How Pfizer’s vaccine will affect stocks in your portfolio
Wow, what a week! Pfizer announces it has a vaccine almost set to go, and hasn’t the market reacted! Happily for our investors, The Montgomery Fund has already pivoted towards a post-pandemic world: we’ve cut cash to a record low and invested in some businesses beaten down by enforced lockdowns.
Pfizer’s announcement is the strongest signal yet that the unparalleled search for a vaccine to bring the pandemic to an end might succeed. While the Pfizer vaccine is more difficult to produce and distribute than many others, Dr Anthony Fauci said: “The results are really quite good, I mean extraordinary.”
The speed with which progress has occurred has also broken every scientific speed record and this is partly due to the winter months in the northern hemisphere increasing the rate of infection and therefore the number of people upon which the vaccine can be tested.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Mark
:
Don’t you think it’s time the market started looking beyond the vaccine dynamic? What will shape 2021 will have less to do with big-pharma, don’t you think. What do you really believe in..?
Roger Montgomery
:
Hey mark, we have been discussing that exact question over the last few months. We think ESG, the environment and EV demand for associated inputs are strong candidates. Longer term the narrative may begin to ask bigger questions, which if they emerge may trigger some volatility. For example; what happens if interest rates normalise? When will stimulus measures be withdrawn? When will surpluses return? If inflation is permitted to rise how will it be controlled? What if creditor nations stop lending to deficit countries?
Jamie
:
Holding ADH and Webjet myself, it’s been a very interesting time. How does vaccine news solve for the bigger macro issues at play? eg; record low interest rates, an incredibly indebted economy, 100B QE by the RBA. I don’t see a jab in the arm solving any of the these serious structural problems any time soon.
Roger Montgomery
:
Agree. Returning to normal will mean we start addressing the following questions which may lead to more volatility: the narrative may begin to ask bigger questions, which if they emerge may trigger some volatility. As I have asked elsewhere here on the blog, what happens if interest rates normalise? When will stimulus measures be withdrawn? When will surpluses return? If inflation is permitted to rise how will it be controlled? What if creditor nations stop lending to deficit countries? These questions, once they enter the ‘narrative’ may be a source of uncertainty and volatility.