the editor of Bloomberg Business Week. He joins us on the access line from Brooklyn. Joel, I gotta tell you reading this, I felt like I was on the ship and I'm

I mean, there's no other way to put that. It brought me back two years ago and just the terror and horror these passengers felt, oh man, those early days of the pandemic. And it still associates with the crew, the story of the cruise industry and and Carnival and especially the MS um zend MP. And you know this, this book, which were so proud of Mike about Cavin Fever, really began with a Business Week story. But when we got to do the excerpt, we wanted him to to

revisit it and come up with something special. So so Mike tell us about the book and and also the excerpt. Yeah, like you said it, Um, it started with basically covering this story. I was I was just fascinated by and horrified by it as an unfolded um, you know, in the news and on our screens, and then it turned into the excellent UM feature story we did for Business Week, and that basically led to uh, my friend Jonathan Franklin's

who I've known for a long time. His agent called me up when he saw the story and he said, you have to write a book about this. It's you know, it's just an amazing story. It's it's it's COVID, but it's also sort of a story of human survival on the high seas, and it's filmk and all this stuff. So he kind of convinced me to to go for it. And luckily, uh, you know, I had Bloomberg behind me,

and they really accommodated me, starting with Joe Weber. Um, So you know, it started with that, and I just found it to be, uh a sort of a way to tell the story of what we all went through with COVID, but just to the extreme, because that's exactly

what it was. Um. You know, this particular ship left South America on March eight, and about forty five minutes before it left port in Buenos Aires, South America, UM, the State Department put out a warning saying people, especially older people, should not take cruises, and they left port any and the world just started shutting down around them.

And then they discovered COVID was actually on the ship, and we're just stuck out on the high seas as far away as you can imagine from for most of the world as this disease just started picking people off

one by one. Um and uh, and it's just it's just really incredible the more we dug into the what happened, UM, just the individual stories of heroism and part of these crew members on this ship that are underpaid, overworked, and we're really just risking their lives to take care of what is basically like a shipload of everybody's grand grandparents, you know, like really just vulnerable people, especially then, UM, who were just stuck in their cabins, terrified and just

waiting for this disease to come in and kill them by some unknown way. Well, Michael, Michael, let me jump in for a second, because I think what is always so good and it sounds like in your book, the very the specificity and the individuals telling their accounts what they saw, and and this one excerpt that's in the book, Uh, And in the magazine, I should say, you talk about this individual George walking into the pack kitchen of the cruise ship and asking a booming voice, what do you need?

And we obviously find out, as you detail, they needed

a lot. What was it in terms of the specifics that really just jumped out for you, Well, what jumped out for me was in that in that particular scene, if you will, which is all real um, is that he uh, was one of about a dozen volunteers who were working on other ships and they put out a call, uh, you know, we need people to come and help really relieve this overworked and ever sickening crew on this other ship and just helped him on the ship because if not,

it's just going to be a disaster and the ship will not be able to function. And so he was one of the ones who he did the call very courageously. He knew or he suspected that he was getting into a situation where there's covid although he didn't really know. I think he sort of hoped it wasn't covid um, but he just went for it. And it's quite remarkable and the fact that the reason people sort of were just sort of overwhelmed by joy when he came in and said, what you need, UM, is that they were

at a point of desperation. I'm talking about the people who are working on the zan Dam had been fighting this for for you know, for for many days by then, UM, and the fact that someone from the outside world was actually coming on board a great risk to help them was just emotionally more than any of them could take. UM. And of course when he got on and realized how bad it was, he started saying, you know, I should have listened to my wife because his wife, he's from Romania.

His job on this other ship called Austro Dam was to run the shops on board, you know, like selling jewelry and overpriced uh you know, scarves and stuff, and he has, you know, has he has his little kids at home back in Romania, and his wife said, are you crazy? Why are you doing this? And he's like, I just got to do it. And so, you know, one of the first things he thought of when he realized how bad it was was I should listen to

my wife. But but he stuck with it, UM. And that's just that's what's so striking about the story to me is that UM, you had so many people like that who were working that ship, who really risked their lives, and we're you know, we just plunge themselves into a chaotic um situation that was COVID at that time in the world. You know, we were all going through this,

you know, I what I what I think. One thing, the reason I think that the book sort of resonates with almost everybody, is that it takes you back to those days when you were like scrubbing your groceries with with you know, with antiseptic wipes, or like you know, putting him the garage for a couple of days, which you're afraid you would get COVID from the you know,

your your box cereal or something. UM. It says, which now seems almost ridiculous because we kind of we know so much now and we were all vaccinated or most of us are. UM. But to me, it just like it was like that at on Turbo Charged. You know, it just takes you back to that time and how dangerous things were, but it also takes you to a place where you're really happy you survived UM. And that's

the way, Mike. You know. The other element that I just want to touch on because it's so central to the excerpt, and it sort of last question here we wrap up and only have a few more seconds. But you know, really the penultimate tension here is is Panama, right, like the ship makes it all an all the way around uh south South America, and then uh, you know it culminates with this idea of the canal, right, and

and how did that play out quickly? Well, if you're right, the Panama did not want to let the ship through because, uh, when they publicly announced that there was COVID a board, which is in this in this exert um, that triggered a basically prohibition on any ship going through the canal with the COVID case on board, because the Panamenians were rightfully worried that um, you know, the disease with somehow ump off the ship onto land or more critically, the

canal pilots, which there are only a few that have to take every ship through the canal, would all get sick and they would have to shut down the Panama Canal with Mike, we gotta run. This is a great read. Check out the magazine. Check out the book. Michael Smith and Joel Weber a Bloomer Business Week. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim

Stinovic on Bloomberg Radio. We've been covering a lot of the crypto headlines as well our own ogre career, writing about how crypto traders are turney against each other, Tim in a collapsing market. Yeah, we mentioned the challenges that the crypto community said this week when it comes to Celsius, we got three arrows as well, Babel, as Movie Shan wrote for the Bloomberg Terminal. Let's get to someone in the crypto community who can help shed some light on this.

Noah Buxton as a partner in practice leader of blockchain and digital assets at Armanino. He joins us on the phone from San Francisco. It's good to have you with us. No uh I mentioned some of the big headlines just from the last few days. At this point, not to mention coin base layoffs close of the firm. My question

for you is about adoption. When consumers who haven't dipped their toes into crypto see stories like these, and then consumers who have gotten burned on crypto with declining asset prices, what does that do for widespread adoption of the of the digital asset. Yeah, Tim, thanks with a question, and Carol, thanks for having me. Yes, certainly, Uh this this puts caution right in people's minds. It puts additional skepticism as well. The headlines right now are certainly not great. If you're

thinking about, hey, what is this new technology? How do I get my mind around it? What are the investment of potentials or opportunities in here? And then then all you hear is bad things? Right, So of course it puts puts a temper. You know, it chills the market when it comes to new entrance, that's for sure, UM. And and that happens in every crypto downturn. Right, we have sort of the new entrance, the wheat is separated from the chaff, and UM. You know, unfortunately, yes, some

people get hurt in these investments. UM. But what we see, is what I see on a daily basis, is a core set of UM companies that are innovating, that are truly doing UM good work in terms of democratizing finance, opening up additional opportunities, interesting financial products that I think will be important for our future UM. And so there's a lot of good innovation that's still happening behind the scenes, and self to say nasent innovation, I mean for the

folks that we keep talking to. And I mentioned a crypto panel I did out at b and Y malon Pershing Inside this week with two individuals who are very well versed in the crypto space and being very realistic that this is like the early early days of the Internet, and that the timeline on this and there's going to be a lot of fallout, which we're seeing right now that Noah, the timeline is probably a lot longer than

we all realize. When there comes to the credibility. Sure, yeah, I don't think that's an unfair assessment by any means, right. I think us, those of us that work in this every day had gotten pretty comfortable being at a you know, two and three trillion dollar market gap. Hey, we feel like a real market now. Look at you know, look at look at us UM and bitcoin itself was a trillion dollar asset class, you know, and we saw institutional players in the space, you know, start to treat it

that way, right, this is an institutional quality asset. It's a digital commodity um and you know, when that value is stripped out very quickly. Um. Yes, you realize that, Wow, we actually have a very very shallow market. Um. And so uh, these things move very quickly. And also the credit moves differently in crypto as as compared to traditional markets. And so that's why we see these these very very fast bottoming outs that can happen. Yeah, I want to I want to build on that a little bit because

I think about what our markets, bloomer markets, uh. Alice have a guilty little said earlier today about the idea of seeing looking to bitcoin is a sign of capitulation, and it reminds me of what Scott minded Over Kugenheim said on Bloomberg TV just a few days ago after fed here J Powell uh spoke the idea that cryptos canary in the coal mine for risk assets like equities. No, and I'm wondering what the crypto market can tell us about the way that other asset classes are going to move. Yeah,

that's an interesting perspective. I do see cryptos are very free market. Honestly. I think that, Um, yeah, when we see uh, as I just mentioned the for instance of credit credit tightening quickly, So I do think that there's a canary in the coal mine aspect. And I think it's also fair to to look at the you know, equities markets today and say, wow, look at the ratios. This seems a bit disconnected from reality. Um but why does that move slower? Why are we not seeing downturns?

There are many reasons, of course, but I do think that some of those reasons are there's um an infrastructure of credit facilities, there's a lender of last resort. There's a whole infrastructure of sort of trust and transparency in

those markets. Right public companies do reporting, um you know, there's a rich market of analysts that that analyze all that data and keep markets comfortable and informed, and so that that leads to fair, orderly markets ultimately with good price discovery um A. You know, and liquidity injection for for traditional markets doesn't hurt either, But we don't have

that in crypto markets, you know. So I think, you know, the other thing that the other point that I'd like to make I see on the daily basis is that, you know, I have a pretty sober view of this. I think that there are certainly trusted players in the space, and there are certainly those um that have a lot more work to do, and I think that we can see real differentiations. So one of the things I work

on every day is providing that trust and transparency. Right, We're a large cp A firm and and we see this differentiation on the daily right. So what we see happening with Celsius, what's happening it's uh, well, it's really a lack of customer trust. It's a lack of reporting from the company to an engender that trust and give customers what they need to trust those services and see

that their assets are adequately backed or reserved. Um. You know, you can contrast that with the well and I would jump in no, no, and just say because we're unning out of time here. But that's why people respect something like the US dollar, like there is something behind it and there's credibility and respect. And I will say on my panel, folks were calling said, we do need some regulatory oversight that that will give it, certainly the crypto

markets some credibility. No buxed in from our our money. No joining us on the phone from San Francisco. This is Bloomberg. I'm a journal Yeah, but you let me drive Oh no, no, no, no, please, I want to drive. Good question, dri drive to the close bloom Bird Radio. All right, we've got just about ten and happen it's left in today's trading session. What a week it's been. We have seen a significant selling. Are these numbers right? Are we down about seventeen percent in the daw for

the week? No, not for the week? No, on the dow wear'd down four point six percent for the week. These numbers I'm looking at. I got to check these. Oh, year to date forgive me. That's year to day and down about three percent. I told you I'm only going on three hours of sleep, so bear with me. Thank you Tim for keeping me on. Yeah, any time, Carol. Five point seven percent for the week, but so very man selling. So let's see if our next guest thanks

capitulation or not. Larry Pokowski is managing partner and portfolio manager at good Haven a Capital Management. Larry joining us this afternoon on the phone from Milbourne, New Jersey. So, Larry, I'm gonna just give you Carol's question, capitulation. Are we close? You know, Tim, it's you never really know if this is the bottom. I would say there are two very

important things I keep on my desk in handy. One is by Sir Winston Churchill, which has never let a crisis go to waste and for though that for us at good Haven, that means using volatility to try and continuously look for better companies to invest in, to upgrade the portfolio, and to use the volatility to try and

for the advantage of our clients and shareholders. And the other one I keep handy is by Rick mere is a very famous indiecar racer, which was to finish first, You must first finish, which means, you know, we try and uh make sure we always have some cash around. We are not running levered portfolios because in a crisis those things uh really are very important, more important than ever before. And so all I can tell you is

we have found plenty of to look at. We like what we own and you know, uh there are more potential bargains than there were six months ago. So wait to finish first, You must first finish. So how do you apply that to this market? Well, I think the point of the saying is if you are over levered or you have no resources, uh, you may have some interesting ideas, but you may not get to see it through.

So I think as a portfolio manager. What it means is, uh, you know, being unlevered and having some cash allows you to control your own destiny and try and take advantage of the volatility that's going on out there. Is supposed to the volatility taking advantage of you. Okay, so let's talk about opportunities here and where you're seeing them right now. Um, you guys are still bullish on energy despite the fact

that this week has been brutal. I mean, look, it's the best performing sector in the sp THOT founder this year and last year it was. Um. Why still bullish on energy even if there could be a recession which could really crimp demand around the world. Well, Tim, it's very good question. I'd like to answer it by reminiscing a little bit with Carol. Carol con we remin us

just a little bit on this part. June June seen I was on the show and we were talking mostly about energy, and we were talking about one of our bigger holdings at the time, which was w p X Energy. Oil was forty five bucks. Not many people thought it was an interesting industry to be invested in. The stock was with w PX was ten bucks. Oil was forty five it was a very unpopular area, and I thought it was interesting. I know you thought it was interesting, and here we are. Devon then acquired w p X.

It is still an important holding for us. It has gone up substantially since then. But I think today when you look at what Devon has done over the years, you have a very material dividend policy. They really were. I think the first at the pick called the fix plus the variable dividend. The stock has been weak lately. Uh, it is still materially up from you know, our cost,

which is a single digit number. But if you look at it today, you're looking at a potential dividend yield of probably almost yeah, I would say north of a percent to be conservative. Even if oil were to come back to let's call it, you know, on the back of an envelope eighty bucks oil, five fifty gas, they should still be able to generate six and a half bucks of free cash flow. Uh. So, you know, we think it's interesting. It's been a holding for a while,

but it's interesting again today. And you know, I think Devon and their brethren, to the credit of Rick Moncree for runs the show there and to some of their brethren too, have really become uh focused on moderate production growth and using the enormous profitability to benefit you know, all of their constituents, including their shareholders and bondholders. So I mean what you're saying in this energy play, though, too, to me is and first of all, I love reminiscing.

And I went back and I was on the Bloomberg and I'm like, oh my god, yeah, they were required. It's interesting. And I do also feel like you are part of a theme and trend that I keep seeing Larry from people saying, look at some of the stocks that pay dividends in an uncertain environment. You know, there's kind of a certainty to it if you're looking for

some performance. But going back to your energy play, even though we are moving to an alternative energy world, renewables increasingly, we've all got to be realistic about this timeline, especially with the war in Ukraine, Like this is not going to happen overnight, so energy is going to provide some performance.

I think that all makes perfect sense. Kell, And you know, I think from our perspective, these things that are now front page items, energy prices, higher interest rates, inflation, they're all front page items. To use that a phrase today, But we have been trying to think about them, We've written about them when we've had exposure to these areas for a long time. And I think that's the idea to try and you know, be ahead of what might

be a trend. Now. Having said that, we like to own primarily, you know, good quality, growing companies that are not very levered, but the devon of today, we're willing to still have it as a material holding because we think they're current policies, uh, you know, really fit in well, you know, appropriately sized for you know how I think about the portfolio. Yeah, okay, Larry, we have another minute with you, and I just want to get your take on where you're seeing the FED right now. Do we

see seventy five basis points at the next meeting? And you know, you know, first of all, I'm sorry sorry to have to disappoint you and tell you that I don't know, but I will I will say that higher interest rate or something or something that we've thought about for a long time, and we have a bunch of companies that will benefit from higher interest rates. And Chair Powell seems quite determined, uh, you know, to not let

inflation get out of control. And we had something in the financial sector, which was Allegheny, which was a property casualty insurance company, which the type of thing that will benefit from higher interest rates, which Mr Buffett and Omaha is buying out from us very shortly. So we've thought about this for a while. There are ways to try and look for companies that might benefit from higher interest rates. As far as a prediction on the FED, I'm sorry

to disappoint you. I don't have it. We'll just try and take stocks and worry about risk. Oh, it's actually a really important perspective, right. There's just so much you can or cannot control when it comes to macro, and so you've gotta deep into the digg into the fundamentals of specific names and make investment decisions based on that. Larry Pittkowski fund to reminisce managing partner and portfolio manager Goodhaven Capital Management. Have a good and safe weekend. Joining

us on the phone from millburgn New Jersey. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube, search Bloomberg Global News,