Biotech ETFs Look Promising, But Beware the Promise

Biotech ETFs

With the COVID-19 pandemic still hanging around, and with the mad scramble for a vaccine, this may seem like a great time to be invested in biotechs. Be careful.

We hear all the time that the COVID-19 pandemic has been the worst in 100 years, since the Spanish flu days. Perhaps they have never heard of AIDS, or the Asian flu, or the Hong Kong Flu, all of which racked up deaths in the millions and not just the three quarter of a million that this particular coronavirus has caused, but they at least aren’t saying this is the worst thing in history period like they did not so long ago.

Some aren’t even content on playing second fiddle to the Spanish flu over the last century. The New York Times recently ran an article with a headline that claimed that COVID-19 has killed more people than the Spanish flu did, and you had to read on to see that they were only comparing the first three months of each in New York City, where sending all those infected people back into nursing homes made COVID competitive even with the big one for a time.

There has been no limit to the level of propaganda about this particular outbreak though, and even though we could protest that the title of this article engaged in very cheap deception, the price of deception has gone down so much that it is a free good these days, like air and water.

It is even hard to figure where all of this hideous sensationalism has come from, where false information has been disseminated so widely and so shamelessly that the Chinese Communist Party surely is green with envy. They try to suppress the truth, and do a pretty good job of it, but if you can instead change the truth and get people to believe it so strongly that they get very angry when it is questioned by anyone, you have reached the pinnacle.

Joe Biden tells us that if elected, he would follow “the science,” but that’s one of the most ridiculous statements out there right now, standing out among a sea of them. It’s not even that Biden would have any say in this, but what he calls “the science” does not represent science, it is what happens when you completely ignore it.

There has been a lot of actual science done, but nothing that they want you to see. What Biden refers to as “the science” is not based upon science at all, but is instead pure propaganda. This extends to everything that we are told by these people, and not a single one of their claims has been shown to even be reasonable beyond just proclaiming what they wish us to believe is true, with nothing offered to substantiate it, and nothing asked either.

This includes the full gamut, including things like whether lockdowns or social distancing work, and the evidence we have all points to this adding to the casualties by interfering and prolonging the natural spread of an infectious agent. They even boldly claim that the “science” shows masks are protective against COVID, even though all of the studies that we have done has shown otherwise, and we have no mask that can filter out virus-sized particles in either direction.

There is a reason why people who work with viruses wear special protective suits, designed to not permit air from entering or exiting the suit, as if any air is exchanged, that’s all it takes to become infected. This is not just a hazmat suit, it is a negative pressure suit designed specifically to prevent viral infections. Maybe Joe Biden wouldn’t mind spending a gazillion dollars buying us all one, but even Bernie Sanders could not fit that many numbers on a check.

Aside from that, we know both in theory and in practice that masks do not protect us from such a thing, as viruses freely pass through them in both directions, including the COVID-19 virus, and all we have to do is an internet search to discover this, but they have people so mentally locked down that no one bothers to check any of the claims of this so-called science.

Biden and others also complain about more cases emerging from opening up the economy more, but this like a tarp on the grass where you’re looking to green it up with it but later see that it has turned it yellow. We want the rate of infection with such a virus to not be constrained, and it has been well proven that this makes things worse, interfering with the natural herd immunity that is the only way out of this. You have to look for these things on your own though as you won’t see it on the fake news.

There are also countless articles out there from real scientists describing in various ways how our response to COVID-19 has been absolutely hideous, from both a health and an economic point of view, but like a tree falling in a forest with no one around, these trees fall pretty silently overall.

Betting on Vaccines Requires That We Understand What’s Going on With Them

The reason why we bring all this up in this article on biotech stocks is that knowing what is really going on is a big advantage, and if you are going to put your money on the line, the more you know, the better off you will be. This especially includes how our warp speed vaccines are coming along.

You won’t have much of an idea of what the potential for your stocks going up by these companies selling a vaccine unless you both realize what the need for it will be as well as what sort of benefits it may convey.

This requires that we project this scenario ahead to look to get a good idea at least of what the demand will be at the point in time where a vaccine even could be rolled out, even at warp speed.

The fake media has done a heroic job of trying to create as much fear about this as they can, with no attempt nor need to disguise their extreme bias. You would think that they would show us things like infection rates and how they are changing over time, so we could see that these rates have not risen at all lately, and have come down right from the start in fact.

Never mind that only a very small percentage of all these people are at any risk, with the great majority of them not even experiencing symptoms at all, but no matter, we shouldn’t be misrepresenting the extent of this pandemic this way.

We ramped up the testing to almost a million tests a day in the U.S., where the infection rate has actually gone down, but if you test a lot more people you will discover more infections of course. Knowing this is not part of the narrative though, so it just doesn’t come up. We do need to understand this if we are getting excited about making a lot of money in biotech, where all the extra air they have blown into this balloon will escape in time, and not in all that much time either.

We’re at least 6 months out from a widespread rollout of a vaccine, and hopefully a lot longer as just about every scientist and other expert that is not on the payroll of the fakers is very disturbed about proceeding with a vaccine at warp speed. This even includes champions of vaccines such as Dr. Paul Offit, who admitted that he would vote no in a poll to measure how many people are willing, and will not submit to this vaccine unless it was shown to be safe enough for his satisfaction.

Dr. Offit is as radical of a vaccine promoter as they come, reviled by those who question their safety, fighting with all his might against anything that may even question their use, and even he is very troubled that people will just step up and get jabbed with a vaccine like this without the proper safety studies. This even scares the heck out of the pharmaceutical companies, who enjoy absolute legal immunity in the U.S. but do not have this in some countries, but they are now demanding it.

They are concerned about what happens with this vaccine for up to 4 years down the road, where if something goes wrong, they could be taken down by lawsuits if not protected against it. Any time a company tells you that something is so risky that they cannot afford to take the risk with it, but you are supposed to, that just doesn’t sound good at all.

The percentage of people who have said that they are willing to become vaccinated with whatever brew they come up with has been in decline for a while now, and the latest poll shows us that only 44% of people would say yes to this. With this still being quite a way off, we need to realize that this number will probably only go down, especially with this pandemic easing so much by then, something we can say with a pretty high level of confidence, because that’s what the real science tells us, if we bother to look.

This is all about herd immunity, and while those in favor of a vaccine will tell us that this is the goal of a vaccine, and be disappointed to see a number like this, it’s not that the vaccine will convey any herd immunity anyway. Natural herd immunity certainly will, but you have to know at least a little about how this works or at least listen to the right scientists.

It turns out that we don’t need anywhere near the 60-80% herd immunity that many think we do, although we may see that much immunity in practice when we examine the progression of an outbreak. This is just bad reasoning, as how much herd immunity often manifests and how much is required to turn the tide are two different things.

When an outbreak starts, the number of current infections grow, the total number of people infected and not just who we test positive, until such a time as enough people achieve immunity that infections start declining. As this lesser number of people get infected, this once again reduces the number of potential people to infect, and we have the herd immunity effect already manifesting on a path to an end to the outbreak.

Natural Herd Immunity Will Save Us Because There’s Nothing Else That Can

We do not know for sure how many people have been infected with this virus yet, but it is a lot of people indeed over a long period of time. Natural immunity is undisputedly much more powerful than vaccine-induced immunity, and as more and more people achieve this from being infected, the pool shrinks and then eventually dries up. The fact that all viruses of the sort that COVID is behave this way should tell us something.

We don’t just wake up one day and go over the tipping point and get to 60% or 80% or some other magic number and see a pandemic disappear before our eyes. These things are of course gradual and with each additional percentage infected, we get closer to the end.

What is really odd, but not so much if you realize what the game is here, is that people are claiming that we can get herd immunity from a vaccine or that vaccines even will protect others from catching it from you if you are infected. If anything, the opposite is true.

We already knew that this vaccine won’t do anything of the sort, so those of us who know even a little about this should not be surprised to learn that COVID vaccines have not been shown to be protective. What they do, at best, is work like a flu vaccine does, where it doesn’t really prevent you from getting COVID, but it may help you manage the symptoms. Even those working on the vaccines have been forced to admit this now, but this isn’t the sort of thing you will see on CNN, but something we do need to know if we are interested in their stocks.

It does not prevent you from shedding the virus and infecting others though, and this has also been verified in our experiments with these vaccines, but vaccines don’t work that way anyway. Not only does it not prevent infected people from passing on the virus, just getting the vaccine can cause shedding in some vaccines at least, and possibly these ones.

What concerns Dr. Offit the most though is the tendency of coronavirus vaccines to cause the virus to become not less dangerous but more dangerous, in a way that makes this a real possibility with whatever ones they end up trying. The tendency is for these vaccines to look fabulous in the trials, producing lots of antibodies, but ones that turn rabid when they come into contact with the particular coronavirus. This scares Dr. Offit, enough for him to set his extreme pro-vaccine biases aside, and should scare people who are betting on a vaccine as well, as this adds real risk to these investments.

This is not to say that such a thing may happen with this vaccine, but the potential for this is very real, and if we jump in without really understanding what we are doing, especially using millions of people as guinea pigs, our haste can indeed get us in a world of trouble with this.

The market is waiting with baited breath for these vaccines, hoping for a savior, but not focused very much on what actually may be going on with all this. Of course, seeing this resolve anyway will make them happy enough, and biotech investors will get the short end of the stick here. These stocks have held up well so far, as optimism about how much a vaccine will help and hopes that the majority will participate abound, but this is not a fairy tale that can just go on without at least being diminished significantly.

As locked down as people’s minds may be right now, there’s only so much puffing up and twisting that you can do with dwindling numbers, and the tide has already turned, in reality that is, and not just on the fictions we see in the media. The truth is coming, or at least something better resembling it, and we need to be careful with biotech as it does.

The sector, as viewed through the VanEck Vectors Biotech ETF, has already given back 8% over the last month. It is early in the expose though, and this isn’t even a time to worry about a decline being precipitated just yet, as this is probably a few months out, but this does bear watching closely.

The ETF is still up 17% for the year, but all of that is water under the bridge, and if we are looking at what stocks can be expected to continue to perform well as the pandemic continues to unfold, there are too many question marks out there to have a lot of confidence in these ones.

Our spending time looking at this frontier closely will continue to provide us with superior guidance as it has throughout this journey, versus just buying the media’s narrative and be taken far away from reality, and leaving us unprepared as it plays out. If we are going to be getting excited and being willing to bet money on things, like so many investors are with this coming vaccine, we need to benefit by looking at it from all sides, particularly the view right before our eyes. This simply does look anywhere near as exciting as many may now think, if this savior isn’t really needed and won’t really help much even if it were.

There is more to this index than the coronavirus arms race, with the U.S. seeking warp speed and the Russians launching Sputnik 5, but these things are never really that much about the business numbers, they are more about mood, and COVID vaccines have brightened the mood of the market toward these stocks. As the mood changes with time, we need a sober countenance to be able to roll with the punches as they fly and not allow our drunken perceptions to have us sticking around and taking a beating.

Investors at the very least need to be careful with this sector right now. The knock against it in the first place is its volatility, its boom or bust exposure. It’s been a boom lately, but booms do not last, and this particular one might not last for very much longer. Dealing with nightmares is so much easier if we choose to be awake.



Robert really stands out in the way that he is able to clarify things through the application of simple economic principles which he also makes easy to understand.

Contact Robert: [email protected]

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