WHO chief scientist: No evidence that any drug reducing mortality of patients

Runs counter to the implied talking points from Pres. Trump

The WHO chief scientists is on the wires saying that:
  • No evidence that any drug reducing mortality of patients that have Covid 19.
He adds nevertheless that:
  • experts advise the continuation of all forms of the solid parity trial including hydroxychloroquine srm
  • No reason to modify clinical trial of hydroxychloroquine in Covid 19
There has been some leakage to the downside in the US stock indices of the last few minutes. The NASDAQ index is currently trading at 9649 after trading is highs 9678.77. The S&P index is trading at 3114.66 vs. a high of 3119.95.
Other Covid 19 news headlines.
UK’s Johnson says:

  • the air quarters only to be considered when it is a safe
  • no one is safe until we all are safe from the virus
  • urges people to not move outdoor gatherings indoors if it rains
  • there could be a 2nd wave of virus across the world
  • the UK chief science advisor adds have to tread cautiously in lifting UK lockdown
in Italy, PM Conte is saying:
  • facts show that virus has disappeared
  • virus reconstruction is the time for long-delayed reforms
  • government working to speed up 8 payments
Italy reports 321 new coronavirus cases vs. 318 on Tuesday. The death toll rose by 71 vs. 55 on Tuesday
New York said that the cases rose by 0.3% vs. the 7 day average of 0.4%.
Finally New Jersey’s governor Murphy is out saying:
  • deaths reach 11,880 and cases reach 162,068
  • he urges protesters to keep distance and wear masks during George Floyd demonstrations.
  • At least 6 demonstrations today in New Jersey

Moderna reports ‘positive data’ on early-stage coronavirus vaccine trial

Just about everyone is making vaccine progress these days

It is tough to try and make sense of the developments of a coronavirus vaccine when we are trading on whatever the companies are telling us, rather than the science of it. But hey, that’s what happens when you don’t have that medical/biotech background.
In a statement today, Moderna is saying that it has had ‘positive data’ from its early-stage human trial for a coronavirus vaccine. Shares are jumping by more than 10% in pre-market as the company reports on their progress and this is also lifting general sentiment.
According to reports, the vaccine helped to produce coronavirus antibodies in all 45 participants of the trial. From a report by CNBC:



Gilead arguably has the best science in the business. But success in Biotech / Pharma is reserved for those who keep their customers alive, but milk them forever by not curing them of anything.

Hits against Gilead:

1. Gilead did not make any friends by creating the Gardasil vaccine for HPV, which killed the downstream pipeline for those companies that would have treated HPV for 40-50 years.

2. Gilead does not have deep hooks inside the FDA either

Regeneron on the other hand has deep contacts inside the FDA and also practices the milking-forever business model. If they package dried-prunes as a cure for Covid, FDA will merrily approve it.

US hydroxychloroquine study shows no benefit to the drug for COVID-19

Study shows more deaths

The anti-malaria drug hydroxychloroquine wasn’t effective in keeping people with coronavirus from needed mechanical ventilation, according to a study of 368 patients in US veterans hospitals.
This wasn’t a blind test but here are the numbers, via AP:

Researchers analyzed medical records of 368 male veterans hospitalized with confirmed coronavirus infection at Veterans Health Administration medical centers who died or were discharged by April 11.

About 28% who were given hydroxychloroquine plus usual care died, versus 11% of those getting routine care alone. About 22% of those getting the drug plus azithromycin died too, but the difference between that group and usual care was not considered large enough to rule out other factors that could have affected survival.

The upshot here could be that only cases that were particularly bad were given the drug, so the sample is biased. That said, it didn’t work.

Full-scale studies are coming in the days ahead.

China said to urge its citizens to delay foreign travel over virus fears

AFP reports

From the headline, it doesn’t appear to be a hard rule but more of a travel advisory – along the lines of asking travelers to reconsider their plans. These travel warnings have always been a bit of a blur line and in my view, I don’t ever see them having much impact.

But if we do see a significant drop in Chinese travelers around the world, expect that to weigh on global economic conditions even more to start the year – especially in economies that rely heavily on tourism and services.

Your questions -My answers

questionandanswerThe Cardinal Sin Of Trading

Q:  Do you believe in the rule of not letting a winning position turn into a loser? If you do, how do you handle a situation where a stop out at the ATR would cause you to take a loss on a position that was a winner at one time?

A:  This has been called the cardinal sin of trading – to let a profitable position turn into a loser. But, it happens. And, just because it does happen, doesn’t mean that it provides you with an excuse not to take your medicine and own the loss.

When we are wrong and we do have a good trade go against us, our top priority remains capital preservation. Therefore, if when painful, we cannot let a small loss grow into a larger one. The worst thing in the world is letting a bad trade turn into an investment and being held hostage by the break-even curve. That’s why stops are important and why sticking to them, even if it requires you to exit with a loss, is mandatory.

Buy The Dippers

Q:  You sometimes refer to the “buy the dippers” in a what seems to me to be a negative tone and yet you also describe part of your style as buying on pullbacks. How do you distinguish these two ideas?

A:  That’s funny you mention this and I appreciate it especially as you say I fall well within the “buy the dip” camp. I have no problem with the buy the dippers as long as they’re present and in charge of the tape, we’ll be just fine. But, the problem is, of course, that if every dip gets bought, at some point Mr. Market will figure out a way to roll back that trade and gain back some respect for his ability to cause the most amount of frustration to the majority. This will ultimately lay the foundation for a nasty bull trap scenario where everyone is long at the wrong time and then caught with their pants down in a sizable reversal. In my experience, when any trade becomes a routine money-maker, you have to expect the market to throw you a monkey wrench. There’s no room for complacency and whenever I have something that works like clockwork and others have figured out the same, I get nervous.


On June 13, 1986 Charles T. Munger delivered the commencement address at Harvard University.

In it, Munger borrows from an earlier commencement address by the late night host Johnny Carson.  Carson shared with the  graduating class that although he could not not tell them how to be happy, he could share with them from personal experience how to be miserable.

Carson’s prescription for a life of misery?

  1. ingestion of  chemicals to alter mood or perception
  2. envy
  3. resentment

Munger adds to Carson’s prescription with four more ways to guarantee a life of misery:

  1. be unreliable: do not faithfully do what you have promised yourself or others
  2. learn everything you possibly can from your own personal experience, minimizing what you can learn from the good and bad experience of others, living and dead
  3. go down and stay down when you get your first, second, and third severe reverse in the battle of life (i.e., if at first you do not succeed then do not try again)
  4. ignore evidence contrary to your opinion by remaining certain in your views


Overcoming the Fear of Loss in Trading

The fear of “pulling the trigger” stems mainly from the fear of loss. That same fear is responsible for 3 major actions or inactions that destroy traders:

  1. Cutting winners short. You take what you can and fear that if you don’t grab whatever small gains you have now, they would disappear.
  2. Keeping losers. You don’t dare to actualize your losses and hope that the trade will turn around.
  3. Unable to take every valid trade setup. You don’t dare to pull the trigger because you have associated the intense negative emotions of losing or the possibility of losing with being in a trade, so you escape from experiencing those feelings by not entering into a trade.

Psychology was never an issue when I was swing trading stocks, but has now become a major stumbling block when I am trading intraday futures. Hence I have just started to look into this.

All three psychologists mentioned the need to trade small. Other advice include doing visualization exercises, mindfulness exercises, and looking at the bigger picture.

I also found two resources with mindfulness training and a related webinar, links below.

Dr Brett Steenbarger

  • If it is due to lack of confidence in the system, back test and/or paper trade the system.
  • If it is due to fear of loss (Steenbarger calls it performance anxiety), do visualization exercises where you picture yourself in the stressful situation but doing the right thing and keeping yourself in the right frame of mind. Also paper trade and trade small. (more…)

He was once probably the richest man. They were bringing in $1B a year in profits in 1978.

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During its heyday, Pablo Escobar’s drug cartel spent $2,500 per month on rubber bands for bricks of cash. Mental Floss has a interesting profile of the drug lord.

The profits were astronomical at every step. In 1978 each kilo probably cost Escobar $2,000 but sold to Lehder and Jung for $22,000, clearing Escobar $20,000 per kilo. In the next stage they transported an average of 400 kilos to south Florida (incurring some additional expenses in hush money for local airport authorities) where mid-level dealers paid a wholesale price of $60,000 per kilo; thus in 1978 each 400-kilo load earned Escobar $8 million and Lehder, Ochoa, and Jung $5 million each in profits. Of course the mid-level dealers did just fine: after cutting the drug with baking soda each shipment retailed on the street for $210 million, almost ten times what they paid for it.

Soon Lehder was hiring American pilots to fly a steady stream of cocaine into the U.S., paying them $400,000 per trip. At one trip per week, in 1978 this translated into wholesale revenues of $1.3 billion and profits of $1 billion.

If you don’t learn from your losses who will?

If you don’t try you don’t fail, if you don’t fail you don’t learn, if you don’t learn you don’t grow” – Om Malik

Failure is an inherent part of trading. No trader can get every trade correct. One of the lessons in the new Jack Schwager book, Hedge Fund Market Wizards, is that “Don’t try to be 100% right.” In fact the pursuit of perfection in trading will likely lead to catastrophic results. That is why some perspective on failure and loss is a key to staying in the trading game.

Atul Gawande, a surgeon and writer, has an interesting piece up at the New Yorker which is a transcript of a commencement speech he recently gave at Williams College.* Although he is discussing medicine his perspective on failure is worth contemplating. Here is a quote:

So you will take risks, and you will have failures. But it’s what happens afterward that is defining. A failure often does not have to be a failure at all. However, you have to be ready for it—will you admit when things go wrong? Will you take steps to set them right?—because the difference between triumph and defeat, you’ll find, isn’t about willingness to take risks. It’s about mastery of rescue.

It is a bit of cliche to say that your trading losses represent tuition paid. If you don’t learn from your own failures no one will. Those losses will then be not just a financial loss but a lost opportunity as well.

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