Tremendous

An angel investor's take on life and business

  • Has Merck Found the Cure for COVID?

    Merck has come out with great results from a new drug for COVID:

    Over the weekend, the Big Pharma and its biotech partner Ridgeback announced their drug, molnupiravir, hit one of its secondary objectives from a new trial, namely to reduce time to negativity of infectious SARS-CoV-2 virus isolation from swabs in patients with symptomatic COVID-19.

    The data show that, at Day 5, there was a reduction in positive viral culture in subjects who received molnupiravir (all doses) compared to placebo: 0% (0/47) for molnupiravir and 24% (6/25) for placebo.

    These findings are preliminary, and more data will come out soon:

    This is just a peek, with primary endpoints and more secondaries “to be presented at an upcoming medical meeting,” which will show a much clearer picture of how well this drug may be working.

    We should know a lot more within the next few weeks:

    Data from the phase 2/3 pivotal studies of the med are expected this quarter.

    This drug could be great for people who are hesitant to get a vaccine, who haven’t been able to get one yet, or for whom the vaccine did not prevent infection (rare but possible). Good news!

    For more on COVID drugs and vaccines, check out these posts:

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    Photo: Merck CEO Kenneth Frazier, “File:Kenneth C. Frazier.jpg” by Merck (www. Merck.com) is licensed under CC BY-SA 3.0

  • Why Someone Dying After Getting Vaccinated Doesn’t Mean Anything

    We keep hearing scary stories about people getting sick or dying shortly after getting a COVID vaccine. But we shouldn’t confuse correlation with causation. From the mathematician Gary Cornell’s excellent blog:

    For example, within one week after vaccinating 10,000,000 people, you will likely have around 98 people keel over and die for no apparent reason and if all of them were pregnant women, almost 27,800 miscarriages.

    In this post, he has a table with the expected rate of many diseases we often hear are associated with vaccines, such as Guillain-Barre syndrome. It turns out, a substantial number of people are going to get those illnesses anyway, with or without a vaccine.

    My wife made an excellent analogy on this subject recently. “Someone might have drank tea and had a stroke in the same day. But it probably wasn’t the tea.”

    Same idea here. And with the US having given out over 90 million shots, mostly to the elderly and frail, the fact is some people are going to die shortly thereafter. But it doesn’t say anything about the vaccine.

    The clinical trials carefully compared the vaccinated and unvaccinated groups in the trial and found no higher rate of complications amongst the vaccinated. And that’s the data to act on.

    Photo: Me getting the Moderna vaccine on February 22. I am alive and well as of this writing.

    For more on COVID and vaccines, check out these posts:

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  • GameStop May Go Broke Before It Can Reinvent Itself

    GameStop shares are surging again today, even as the company is losing hundreds of millions of dollars a year.

    The stock is reacting to Chewy founder Ryan Cohen beginning a push to transform GameStop into an e-commerce business. But it still has 5,000 stores that were losing a fortune even before COVID. And they won’t be easy to get rid of.

    Commercial leases typically last for several years, unlike residential ones. But what exact terms is GameStop bound by? This morning, I made it my mission to find out.

    The most recent info I could find was from their 2018 annual report:

    Store leases typically provide for a lease term of one to five years, plus renewal options

    That means this store-centric business model that is losing a fortune is locked in for years. Whatever Mr. Cohen does, it won’t take effect for quite some time, and the company could be out of cash by the time it happens.

    GameStop lost $300 million in the first 9 months of 2020 and had only $600 million in cash left. They could be out of money 18 months hence at that rate, or about 1 year from now. That’s long before these money-losing leases expire and free them to pursue a better business model.

    Their best course of action is to take advantage of their high-flying stock and issue a lot more shares. That war chest should be used to wind down all physical stores and completely focus on their e-commerce business, which is actually growing very quickly.

    Such a plan would dilute existing shareholders significantly though, so for current GameStop shareholders, it’s hard to see a happy ending to this story.

    For more on GameStop, check out these posts:

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    Photo: “GameStop” by JeepersMedia is licensed under CC BY 2.0

  • Elon Musk’s Secret Battery May Be the World’s Largest

    Elon Musk’s Tesla, Inc. has connected a massive battery to the Texas power grid:

    A Tesla subsidiary registered as Gambit Energy Storage LLC is quietly building a more than 100 megawatt energy storage project in Angleton, Texas, a town roughly 40 miles south of Houston. A battery that size could power about 20,000 homes on a hot summer day.

    This megabattery may be the world’s largest, surpassing another Tesla project in Australia:

    Tesla’s battery project in South Australia, launched in 2017, is adjacent to a wind farm and can store surplus electricity generated on gusty nights for daytime demand. At 100 megawatts, it was the largest battery project in the world at its launch.

    Battery packs like these could make it easier to store renewable energy when the sun is shining and the wind is blowing. And the energy market is so big, a major push in this area could help justify Tesla’s lofty valuation. From the Bloomberg report:

    “I think long-term Tesla Energy will be roughly the same size as Tesla Automotive,” Musk said during an earnings call in July 2020. “The energy business is collectively bigger than the automotive business.”

    Battery prices are falling precipitously, making such a future increasingly plausible. Prices have fallen from $668/kWh in 2013 to $137 last year, a decrease of nearly 80%.

    For more on Tesla, electric vehicles, and financial markets, check out these posts:

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    Photo: “Elon Musk” by dmoberhaus is licensed under CC BY 2.0

  • GameStop Is Surging, But Are They Willing To Make Hard Changes?

    GameStop Corp. shares are surging today and are currently up over 30%:

    Chewy co-founder and GameStop board member Ryan Cohen is taking a bigger role, which is driving today’s gains:

    GameStop Corp. shares extended their rally after the company tapped Chewy.com founder Ryan Cohen to guide its transition to an e-commerce business.

    Cohen, a director at the video-game retailer, will chair a new board committee tasked with the transformation, the company said in a statement Monday, confirming an earlier report by Bloomberg News.

    But GameStop is still losing hundreds of millions of dollars a year, continuing a trend that predates COVID. It has 5,000 stores that are dinosaurs in an e-commerce driven world. Formation of a committee is nice and all, but this doesn’t mean any real change right now. And certainly not enough to make a money losing, moribund company worth 30% more than it was yesterday.

    Even if they decided to close all their stores tomorrow, they’d still be on the hook for years’ worth of rent. A typical commercial lease lasts 3-5 years, locking in this cash-incinerating business model for quite some time.

    For more on GameStop, check out these posts:

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    Photo: “GameStop” by JeepersMedia is licensed under CC BY 2.0

  • You May Soon Be Able to Get Vaccinated in Russia

    As some US states lag in COVID vaccinations and the EU barely vaccinates at all, some are looking to Russia for help:

    Lufthansa is reportedly discussing the “medical tourism” jet scheme with bosses at Moscow’s Domodedovo airport.

    The German airline is also in talks with the Russian foreign ministry about a regular service to the airport, it was reported.

    Passengers would fly in and out without necessarily needing a visa or entering the country to see the sights such as Red Square and St Basil’s Cathedral.

    They would then make a second trip three weeks later to be fully protected by the Russian vaccine.

    Two return flights from Frankfurt are estimated to cost around £1,750.

    This hasn’t happened yet but it’s something to watch closely, especially if you’re in the EU or other countries that have barely begun to vaccinate. Russia’s vaccine is highly effective, per a study published in The Lancet:

    Vaccine efficacy, based on the numbers of confirmed COVID-19 cases from 21 days after the first dose of vaccine, is reported as 91·6% (95% CI 85·6–95·2)

    Russians have proved hesitant to get the vaccine, perhaps due to mistrust of their government, so this may mean more available for foreigners.

    For more on COVID and vaccines, check out these posts:

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    Photo: “Putin Claims Moon” by AZRainman is licensed under CC BY 2.0

  • The UK Has Killed COVID, and the US Is Close Behind

    The UK has vaccinated faster than almost anywhere on earth:

    And it’s working! Cases have fallen off a cliff, dropping by almost 90% in just two months:

    The US is actually not far behind the UK in vaccinations per person anymore, although we were significantly behind until recently. And we are actually putting out more doses per capita than the UK at the moment. So, this gives us an idea of what we have to look forward to. If anything, our results should be even better because a more contagious variant is more widespread in the UK than here.

    Indeed, we’ve seen cases fall by 2/3rds over the same period:

    To me, this seems like an incredibly powerful endorsement of Brexit and the Johnson government, neither of which I ever thought I’d favor! But the rollout in the EU has been pathetic. Meanwhile, as an American, I’ve been looking upon the UK with envy.

    Bottom line: the vaccines really are working, and we have an amazing summer to look forward to!

    For more on COVID and vaccines, check out these posts:

    If you found this post interesting, please share it on Twitter/LinkedIn/email using the buttons below. This helps more people find the blog! And please leave a comment at the bottom of the page letting me know what you think and what other information you’re interested in!

    Check out the Stuff I Use page for some great deals on products and services I use to improve my health and productivity. They just might help you too! 

    “Boris Johnson” by EU2017EE is licensed under CC BY 2.0

  • You Can Get the Same Bank Account as a Professional Investor. Here’s How.

    Shortly after giving blood a week ago, I availed myself of the blood center’s free cookies and magazines. I flipped to an article about banking in poor, mostly black areas of the rural south:

    …the national banks discourage poorer—and less profitable—clients through minimum-balance requirements and fees. And in many small towns around the Delta, good luck even finding a big traditional lender. From 2012 to 2017, low-income rural communities lost 14% of their bank branches, according to a Federal Reserve study.

    This struck me as very sad, since I don’t deal with any of those problems. Ever.

    What if you could get an account with a bank that’s entirely online, meaning you don’t need to worry if you live in a rural area? And what if that bank had accounts with no minimum balance and even free checks to boot?

    Well, that’s the kind of account I have. And as I read that article, I thought about several friends who’ve had struggles with their banks and asked me the same question: what bank do you use?

    I’ve used Ally Bank for about four years, and I do love it so! Here are some of the benefits:

    • No minimum balance
    • Free checks
    • Reimbursement of ATM fees up to $10/month, which is usually plenty for me
    • Tons of fee free ATM’s, including at every Walgreens and CVS
    • Every service is online, no branch to go to, wait in line, and catch COVID at
    • Wait time of 1-2 minutes at most to get a human on the phone, 24/7/365
    • Some of the highest interest rates for savings accounts in the nation, probably because they don’t have to pay for branches and tellers

    A friend of mine recently had his bank account frozen due to fraud protection. Naturally, it conveniently happened on a Saturday afternoon, after the branches and phone lines were closed! With Ally’s 24/7 support, this would never have been an issue.

    In fact, in four years, I’ve never had one problem with my Ally account.

    As a professional investor, deciding where to put money is my entire job. So, I put a good bit of thought into this decision, and it’s worked out well for me.

    I’d love to see people of more modest means, people in remote rural areas, and disadvantaged minorities get the same good service as a very fortunate urban white guy like myself. So that’s why I wrote this post!

    I have no affiliation with them and won’t get a dime if you sign up. But if you do decide to, the link is here.

    Have a great weekend everyone!

    For more on saving money and financial issues, check out these posts:

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    Check out the Stuff I Use page for some great deals on products and services I use to improve my health and productivity. They just might help you too! 

    Photo: Me and some random person’s car. 🙂

  • 28% Of Americans Bought Meme Stocks in January

    I came across a shocking fact this morning: 28% of Americans bought a meme stock like GameStop or AMC in January:

    Over a quarter of American adults say they bought GameStop (GME) or another viral stock in January, according to a new survey from Yahoo Finance and The Harris Poll.

    All in, 28% of Americans say they bought one of these viral stocks, the Yahoo Finance-Harris Poll found.

    AMC was the most popular, closely followed by GameStop and then Blackberry:

    In relative terms, 35% of people who bought one of these stocks bought AMC, 33% bought GameStop, and 23% bought BlackBerry.

    And they went beyond just buying the stock, getting into sophisticated and potentially risky strategies like options and buying on margin:

    Meanwhile, 29% used conditional trading like a limit order, 22% bought call options, and 15% bought with margin — borrowing money to get in.

    The people using these sophisticated techniques were largely novice traders:

    The survey found that 43% of the people who said they had a brokerage account had signed up within the past month, an enormous uptick that matches Google trends results that showed that more people were googling “how to buy stocks” than ever before.

    More here.

    I see real risk if novice investors buy heavily touted stocks with debt. They could lose a great deal. And the more they lose, the bigger the push for regulations to stop such speculation will be.

    For more on the Wallstreetbets phenomenon, check out these posts:

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    Photo: “Retail GameStop” by ccPixs.com is licensed under CC BY 2.0

  • Bitcoin Anonymity Could Become A Thing of the Past If This Regulation Passes

    In the waning days of the Trump administration, the government proposed regulations that would ban anonymity for holders of cryptocurrencies:

    Users whose wallets now are only identified with codes would have their true identities recorded with the financial institutions they zealously avoided.

    This proposed regulation has now been passed on to the Biden administration. There’s no timeline for a decision, but removing anonymity from crypto transactions could hammer the price:

    If adopted, the regulations could cause a sharp fall in the prices of virtual currencies like Bitcoin, said Matthew Maley, chief market strategist for Miller Tabak & Co., adding that he thinks Bitcoin’s price will continue to rise in the long term.

    There are some major companies like Fidelity and Coinbase pushing to retain anonymity, and I think their political influence may stop such regulations. But on the other hand, the possibility for anonymity to facilitate drug deals and terrorism could push the government in the opposite direction.

    For more on the latest in cryptocurrencies, check out these posts:

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    Photo: “Bitcoin, bitcoin coin, physical bitcoin, bitcoin photo” by antanacoins is licensed under CC BY-SA 2.0