So, this stock tip works then

Written two days back, published today:

My view
I think that the vaccine will be rolling out between the New Year and the spring. Not based upon any grand knowledge of pharma, rather that the entire global industry is focused on this and I don’t expect them to fail. Also, don’t forget, the European drug regulators are – amazingly – a little more relaxed than the FDA about approval of something valuable but not wholly and entirely proven as yet.

I also think that Easyjet has the finances to be able to survive until then in this cash is king world.

The investor view
It’s necessary to believe both of those pieces to think this is worthwhile. Only some months to a vaccine and also that the airline will survive until then. But with that then Easyjet is a leveraged punt on that vaccine arrival.

Oh, right:

25 thoughts on “So, this stock tip works then”

  1. And yet, the vaccine is expected to have the efficacy of the flu jab – so it is hardly the magic bullet that everyone seems to expect. The market reaction today is truly bizarre. People seem to think that this is the end of testing. At one point that Novacyt share price had almost halved.

  2. “And yet, the vaccine is expected to have the efficacy of the flu jab”

    Maybe you’re thinking of a different vaccine from me, but Pfizer are claiming 90% efficiency for their Covid-19 vaccine whereas the flu jab I had a couple of weeks ago is expected to be ~50% efficient against whatever turns up this winter.

  3. Bloke in North Dorset

    Take your profits, many a slip ….

    Manufacturing not easy and already warnings there might be quality issues and it has to be stored at -80 Deg C making distribution difficult. Not the end of the world but certain to make roll out difficult and lead to some disappointment.

  4. 90% effective in a trial against a virus that is continually mutating. I believe you have to have 2 shots a few weeks apart, so it’s more complex to administer and it probably loses efficacy fairly quickly. It’s too early to tell but 90% effectiveness seems a bit of a stretch

  5. 90% effective does work though. Gets us so close to herd immunity as to not matter. OK, perhaps not that entirely so but close enough. If 90% of the population can#t get it because of the vaccine then where’s the reservoir in the population to infect, the people to be infected? R collapses well below 1 and it’s largely dealt with.

    Even if that’s not wholly true it’s close enough that the economy reopens.

  6. While all viruses mutate, coronaviruses seem to be more stable than ‘flus; it’s also the case that previous non SARS-COV2 coronavirus infections seem to provide a degree of protection against COVID19, so one would imagine the virus would have to mutate a long way before protection from an effective vaccine became less effective.

  7. Bloke in North Dorset

    I’m waiting for BiG’s take on it.

    AIUI the trial was 43k people across a number of countries with varying degrees of virus outbreaks. 94 people contracted Covid and and 90% of them were on the placebo.

    Assuming a 50:50 split between placebo and vaccine that means about 10 people who had the vaccination caught Covid or 10/21.5k. Is that good, bad or indifferent?

  8. One of the strange things about today’s market rally is that the stocks that have risen most, such as airlines, property companies, student accommodation, Rolls Royce, Cineworld etc are precisely the sectors that will NOT benefit from the official vaccination plan presented by Bingham, which targets the old, health care workers, carehome workers and people with long-term medical conditions. If you can, take the profits before the inevitable correction

  9. I should put together a little algorithm that tracks shares tipped by bloggers & tweeters, to see how well the tips work out. On the basis that some people will have consistently good tips (because they understand what they’re talking about), and others will be more consistently wrong. No doubt the hedge fund guys are already doing this.

  10. Dependent on the shape of the descent curve from the 2nd wave, there’s some mathematical tools out there which tell you to what extent the decline was due to either restrictions or community resistance. If it was due to restrictions then a 3rd wave is likely. If due to CR, no 3rd wave will come.
    Great. So how to take advantage of this financially ‘cos i’m selfish filth? Now I know – the airline industry, or possibly the cruise industry is going to be the most volatile depending which way this goes

  11. Bloke in North Dorset

    Diogenes

    “One of the strange things about today’s market rally is that the stocks that have risen most, such as airlines, property companies, student accommodation, Rolls Royce, Cineworld etc are precisely the sectors that will NOT benefit from the official vaccination plan presented by Bingham, which targets the old, health care workers, carehome workers and people with long-term medical conditions. If you can, take the profits before the inevitable correction”

    If we can fix it for the old & vulnerable it means the young can really get on with their lives, vaccinated or not. (Which they should be doing anyway and we should be looking after ourselves if we’re scared.)

  12. I have only seen the headline numbers, which are highly convincing.

    My first caveat is they have likely recruited an, on average, relatively young, fit, healthy study population. There was no upper age limit, but in practice, it’s the active population that volunteers for (and gets accepted for) trials like this. Some of their age cuts look strange, but that’s a detail for another time. The press release wants to tell us that 42% of patients have so-called “diverse backgrounds” (the stuff they come up with for “anything but white”…), but not how old they are.

    It’s especially difficult to do trials in the care home residents that covid is a serious risk for. But I don’t know, just going on what any other broad population trial would look like.

    If my assumption is correct, this is a population you would expect to see pretty good efficacy in, but also the population that has little to gain from vaccination. The trial has been criticised for not studying death as an endpoint, but I don’t think that is a valid objection (stop infection -> stop death). It does however show what a nothingburger covid is – you can’t study the effect of the vaccine on mortality except by doing an unfeasibly enormous trial because so few people die of it. Hold that idea that mortality is what we actually care about, because it is (pace long covid) pretty much all we care about for this disease.

    Right, let’s do some analysis, giving the most generous assumptions we can muster to the supposed desperate need for a vaccine. Assumptions are, purely for the sake of argument:

    – it prevents 90% of infection. It won’t because this proportion will be lower at later follow-up times; it can’t possibly get any larger, for both mathematical and immunological reasons – that’s why I call the headline result “highly convincing”*.

    – SAGE/Ferguson/WHO utterly incredible proposition that 90% of the population remains susceptible and most of those will be infected.

    – the IFR in the population studied is 0.05%. That’s a high estimate, for that population, but definitely low for the population as a whole.

    So, if you treat 100,000 people:

    10,000 of these have already survived covid (per SAGE/WHO) so the treatment is of no benefit to them).

    Among 90,000 people you prevent 81,000 infections assuming all are at risk, and consequently at most 41 deaths.

    I like the number needed to treat (NNT) for prophylactics of marginal benefit, because relative risks ignore the many people who stand to receive no benefit in any case. The NNT given these assumptions is 2500 (between friends). Meaning you need to vaccinate 2500 people to prevent 1 death. And that is with all the assumptions skewed towards having a low NNT. The real number is likely to be much higher. You can plug in different IFRs – if you think my IFR estimate is too low set it at 0.1%, still gives you an NNT of about 1250. But I’d contend the idea that 90% of people in the UK remain to be infected is some of the most barkingly insane antiscience I have ever seen.

    I think the actual NNT will settle around 10,000, mainly because far more people have been exposed than the official government/antiscience/globalist narrative claims. I think the IFR is falling because of a number of factors, important for this discussion will be the changing risk profile of the population over time (those who gonna die of it largely already dead). 1 in 10,000 is just not a number that justifies population-wide roll-out, let alone coercive measures, however benign the safety profile is. Vaccines are usually extremely safe, I see little mileage in criticising any vaccine on that basis. I’m also not concerned about the mRNA technology used.

    So, at least in Europe/US/most places that have clearly had very heavy exposure already this won’t be a game changer for health. Australia and New Zealand however would probably be well advised to roll it out population-wide with strong encouragement (but not coercion) to take it, and then let things take their natural course. And if you are vulnerable, clearly it’s absolutely worth your while having this. I’d let people have this voluntarily, you will still find enormous take-up.

    All views subject to change as more information becomes available/better arguments presented.

  13. I forgot my asterisk:

    *: I also suspect that the sponsors had a good hunch as to when things would look most favourable and picked the timing of the interim analysis well.

  14. “90% effective does work though. Gets us so close to herd immunity as to not matter.”

    We are probably close anyway. At least in high-exposure places, Europe/US. Also do you really believe they controlled this in China?

    Go look for Mike Yeadon’s interview by James Delingpole. Case put forcefully that herd immunity is close. By the end of next year at the latest, it will still be with us, but it will be largely a kiddies’ sniffle, and one of those bugs that carries off vulnerable elderly. A ~5% mortality of bog-standard common cold coronaviruses in that frail population makes no eyelids bat: https://www.hindawi.com/journals/cjidmm/2006/152612/ And that is where covid is destined to be.

    “Even if that’s not wholly true it’s close enough that the economy reopens.”

    I’m not that optimistic. People will still believe death lurks around every corner. Life will go on I am sure, because the authority gaslighting has been so effective. Logically everything should be open now already. Psychologically, I think some things have changed forever. And that makes me very sad, and livid that our lords and masters, including many who call themselves scientists, have encouraged that.

  15. I forgot to mention the obvious herd immunity impact of widespread uptake. This will certainly be sold as “save granny”, and there probably is some benefit to be had there. Maybe it gets some of our old life back and (I hope) puts some of the opportunists like Klaus Schwab back under the rocks they crawled out from underneath, but to get this far we had to take a painfully long deep look into the blackest nether recesses of the human soul, our capacity for collective paranoia and inability to think rationally about risk. About our ability to impose immense suffering on others rather than accept some ourselves. Beyond the economic damage we have damaged our humanity in the proces.

    I fear we will have learned very little, certainly about infectious disease and how to react to pandemics. I can cope with my bedwetter friends crowing about this – happy to give them the victory in return for being able to go places, see people, meet my clients and friends around the world. It also doesn’t bother me too much that they wouldn’t understand the cost-benefit analysis above, what bothers me is that they seem to want to not understand it. This isn’t progress.

  16. Gamecock liquidated some VFINX today. Didn’t get as much as it was when he placed the sell order at 2 PM, but still way better than it has been.

    His bank stock jumped 12% (!). He will be liquidating some of that this week, too, if the price holds. He is 71. Doctor told him that, barring any unforeseen problems, he could be vital to at least 85. So Gamecock figures he’ll sell 7% (1/14) this year. 8% next. No immediate purchase interest, ‘cept Colt Python, once price drops back below MSRP again. Probably pay off credit cards.

    Gamecock is smiling.

  17. Thanks BiG. Very interesting indeed. I’m with you and despair at many friends who have bought this hook line and sinker and don’t even consider there’s an alternative analysis. Quite unbelievable. I’m livid with our Govt, Politicians and the scientists at SAGE.

  18. BiG – Thanks

    “I think the actual NNT will settle around 10,000”

    Ie, as you’ve said, there is no point in rolling this out to the wider population. As IFR is far more meaningful when broken down by age/illness categories, one would presumably then calculate NNTs for those different age/illness categories?

    I know I’m stating the obvious, but which all points towards the same end outcome: If there is a vaccine, rationally the ones that should take it will be those at very high risk, for whom the calculated average benefits are higher than any estimate downsides from possible side effects/unknowns?

    And of course – but which ignores NNT – all those who have been “manipulated” and for which psychologically this is their escape (which may be a much higher number!).

    I’m doing my best to spread Yeadon’s interviews with others. And that “5% for a Corona cold” number (in the right age category) is fascinating too, to provide context.

  19. @BIG

    What happens if we just vaccinate the 1m most vulnerable and most likely to spread covid? Surely that saves virtually all the life’s that would be lost and the rest of the population can just get on with life? If that saved 50k lives that would only be 20 NNT.

    I’m not an expert here, so what am I missing? Feel free to say why 50k lives saved is wrong. I just picked that as it’s roughly how many have died already in the UK

  20. What happens if we just vaccinate the 1m most vulnerable and most likely to spread covid?

    I’m not an expert here, so what am I missing?

    I’m not an expert either, but my guess would be that picking the correct 1m would be the tricky part for this to be effective.

    (Leaving aside whether or not anything need be done at all, of course!)

  21. Democrats are saying it should go to other countries, first. Cos reasons.

    Prolly want it tested on brown people before they take it.

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