Vaccines - What Are People Thinking?

[mattee2264]

 

Yeah I feel dollar cost averaging over the next month or two is probably better than investing a lump sum now as rising case numbers and lockdowns will probably cool a lot of the vaccine euphoria but on the other hand after selling off for a while hope of a stimulus or maybe some new vaccine results being released could turn the tide.

[Simba]

So many outcomes.. That's why there is alpha to be generated. But let's say there was 30% alpha in the universe of stocks, what weighing of the portfolio would you put in such names?

 

Say: Excess alpha = 30% is 1 year for recovery plays

Portfolio weight 5% in recovery plays = 1.5% added return

Portfolio weight 10% in recovery plays = 3.0% added return

Portfolio weight 25% in recovery plays = 7.5% added return

 

I think the easiest way is playing an ETF (e.g. sector) and then the hardest way is playing it stock by stock.

 

[mattee2264]

 

Moderna vaccine with even better efficacy tested across some of the most vulnerable demographics and also can be stored at normal temperatures which could accelerate the roll out.

[SharperDingaan]

Time to recovery is compressing ....  the next step-up will be the deployment approach. Put 'zones' into rolling lock-downs for two-weeks, put your vaccine in the 'zone' ahead of time, and vaccinate in the zone while it is in lock down. New delivery of vaccine, to a new zone, every 2 weeks. Pick the hottest zones first.

 

Between breaking the transmission cycle within a zone, and vaccinating the herd in that zone, the new case count should drop like a brick. Hit the hot zones first (with their big numbers), and we have accelerated recovery at a declining rate. Almost as impactful as the vaccine itself.

 

SD

 

 

[Simba]

Yeh!  8)

 

Great news from Moderna!!!

 

Is AstraZeneca / Oxford next vaccine?

 

Are we going to go 3/3 ?

[Gregmal]

I would think the AZN Oxford will be equally as potent. I remember readying earlier on, like in February/March, quite a few scientists who were confident and thought this would be easy. They were sure they already had the vaccine, the challenge, as it always is, with this stuff, is rolling out the trials because time is time and theres no way to speed it up.

[Viking]

Shock 1: Pfizer vaccine efficacy > 90% (Nov 9)

 

Big, big deal.

 

Shock 2: Moderna vaccine efficacy > 94% - low storage temperature and long shelf life (Nov 16)

 

Huge, huge deal. Pfizer results were not a fluke. And strong indication other vaccine’s targeting spike protein will also be successful.

 

—————————————-

 

What investors need to ask themselves is what will our world look like in 9 months time? My highest probability guess is we will be in a new normal... not virus free but possibly well on our way. As a result i am 100% invested for the first time since February.

 

My largest position is Fairfax; it was trading at US$465 in Feb; today it is trading at $330. Should the vaccine’s prove successful then the global economy will slowly gather steam as 2021 unfolds. In this scenario Fairfax’s investments should do very well. Combined with insurance hard market. My guess is there is a good chance Fairfax will trade above $465 in the next 6 months (likely sooner). I like the risk/reward for a 50% return opportunity (my average cost is below $300). I am heavy Fairfax because i prefer to concentrate in companies i understand. There are lots of other opportunities like this (for investors to pick from) and i am just using Fairfax as an example.

 

I was very pessimistic in Late Feb and early March. The opposite now :-)

 

Now, just like in Feb/March, following the likely path of the virus is key. If the vaccine news gets worse then i will update my thesis. But my guess is vaccine news could continue to surprise to the upside (so much money is being thrown at this problem... and politicians are HIGHLY motivated right now).

 

The current spike in virus cases is simply noise from an investing perspective. (Tragic from a health perspective). This is a great example of where people likely need to stop watching the news / Twitter. My view is rather than try and time the next 6 or 8 weeks, start to get positioned for where the puck is going. Position size will be dictated by your conviction level of what the economy will look like in 9 months and after.

 

PS: the silver lining of having a spike in virus cases right now is it is speeding up the many, many tests being run by all the vaccine companies (and will likely speed up vaccine development and approvals which will be good for the economy looking out 6 months and more). Very bizarre situation we are in right now (and the coming months).

[SharperDingaan]

"Where the puck is going".

 

This is why I keep highlighting Cdn O/G. Talk to your neighbours - when things become 'normal' again; what is the first thing that everyone wants to do? For most, planning a trip is very high on that list. Planes flying, vehicles moving, factories all starting to hum again ($ to travel) - all of it ramping up demand in a big way. Against limited new supply, tightly controlled (Opec+); and everyone in need of higher prices, to support their budgets. 

 

Can't get a good frac spread without heavy crude, and can't take advantage of the higher travel demand without a reliable/copious source of heavy crude - able to meet the incremental demand.

 

Seems like the puck will be in Alberta for a while  ;)

 

SD