Dr. Philip Kennedy

While most of us are focused on using our bodies and brains “as is,” Dr. Philip Kennedy spends his waking hours where the sidewalk ends in the cutting-edge world of neuroscience. Dr. Kennedy is part of an infinitesimal group of elite neuroscientists inventing and developing neuroscience technologies that are merely seeds in what will one day become a rain forest of products and services in the marketplace.

Movies such as Blade Runner (1982), Artificial Intelligence (2001) and The Matrix (1999), and books such as Snow Crash (Neal Stephenson), tickle our fancy for glimpsing the prospective future of the human race. In the laboratory, Dr. Kennedy is staring at the science non-fiction future as it unfolds in real-time. His prescient outlook for the future of neurotech as well as his masterful understanding of the human brain provide an incredible advantage for investing in this nascent space.

I had the honor of speaking with Dr. Kennedy and asking him how our readers could better understand the effect of neuroscience on both the act of investing and the commercial marketplace. Although Dr. Kennedy explains we are at the early dawn of neurotech, he sets us on the path for establishing a framework for further investigating and monitoring progress in this exciting new sector.

Damien Hoffman: Dr. Kennedy, you and I once had a discussion about the brain as a pattern recognition machine. Can you please share your thoughts with our readers?

Dr. Kennedy: Sure, Damien. I’d be happy to. Basically, we use our brain primarily to recognize patterns. For example, an experienced physician can diagnose a disease from a very limited set of symptoms and signs, whereas an inexperienced physician will require a complete set of symptoms and signs laboriously sifted. That is called making a ‘differential diagnosis’. The experienced physician can cut to the chase very quickly simply because he/she has seen the pattern of symptoms and signs many times before. So he/she recognizes the pattern quickly.

Damien: How does this brain function help with investing or trading?

Dr. Kennedy: Experience in investing is simply being able to recognize the pattern of “action” in markets, stocks, bonds, property, etc. and hence predict the asset’s future. Monitoring fundamental and technical parameters allows one to follow patterns. Experience in pattern recognition leads to successful application of pattern recognition by making correct buying and selling decisions. Obviously, this takes time to learn. If people are patient with their acquisition of pattern recognition as applied to the market(s) they are interested in, they will develop their own successful system.

Damien: As you know, some people are in the process of applying neuroscience to economics to create an emerging cross-discipline called neuroeconomics. As a neuroscientist and passionate investor, what is your professional response to the emerging field of neuroeconomics?

Dr. Kennedy: Neuroeconomics is an important field, not just because it will shed light on how we make investment decisions, but because it will also aid us in better understanding the human brain. The basis of socionomics is that we make decisions endogenously. In other words, our feelings affect market activity. The lemming effect, so to speak.

Socionomic thinking makes an incredibly important distinction between trade and financial behavior: When a commodity becomes more expensive, less people buy it and the price drops. In the financial world when a stock, for example, becomes more expensive, more people buy it. This is not a rational, but rather an emotional, decision. In other words, this is an example of the lemming effect.

When we understand and can detect these emotional drives within us, we will make better decisions such as not getting swept up in waves of sub-prime mortgage purchases. So if neuroeconomics and socionomics can give us insight into our ridiculous, irrational and emotional behavior — as exemplified by the recent financial boom and crash — they will do the world a service. So let’s continue the studies on brain activity that seek to understand decision making.

Damien: Dr. Kennedy, in addition to neuroscience affecting the field of economics and the practice of investing, investors are also interested in how neuroscience, like biotechnology, will ultimately generate products and services in the marketplace. You are a world-renowned neuroscientist on the cutting-edge of developing such products and services. You are also a member of a very tiny club of neuroscientists who know a lot about on what others in the group are working. Can you please share how neuroscience technologies will go mainstream and become an investment class for every portfolio?

Dr. Kennedy: Absolutely. An important neuroscience technology is the coming of brain enhancement. By that I mean increasing the power of your brain. It has started with technologies to help the disabled. However, sometime in the future, perhaps, the next generation will be able to improve their memory and their ability to calculate and communicate — basically, cell phones in the brain. Such an enhancement will be an order of magnitude greater than the brain’s capability today. Such an enhanced individual will be frighteningly powerful. This raises ethical questions, of course. But ethical or not, it will happen. Sorting out how to deal with technology usually happens afterwards.

Damien: What technologies do you think will lead the way?

Dr. Kennedy: Coming soon to a clinic near you are retinal and visual cortical implants for the blind, and cortical implants for restoration of speech. Our company, Neural Signals Inc., is involved in speech restoration. Also arising is the possibility of cortical control of robots, control of robotic arms for the paralyzed, and stimulation of paralyzed muscles for quadriplegics. All these efforts are bubbling up and will become mainstream in several years.

Damien: Your company, Neural Signals Inc., is doing some amazing work that was recently featured in Scientific American Mind, Esquire, and Discover magazines. I was even reading The Week magazine one night in bed and the final section featured your article from Esquire. Congrats!

Dr. Kennedy: Thank you very much.

Damien: Dr. Kennedy, in the Discover magazine article by Sherry Baker “The Rise of the Cyborgs,” Sherry navigates us through an incredible glimpse of the future where science fiction will become reality. However, these technologies are in various stages of development. Can you offer your opinion about what neuroscience technologies will look like in the next 20 to 50 years?

Dr. Kennedy: Damien, in one word: Unrecognizable. What did the computer industry look like 50 years ago? The ENIAC computer was operational in a large room with carefully controlled temperature. The equivalent computing power, and more, is now in your pocket as a cell phone.

So, I believe the neuroscience technologies will be routine in 50 years. People who can afford them will get memory enhancements. They will receive memory packs that will make learning in school obsolete. Calculation ability will be as powerful as computer calculation ability. Additionally, communication directly from person to person will be truly direct — no cell phones. Cell phones will be obsolete.

Also, people will be enhanced physically. Most diseases will be gone. We may be barely recognizable as humans. Of course, those that cannot afford or refuse enhancements will be another class of people. This differentiation will lead to huge social problems. But that is for the future generation to solve. The progress of technology is unstoppable, though we can try to direct that progress in a helpful way.

For example, the technologies that today are seeking to enhance the handicapped are like the tail of the dog. Soon however, the tail will be wagging the dog!

Damien: Wow. That is absolutely incredible. Dr. Kennedy, thank you for your valuable time. I look forward to catching up with you in the future to hear about new and exciting things in the neuroscience technology sector.

Dr. Kennedy: Damien, it was my pleasure. I look forward to speaking with you then. All the best.