Headline: Cold confusion??

Date: 11/15/2020

Body:   I was reading the following blog entry on Yahoo Finance, and it does ask some good questions about the possible vaccine devised by Pfizer.   It is a good story, and I encourage you to invest 2-3 minutes to read it.


So, out of curiosity on a slow Sunday, I went to the Pfizer stock chart, and it does appear that the trend is upward.   And, if the vaccine is approved, and distribution issues are conquered (they have some very intelligent employees, I think there’s hope) the stock price can’t help but rise.  Right??

Well, maybe.  Before you go putting money into Pfizer or any other biotech firm using similar logic, please stop and think at least thrice.  Specifically, there are additional problems concerning this vaccine.   For some good reasons (and some not-so-good) a lot of people are going to refuse to receive this vaccine.   So, even if these distribution issues are effectively licked (sorry, poor word choice) they still have a massive “human factors” issue set to tackle.  Once again, they might do this successfully too, but it’s not guaranteed.

More generally, I am reminded of the Gold Rush in the middle of the 19th century.    The oft-repeated phrase is, “Go West, Young Man,” and the advice was offered because there seemed a plethora of opportunity that many people could take advantage of.  Then, there came the advice to not prospect for gold yourself: Instead, open a shop that sells picks, shovels and clothing appropriate to the harsh gold-mining conditions, and THEN you’ll make the REAL money. (People like Levi Strauss took this to heart, and their brands remain even today.) All well-meant advice, to be sure.  Still, thousands of men returned home empty-handed, but for the Bankruptcy notices received from banks.

I am also reminded of another job posting I currently had.   I was a Budget Analyst for a local municipal government, and I had a boss, call him Dwight.    Dwight had a favorite saying, “Ask the NEXT question.”   What he meant by this is, once you ask the Roads Department how much a “high flow milling head” is going to cost, you have to ask them what the new investment will allow them to do.  When considering stock investing, I encourage you to always ask the next question.  In the case of vaccines, you might ask a few questions:

  1.  Are there partners that might help with the logistical hurdles?  Maybe investing in these could make sense (or dollars?)
  2. Are there international partners who might be able to continue progress on vaccinations in another portion of the globe?  Maybe investing in these could make sense.

At the end of the day, chasing momentary movements in stock price, due to current events, can be as challenging and dangerous, as it can be an interesting intellectual exercise.  As long as you have your other bases covered (e.g. day-to-day expenses, saving for retirement) this could be an exciting thing to watch.  But, as mentioned before, perfect crystal orbs that perfectly predict the future do not exist.  If you decide to gamble like this, be sure to do your research and be realistic about taxes and trading costs.

Given that most people have put vacations on hold, and held other plans in abeyance, there are a lot of people sitting on money.   They rightly ask, “So, what SHOULD I invest in, Drew?”   This question is worthy of a lot of thought, but it boils down to 2 things: Time Horizon and Stage of Development.  If you want to invest your money, but know that in 1-2 years, you’ll need the money, my advice would be one thing.  But, if you have 15-20 years before you need that pot of money, my advice might be very different.  Stage of Development is an interesting attribute because it has nothing to do with age.  A 66-year-old might be trying out a new career, and they would be at an early stage of development.  In all stages, I like the advice “Invest in what you know.”  So, early on, think about investing in education and experiences to help burnish your credentials or earn new ones.   Later in development, consider investments within sectors you have experience inside of.

At the end of the day, it’s your Life.  Be sure to tell a good tale.

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