Argonaut fund manager Barry Norris has told Portfolio Adviser why he is shorting vaccine companies in his Absolute Return portfolio, describing them as a “speculative bubble”.
In the video above, the contrarian manager explains why he believes groupthink has led markets to be priced on consensus and how it is better to be on the other side of the trade.
“If you have the capacity for independent thought and are prepared to do your own research, there are a lot of opportunities, particularly on the short side,” he said.
Norris believes even if a successful Covid vaccine is found, the best-case scenario is that it mitigates the virus rather than eradicates it, as is the case with influenza vaccines that currently exist.
“I would suggest any vaccine would work similarly to flu vaccines in that if you can take the right one relative to the strain of influenza over winter they are 50% effective in reducing symptoms, but they don’t stop the infection of influenza.
“Every year between 350,000 and 650,000 people die from influenza even though there is a vaccine taken by a lot of people every year.”
Norris thinks anyone hoping for a Covid vaccine to suddenly solve the problem is “naïve”.
“Not only do I think these companies are not going to earn super-normal profits but obviously people who are relying on a vaccine as a way out of this deep lockdown hole are frankly deluding themselves.”
Watch the video above to find out more.
