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Do you know the song by Crosby, Stills, Nash and Young, called, “Teach Your Children”?

“Papa Bear” – an investment banker who loved his anonymity and mentored several young entrepreneurs said it best: “My money would spoil my kids. So my money goes to charity when I die.

“My job is to teach my children the rules and laws of success so that they know how to build their wealth.” He was a “teach your children well” kind of guy.

How do you teach your children about money?

Think back to how you learned about money. You might have been very young when your mom or dad gave you your first piggy bank. If your parents had a wealth-building mentality, they taught you a few things about money – including hard work, living on less than you make and saving at least 20% of your paycheck in various forms.

What are the rules and laws of success Papa Bear talked about, beyond these basic budget allocation skills?

 

Budget to Invest

Before you can begin to introduce your children to the power of angel investing and entrepreneurship, you can start right from the cradle to help them allocate to invest!

Author T Harv Eker teaches to put money into 5 small buckets and 1 large bucket –

  • 50% into necessities
  • 10% into charity
  • 10% into fun
  • 10% into education
  • 10% into long term savings
  • 10% into financial freedom

*source: Secrets of the Millionaire Mind

 

Since children typically don’t have necessities like rent, food, utilities and insurance until they’re adults, encouraging them to save 80%, with 10% for fun and 10% for charity gets them into healthy habits early.

If they don’t learn these savings and investing skills early on, they run the risk of living paycheck to paycheck and enslavement to credit card and other debts for emergencies the long term savings account would normally cover.

 

Let’s talk about Education.

Your children will pay for what they don’t know. You probably already know that because if you’re like most people, you’ve had that School of Hard Knocks lesson yourself.

A few years ago, I drove past a local credit union which was advertising its certificate of deposit rate. As I saw 0.09% in a big lawn sign in front of the building, I was appalled. Who’s the sucker who would see that as a great rate?

Granted, this was back in 2009, but still, the current benchmark returns on CDs has gone up to a whopping 0.70% [*source bankrate.com]. People are locking up their money for months and years at a time, getting a fraction of return compared to what they are paying in interest on their mortgage, or car notes, or credit cards.

If they don’t learn how to invest in stocks, options, currencies, bonds, crypto, or startups, they are doomed to pay interest on debt rather than earn interest on their savings. That’s the cost of a lack of education.

Do you feel that chest-thumping passion Papa Bear was talking about in teaching his children about how money works?

Education protects, as well as empowers!

What would I suggest you help your children learn in their first lessons?

 

Risk management.

This includes:

  • position sizing (how much you can put at risk and still sleep at night, i.e. your sleep #)
  • Diversification. If you only invest in one particular venture or stock, you never get through the basic lessons of your first investments – wins, losses, etc. to become consistent on the successes.
  • Learn to read a chart. Spotting the beginning of a trend is really hard when you’re starting out. You can get easily suckered into a bear rally if you don’t.
  • Learn how to make your own conclusions. Without being able to add up the facts for yourself and make your own decisions leaves you at the mercy of people who make lots of money off of your fear and greed. Chicken Little is real on the news. The sky is always falling, unless it really is! Recalling the 2008 recession, the R word was never mentioned in the news until the end of September, because saying it in the early days of the market would have created a run on the market. Short term investors turned bearish as early as the end of January – and the long term investors saw their bearish signal before the end of June. Don’t take anyone else’s word for it. It’s your investment at risk.
  • Practice before putting your real money at risk. Paper trade to confirm you at least know the basics of sector and market movement. Live trading and investing will be different in results than practice trading.

 

Investment Pathway

How much should you allocate to multiples of the below choices? There are many to choose from. Education will help you decide which is right for you.

  • Bonds
  • ETFs
  • Stocks
  • Options
  • Currencies (Forex)
  • Crypto
  • Startups via Crowdfunding or Reg-A and up to IPO

 

Bottom Line

Teaching your children to save is only the beginning. Don’t stop there. Teach them to have an investor mindset. What they don’t learn; what they don’t know will leave them vulnerable to people and organizations who do not have their financial best interests as their motivation.

Investing in startups is among the most speculative forms of investment. After all, in many cases, you’re dealing with unproven companies. However, that’s what makes the opportunity attractive.

They shouldn’t be viewed as “all in” investments, but part of a diversified portfolio.

 

Author: RagingBull

RagingBull is the foremost trading education website where traders of all skill and experience levels can learn to trade or to become a better trader. Students can learn from experienced stock and options traders, and be alerted to the real money trades these traders make. Become a better trader with RagingBull.com's courses and programs.

Your future doctor visit could include genetic editing to reverse the downside of inheritance – arthritis, diabetes, sickle cell anemia, cystic fibrosis, cancer… you get the idea.

Life-saving gene editing may possess the opportunity to turn back time on injuries and inherited diseases and immunity to infectious diseases like Covid 19.

In 1987 researchers discovered patterns and spaces in the DNA strand; those spaces are referred to as “Clustered Regular Interspaced Short Palindromic Repeats” or CRISPR for short. This CRISPR discovery showed that viruses insert their genetic code instructions and change the nature of cellular replication leading to disease and death.

Genetic modification is nothing new— ever since the first branch was grafted into a different vine to get a better type of fruit, or breeding animals for specific features. But even with this new technology, there is still a lot to learn.

Now there’s surgical precision like molecular scissors in gene therapy, with the potential to personalize health care that is getting the attention of excited investors who want it.

While everyone is buzzing from last week’s study—in which six rare disease patients improved their condition after receiving a CRISPR injection.

[image source: Google News]

Several startups are working diligently in the space—that you’ve probably never heard of.

Today I’m going to talk to you about six of the most compelling companies in the space. Including two startups which have yet to IPO.

Private Companies

Synthego

Synthego is a privately held company which developed genetic engineering technology called SNP-Chip – molecular-sized transistors to detect single point mutations which can then be repaired. They are also working in the sickle cell space, with several other companies. Just one year ago, Synthego raised $100 Million in their series D financing to accelerate the research to market process .

CEO Paul Dabrowski comes from a background in computer engineering, and has worked on illustrious high tech projects such as SpaceX lead digital designer, and Halcyon Molecular.

While some companies have already entered into their public offering and are now traded on the Nasdaq, this makes the analysis of the sector easy to spot trends and entry points. Evaluating angel investment opportunities in this rapidly advancing sector can be matched with personal passion for finding a cure or reversing the effects of aging.

Exonics Therapeutics

There are several different strains of muscular dystrophy – a disease that affects about 250,000 in just the US. One of the more common strains is referred to as Duchenne Muscular Dystrophy (DMD) which impacts male children as early as 2 years old, and typically leads them to being wheelchair bound before they’re 12.

Exonics CEO Eric Olson describes the use of a prime editor process to correct large deletions in the DMD gene by specifically swapping a single nucleotide.

Olson, a professor at University of Texas Southwestern Medical Center specializes in molecular biology and led the research. “Thousands of different mutations causing DMD have been identified, but they tend to cluster into certain parts of the dystrophin gene,” Olson said. “The power of our method is that you don’t need a new gene editing strategy for every patient with a new mutation; you can correct multiple different mutations with a consolidated approach.”

Mammoth Biosciences

Mammoth came out heavily on the diagnostic side in the use of gene editing technology, working hard in 2020 to create a rapid diagnostic test for the coronavirus. Their focus on disease diagnostics in the CRISPR space positioned them to step up in a time of crisis.

Nobel Prize winner, Jennifer Doudna (see Intellia Therapeutics) co-founded Mammoth with Trevor Martin as he was completing his graduate work, researching genetics and statistics in Fraser Lab at Stanford University.

Some of its key investors include Mayfield, 8VC, Tim Cook, Brook Byers, Wireframe Ventures, Pacific8 and Verily, according to the company’s website.

Public Companies In The Space

Beam Therapeutics

Beam Therapeutics’ approach is around base editing technology, which is a fancy way to say precise point gene repairs without directly breaking the DNA strand, which leaves cells less vulnerable.

It’s exciting for the medical community as DNA breakage has been a significant barrier to gene-editing therapies. This week, BEAM along with Apellis Pharmaceuticals, announced a 5-year research collaboration using Beam’s base editing technology to find new treatments for complex diseases.

The partnership brings Apellis Founder Cedric Francois MD, known for his part in the research team that performed the first successful hand transplantation in Louisville, KY in 1999, together with Beam CEO Alex Frommeyer.

Shares of BEAM have seen a nice runup in 2021, rising nearly 60% ytd.

Intellia Therapeutics

The 2020 Nobel Prize in chemistry recognized the need and the power of CRISPR technology when it recognized Intellia Therapeutics founder Jennifer Doudna. Just a few weeks ago, Intellia announced findings from the first-ever human study focused on treatment options for patients with transthyretin amyloidosis, a genetic disease that is often underdiagnosed and is associated with heart failure.

Investors are now starting to see the rewards. Shares of NTLA are up 200% ytd.

CRISPR Therapeutics

I don’t want to leave out CRISPR Therapeutics which has been cited frequently in the news, especially around sickle cell gene editing research. AND co-founder, Emmanuelle Charpentier shared the Nobel Prize in Chemistry with Intellia Therapeutics founder, Jennifer Doudna. Along with the research into sickle cell disease, CRISPR Therapeutics has also been pursuing therapies for natural killer cell cancer treatments.

There has been some downside buzz about CRISPR Therapeutics in discussions about their cash burn rate, though the company seems to be on top of its spending needs.

Shares of CRSP have risen by more than 40% over the last month. However, it is still off its 52-week highs of $220 per share, and up a modest 1.8% on the year.

Editas Medicine Inc.

Editas has research in ocular disease, cancer and blood diseases like sickle cell, which is where the buzz has centered in CRISPR technology this week, riding on the coat tails of Intellia Therapeutics. Editats is involved in the same research on ATTR (transthyretin amyloidosis) and has received approval for a clinical study to begin testing in children. They expect to report findings from an adult study in September.

Despite a 64% increase in its share price over the last month, shares of EDIT are down 21% ytd.

Bottom Line

CRISPR investors are at the forefront of an untapped wilderness that will influence how we treat disease and move toward a health care focus rather than a focus on disease care.

With over $4 trillion in the US national budget, not counting what the average person spends on care and insurance, due diligence for investors shows this field has massive industry growth potential but carries risk like any start-up investment.

Author: RagingBull

RagingBull is the foremost trading education website where traders of all skill and experience levels can learn to trade or to become a better trader. Students can learn from experienced stock and options traders, and be alerted to the real money trades these traders make. Become a better trader with RagingBull.com's courses and programs.

If raising money were easy, everyone would do it. The irony is lots of companies with great ideas die on the vine. Often, it’s money that’s the root cause. But we have to consider other things like timing, human resources, and messaging, just to name a few. Too many times, we see a solution in looking at a problem.

Our job is to sort through companies and identify those who we believe can avoid failure.

It’s not easy. We need to be rewarded for our risks because no matter how great a company may appear on paper, it could die on the vine. The money vine.

So, we search for opportunities that could offer an asymmetrical reward versus risk. That means we believe the upside potential could be many multiples compared to the capital risk.

Unfortunately, some businesses don’t have that style of upside. Does that mean we walk away?

No. Absolutely not.

Because then companies raising money can still construct an offering that potentially benefits the business and transforms a balanced risk-reward into an asymmetric opportunity.

They can do this with a carrot of sorts.

I’m not sure why we refer to a carrot as enticing. Why not chocolate? Or whiskey?

Anyhow, I digress.

This whiskey chocolate carrot is better known as a warrant.

A warrant is the same thing as a call option. It provides the holder of the warrant the right to buy shares of a company for a set price for a set period.

Why is this good for a company?

First, it may make their shares more appealing, thus helping them raise more capital.

Second, it can act as a future capital raise already built-in from day one.

Third, there is a chance the warrants will expire worthless, and the company would have no future obligations to those warrants, providing some possible capital flexibility in the future.

Why is this good for an investor?

Leverage.

Too often hear the word leverage and think of it as a dirty word, but what if you could get additional upside potential on a stock without risking any additional capital?

That’s how leverage works here if you are awarded a warrant for no additional upfront investment. Additionally, if the stock goes down, you don’t owe anything on your warrant.

The only way to lose is to either exercise your warrant at a higher price than the stock (you should likely never do this) or exercise the warrant, hold the newly purchased stock, and then watch the stock move lower.

Investors benefit along with the company if the company is successful raising money. The company most likely needs the money to succeed and success is good for the investor as well.

Let’s look at an example:

Company A is offering shares at $1.00 each at a $10 million valuation. For every share you purchase, you also receive a warrant to buy additional shares at $2.00 each for the next three years.

If the stock stays at $1.00 for the next three years, your investment is worth the same.

If the stock drops to $0.50, you’ll be down half your investment.

If the stock rises to $2.00, your investment will be up 100%.

But here’s the kicker, if the stock rises to $3.00 in the next three years, your initial investment will be up 300%, not 200%. The stock rose by $2.00 but you also have a warrant that is worth $1.00 per share ($3.00 stock price less than $2.00 cost to exercise the warrant).

The warrant doesn’t change your downside but it does increase your upside. That’s leverage we like.

And if you exercise those warrants, the company has now raised additional capital at more than twice their first pre-money raise.

This is something we prefer to see from deals as it offers many potential benefits without significant drawbacks.

Author: RagingBull

RagingBull is the foremost trading education website where traders of all skill and experience levels can learn to trade or to become a better trader. Students can learn from experienced stock and options traders, and be alerted to the real money trades these traders make. Become a better trader with RagingBull.com's courses and programs.