I am writing this to you and to many others because I want you to experience something, but to do so you must take action tomorrow. (Or at the latest by Wednesday.)
I want you to buy Moderna stock. Buy one share, buy a million, that’s up to you, but buy some before the stock market closes at 4:00pm on Wednesday December 16th 2020.
It’s symbol is MRNA.
I want you to do this because I want you to experience something.
It’s called “Buy on the Rumor. Sell on the News.”
Many of you know I invest. I’ve probably talked to you about it. Maybe, we’ve talked stocks, maybe I’ve talked to you until your eyes glazed over. Maybe you’ve said, “Yeah, I want to buy some stock some day.”
I want you to make Monday your day to do that. If you don’t have a stock brokerage account – get one. I like Fidelity. You can call them up and open an account. If you are making a paycheck you can open a ROTH IRA. Why a Roth? Any money you make in it you don’t have to pay taxes on. If you have kids you can open up a college fund and as long as the kid uses it for college you don’t have to pay taxes. If they don’t go to college you can pull it out and pay taxes. (Tell them you want “a self directed account.” That means you make the decisions in the account.) Put whatever money you want into the account and buy MRNA.
How much should you buy? Well, that’s up to you, but for the experience I want you to have buy a share. That will cost between $150 and $168. At least that’s what the stock was going for last week.
How much have I bought? Well I had pulled out of the market about 30% over the last few years. I have put the majority of it back in, buying mostly the vaccine candidate stocks: Pfizer(PFE), Biontech(BNTX), and Moderna (MRNA) are the ones I invested most heavily in. I’d guess 15% of my total portfolio is now in Moderna. So if it was me, I’d put every spare dollar I had into Moderna before Wednesday 4pm.
But that’s me. You do what you want, but please for the sake of this little mind experiment buy one share (or a fractional share. Fidelity will let you do that too.)
We may have disagreed on a lot of things: religion, politics, investing, sports, whatever; but here’s what I want you to experience. What happens to a stock “on the news.” If you buy by Wednesday you’ve “bought on the rumor.”
What’s the rumor? That the FDA will approve Moderna’s vaccine on Thursday. Then the CDC will follow suit that weekend and the vaccine will start to be distributed in the U.S. and the price of the stock will (should) go up.
How confident am I that this will happen? 97.3%
Why that number? Well 100% sounds fishy, 99% and 98% are over used so 97% was the next number down that wasn’t overused. I added the .3% to make it sound like I know what I’m talking about.
How much will the stock go up? I believe (BELIEVE) it will double within a year and in a few years be up many times over that. If this happens you can strut around with your chest puffed out knowing you got in on the ground floor, etc.
Is there a chance this won’t happen?
Yes, of course. You are buying on the expectation that the FDA will approve the vaccine (that’s the rumor). If it doesn’t happen the stock will (this is a technical term, so I don’t expect you to know it, but I think you can ferret out it’s meaning) “will go to shit.” That means the stock will go down and then you can laugh at me or turn your back on me at the next soccer game or wake or whenever you see me again.
How likely is it that the vaccine will be approved?
Well, Moderna’s vaccine is similar to the one Pfizer got approved last Thursday. Actually, it’s better in that it uses the same technology (mRNA) but doesn’t have to be kept as cold as Pfizer’s. It can actually be kept cold in existing refrigeration systems that most places have. I therefore believe it will be more widely distributed than Pfizer’s.
How good is the vaccine? Okay it’s said to be “95% effective” and the other “5%”? Well you might still get the virus, but your reaction to the virus will be much less than if you didn’t get the vaccine in the first place. This is better than most vaccines of any kind.
What about side effects? So far the worst side effect I have heard about are headaches and some overall pain associated with the second shot. It’s a two shot vaccine. These effects are indications that the vaccine is working because your body is producing the stuff it needs to fight off the real virus, if it shows up in your body. These effects can be overcome by taking Aleve.
How does the vaccine work? It’s called mRNA technology, which is different than older methods of vaccination, and it’s superior technology, because not only does it do the typical thing that other types of vaccines do it also turns your cells into factories to spit out more of the stuff you need to not only fight off the virus but to fight off the after effects as well.
How confident are the scientists about this? Scientists tend to be reluctant to be too optimistic. But based on what they’ve seen one doctor said, “Imagine that you are at bat at the World Series and if you hit a home run, which you will, you will not only win the game but the whole series.” I’d say that’s the most confident I’ve ever heard a scientist.
Dr. Fauci said back in March or April that he liked the science behind the vaccine.
So why do I want you to buy Moderna? Because I want you to experience what I’ve been trying to tell you over the years. When I say, “I invest.” This is what I’m talking about. I would say that if you buy a share you will immediately see the stock at a slightly cheaper price. Thus bringing on the “Oh shit! What did I do?” response. Followed by the “I should have waited” beat yourself up – response. I am assuming the stock will be selling between $150 and $168.
Then I expect that late on Thursday the FDA advisory panel will approve the Moderna vaccine. The vote will be either 17-4-1 or 18-1, depending on whether the abstainer will commit. The 4 that are “No” were that way for Pfizer’s vaccine because they were concerned about 16-17 year olds. Not enough of them had been in the test group. I assume they will have similar concerns here. But as to the science and results on the majority of the population? I haven’t heard any negatives.
On Thursday the price of the stock will waffle around. Might go up, might go down.
On Friday the same thing may happen, or it may start to go up. Getting into the $170 to $173 a share territory.
By Monday or Tuesday of the following week, the vaccine will be approved by the CDC and be made available for distribution. Then the question will be “How much can they make?”
The stock may dip down (ie “Sell on the News” effect). Or it may begin its steady meteoric rise to double where you bought it. That would be $300 to $340 a share. In three years I expect it to be at $1000 a share or triple that.
Buy a share. See if I’m right.
That is all.
PS If you would, send me a note and tell me the price you bought the stock at. (Or a note telling me you ain’t a gonna do that.)
“She’s got a ticket to ride, but she don’t care…” The Beatles.
PPS – Lunch. My go to meal at Latitudes, the crab cake sandwich with white wine and sweet potato tots.