There’s no disputing the evidence – the Covid-19 vaccine works. Data from highly inoculated countries – such as the United Kingdom and Israel – shows that 95% of patients requiring hospitalisation due to Covid were unvaccinated. There’s an assumption that the vaccine prevents you from contracting the virus. This is not so. What it does, however, is significantly reduce your chances of getting life-threateningly ill. As BizNews founder Alec Hogg wrote in an earlier newsletter, “the case for vaccines, especially of older people, is incontrovertible.” Below, Sean Peche of Ranmore Fund Management looks at the question of whether to vaccinate or not, by using a money manager’s approach. – Jarryd Neves
By Sean Peche*
Read lots of books about the best investors and traders in the world, and youâll discover two things:
1. They manage risk
2. They are open to changing their mind
But donât take my word for it, hereâs what they say about it –
Paul Tudor Jones – âRisk control is the most important thing in trading.â
Sam Zell – “Never risk what you cannot afford to lose.”
George Soros – âIt’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.â
Nicholas Nassim Taleb – âIf a gambler has a risk of terminal blow-up (losing back everything), the âpotential returnsâ of his strategy are totally inconsequential.â
And what about being open-minded?
Charlie Munger – “You have to have the habit of re-examining your old ideas all the time. Because if you don’t, they’ll become so firm you can’t see it when they become wrong. You have to have the habit, like house cleaning, you just can’t let the dust pile up. So you got to clean out your idea cabinet all the time and throw out the bad ideas and put in better ones. You just can’t get through life successfully without it.”
Bruce Berkowitz – “Facts change, we change.”
Stanley Druckenmiller – “Probably one of my greatest assets over the last 30 years is that Iâm open-minded and I can change my mind very quickly.”Â
Steve Clark – “Really good traders are also capable of changing their minds in an instant. They can be dogmatic in their opinion and then immediately change it.”
Dan Loeb â âYou have to kind of listen to the market and be willing to have your stories challenged and be willing to change them. Thereâs a distinction between sticking to your beliefs that you know to be true, and sticking to an opinion or theory you have, that may or may not be true.â
Marc Andreessen – “Conviction. Conviction. Conviction. New facts. Change.”
Pretty consistent, you agree?
Good – now think of your vaccine strategy:
1. Are you managing your risk?
2. Are you open to changing your mind?
Because the UKâs surveillance report week 26 said this:
“Vaccine effectiveness against hospitalisation with 2 doses of the Pfizer vaccine is around 98% and with 2 doses of the AstraZeneca vaccine around 94%
And the report in week 31 said this:
“Vaccine effectiveness against mortality with 2 doses of the Pfizer vaccine is around 95 to 99% and with 2 doses of the AstraZeneca vaccine around 75 to 99%”
On 4th December 2020 only 2 people had been vaccinated worldwide.
And on the 8th August, 2.3bn people have had one dose – 2.3bn data points.
So when did you form your view?
Because who doesn’t want to take 99% odds of living?
And yet, everyday, I read sad stories of young, fit and healthy people who – on their deathbed – tell their siblings, partners or parents, that they wish they’d been vaccinated. But they didn’t, because they thought they only had a 2% risk.
Sadly, it seems they hadnât read Sam Zellâs quote and risked what they couldnât afford to lose.
- Sean Peche is director and portfolio manager at UK-based Ranmore Fund Management
Comment from BizNews community member Penney Edwards
Morning Alec,
Just got my usual update of news on BizNews this morning.
I was surprised to read the article by Jarryd Neves. It seems to add very little helpful information regarding vaccines generally. I am always looking for factual input as we navigate this.
Jarryd and Sean have shared 10 specific direct quotes from investment experts regarding the management of risk. They have taken the time to reference which expert said which quote.
The veracity of the article however hinges entirely on the opening statement; that is, Sean reads daily of âdeathbed regrets from young, fit and healthy people who final wishes were that they took the vaccineâ. Given that I havenât read even one it is fascinating to hear that others are exposed to a diet of daily news so different to mine.
Please could the authors share the daily quotes and reference details for the last 2 months of these sad stories. I would even settle for the last 30 daily stories.
Facts matter.
Sean Peche’s response:Â
Hi Penney,
I hope you, Chris and your children are well.
Alec kindly forwarded me your email and while I was a little hesitant to wade into this Vaccine discussion yesterday, a confluence of events inspired it, including: Philip Grayâs email to Alec he cited the prior day, some recent discussions with a few vaccine sceptical friends of mine and hearing Marilyn who is a Paediatric ICU at Evelina London (St Thomasâ) tell me a couple of days ago about a 14 year old currently ventilated on their ward, as well as stories that have come across my twitter feed in recent days. So I thought some relevant quotes from some people who have made the most from balancing risk & reward may be useful to some people. Furthermore, in a changing world and markets, risks are constantly changing and so that requires an open mind which is why I also included a few of those quotes.
I completely agree with you, facts do matter and I think they matter a lot. And if you read my linked-in posts and tweets, youâll see theyâre mostly fact based about: Chinese corporate VIE structures, or what companies are saying about inflation or asking how Deutsche bank can be a fraction of the size of Pinterest.
And thatâs why I cited the facts included in UK Surveillance reports
My skills donât extend to medicine so Iâm happy to let that fraternity wade through all the clinical studies and facts. Marilyn also tell me she knows of no colleagues who havenât been vaccinated and theyâve all witnessed this disease first hand and looked at lung x-rays for the past year.
A good friend who is an Adult Intensive Care consultant at Winchester Hospital told me yesterday that during the first wave, his patients were mostly: old, overweight, and people of colour. But that is not the situation today where the patients are just getting younger and younger, partly due to lower vaccine rate among that population, but also because the virus is mutating. Now, perhaps thatâs just an example of how things are changing because I donât recall reading of 42 year old iron men dying last year. And I worry people think weâre still dealing with the Covid of last year.
So thatâs the background to my decision and article.
I havenât saved every article or tweet I come across but here are the ones that impacted me the most and I hope you find them useful.
https://www.bbc.co.uk/news/stories-57866661
Best
Sean.
