While I haven't been vaccinated from Covid-19 yet, I have decided to vaccinate myself from a more remote threat -- stray meteorites -- by sheltering inside with a stash of White Claw seltzers while watching the Raiders-Chargers game Thursday night. So far, it's worked like magic.
OK, jokes aside, I am a firm believer in science and I believe the rapid development of vaccines by Pfizer (PFE) and others is impressive.
But, we have to separate the hype from reality here.
I was one of the first analysts to publicly write on the potential for mRNA-based therapies -- the basis of the vaccine by Pfizer and BioNTech (BNTX) . I covered the topic in columns about Arcturus Therapeutics (ARCT) . ARCT exploits mRNA for use against a series of rare conditions, and also has produced a Covid-19 vaccine candidate, ARCT-021, which is currently under trial at Duke-NUS hospital in Singapore and which has already been pre-sold to the governments of Israel and Singapore. Take a look at ARCT's stock chart and you will see that in addition to being pro-science, I am pro-profit, too.
But this is where the idiots who dominate reporting in the embarrassment that is the financial media in this country need to take a deep breath and focus on facts, not ridiculous, mindless blather that hypes anything and everything. OK, here are some cold, hard facts:
No one in the U.S. has fully been vaccinated for Covid-19. Yes, that's right, despite what you have read in the news. The Pfizer-BioNTech (BNTX) vaccine must be given in two doses. The Centers for Disease Control and Prevention's site has some weaselly language (a four-day grace period is allowed) but, ideally, the second shot should be given three weeks after the first. Both are composed of a 30 microgram formulation. So, despite all the hype, no American has been fully vaccinated for Covid-19 yet, and we won't reach that milestone until early January.
Covid-19 trials have focused on the percentage of a study group that didn't get Covid-19. Were those subjects exposed to the virus that causes Covid-19 -- SARS-CoV-2 -- as Jonas Salk's first brave volunteers were exposed to a live polio virus when he developed his vaccine?
No, not intentionally.
Of course, given the ubiquity of the SARS-CoV-2 virus -- with nearly 75 million cases worldwide according to the latest data from Johns Hopkins -- we can assume that exposure to the novel coronavirus has been widespread. As the CDC website notes, Covid-19 vaccine candidate trials were engineered to find subjects in geographies and population subgroups that had relatively high rates of Covid-19 infection. That's good science, but that's not proof. I still haven't contracted Covid-19, nor have I been hit in the head by a meteorite since sheltering inside. Am I safe? Who knows.
So, this whole global effort -- which has been enjoyable to watch, especially Operation Warp Speed here in the States -- has been impressive, but it has been entirely an effort on proving the negative. Did the subject not get infected with Covid-19? No! Well, what if that person wouldn't have caught the virus, anyway? It is impossible to tell, and anyone buying stocks based on that evidence is really quite delusional.
Do I think a nucleoside-modified messenger RNA (mRNA) formulation should be able to train the human body to ward off the virus and protect a vaccinated person from Covid-19? Sure, I do.
It should work, and the folks at Arcturus, Moderna (MRNA) , BioNTech, CureVac (CVAC) and others have worked very diligently to produce mRNA formulations that are effective. But is the Pfizer-BioNTech vaccine any more efficacious than the Russian candidate, Sputnik V, or either of the Chinese candidates produced by Sinovac (SVA) and Sinpoharm (SHTDY)? And, more importantly, will people stop contracting Covid-19 as these vaccine rollouts expand?
You can't answer those questions yet. No one can.
Scientific analysis is much more challenging than calculating a price-to-earnings ratio or discounting a stream of cash flows. But that doesn't mean you should bow down in obeisance to those hard-working scientists and just buy, buy, buy stocks. Those numbers after a stock ticker mean something, dammit. They represent the market value of the company. I have spent the last 30 years of my life learning the science of equity analysis, and I will be damned if I am going to forget that knowledge. Stocks are overvalued now. Incredibly so, and more so than at any time in the current economic cycle. Science always wins, but gravity always catches up to over-valued stock prices, too.
You should vaccinate your portfolio against a much-needed market correction by writing call options against your positions.
