Whitney Tilson’s email to investors discussing how to double the vaccine pace; U.S. calls for pause on Johnson & Johnson (NYSE:JNJ) vaccine after clotting cases; Feedback from yesterday’s e-mail; Thinking about risk; Getting vaccinated is a no-brainer.
Q1 2021 hedge fund letters, conferences and more
How To Double The Vaccine Pace
1) I got more feedback (both positive and negative) from yesterday's e-mail than any I've ever sent. People sure have strong feelings about getting vaccinated!
But before I get to that, I want to share yesterday's column from New York Times columnist David Leonhardt in its entirety because it's so important, especially now that the Johnson & Johnson (JNJ) vaccine has been paused. He lays out a compelling case for what I've been arguing for TWO MONTHS – that we should be prioritizing first doses for as many people as possible, as the U.K. has done so successfully:
How to double the vaccine pace
The development of the COVID-19 vaccines happened with great urgency, for obvious reasons.
One of the timesaving techniques by Moderna (MRNA) and Pfizer (PFE) involved scheduling the two vaccine doses fairly close together – just three or four weeks apart – during the research trials. The companies did not test multiple gaps between the two shots to see which was the most effective. They each chose a short gap to finish the trials as quickly as possible.
The decision made a lot of sense. It allowed the U.S. mass vaccination program to start in December, rather than pushing it back a few months. Many lives have been saved as a result.
U.S. Calls for Pause on Johnson & Johnson Vaccine After Clotting Cases
2) This news is very unfortunate: U.S. Calls for Pause on Johnson & Johnson Vaccine After Clotting Cases. Excerpt:
Federal health agencies on Tuesday will call for an immediate pause in use of Johnson & Johnson's single-dose coronavirus vaccine after six recipients in the United States developed a rare disorder involving blood clots within about two weeks of vaccination, officials briefed on the decision said.
All six recipients were women between the ages of 18 and 48. One woman died and a second woman in Nebraska has been hospitalized in critical condition, the officials said.
Nearly 7 million people in the United States have received Johnson & Johnson shots so far, and roughly nine million more doses have been shipped out to the states, according to data from the Centers for Disease Control and Prevention.
Assuming no further cases emerge, however, I hope regulators quickly allow the resumption of the J&J vaccine (and ditto for European regulators and the AstraZeneca (AZN) vaccine, which has also been linked to blood clots). The reason is simple math: the blood clots appear to be incredibly rare – less than one in a million (six cases out of 7 million shots), resulting in only one death.
Let's compare these numbers to a conservative back-of-the-envelope estimate of what would have happened in the absence of the J&J vaccine...
Seven million people would not have been vaccinated in the past two months. Over that period, cases have averaged roughly 65,000 per day. Since the actual number of people infected with COVID is multiples of cases, I'm going to estimate 200,000 infections per day. There are 209 million Americans over age 18, so that means roughly one in 1,000 adults was getting infected with COVID every day since the J&J vaccine launched. That means 7 million vaccinations prevented roughly 5,000 infections (in trials, it was 72% effective in the U.S.), maybe 250 hospitalizations, and 10 to 20 deaths every single day.
Now compare those numbers to six people in total who got blood clots, one of whom died and another got very sick.
Conclusion: The government is right to temporarily halt J&J vaccinations so it can quickly evaluate the blood clot risk. But unless many more cases and deaths emerge, we should quickly resume using this highly effective, single-dose vaccine.
Feedback From Yesterday's E-mail
3) The feedback from yesterday's e-mail tended to be from one extreme or the other. On the positive front, I received many nice e-mails like these:
- "I wish I could confer on you an honorary degree in public health. Thank you SO much. (from a former state health department director)"
- "Great piece, glad you are willing to take on the vaccine skeptics. I am reminded of the controversy over mandating seatbelts in cars back when I was in high school, when some folks claimed a requirement to use seat belts abrogated their freedom. However, I believe almost everyone now uses seatbelts and many lives have been saved and serious injuries avoided because we are required to buckle-up! Keep up your good work!"
- "Regarding requirements helmets or seatbelts, I feel requiring vaccinations is more like requiring you not drive drunk. A helmet or a seatbelt saves your life, driving sober saves your life and others'. You may want the freedom to kill yourself, but not to kill others."
- "I analogize Covid to stage 1 skin cancer (similar death, some after-effects) – except I ask them to imagine if stage 1 skin cancer can be caught like the common cold and if it goes bad you'll never see your kids/grandkids in person again. So you're telling me you'd be fine with that? And to transmit to other people? No! You'd be getting vaccinated. Well, I say that but at end of day this seems increasingly politically intransigent in nature. As someone who used to consider myself center-right, there is a huge swath of our population where logic seems to no make sense anymore and it feels like it increasingly comes down to that, which is a bigger problem. Good for you for putting yourself out there to say it, although I suspect the intended audience has heard it and somehow managed to mentally filter it somehow."
But many readers didn't like what I wrote:
- "A seat belt and a helmet are NOT injected into my body. A covid vaccine was approved for emergency use with the best info at the time. It was not authorized by the FDA."
- "The difference in definition of freedom is PRECISELY the difference between Democrats and Republicans. All good people. Just different views of what risks/rewards people are willing to take, and whether that should be voluntary or not."
- "This is a horrendous take Whitney. Dividing society up between the vaccinated and unvaccinated is a horrible, horrible idea. It's completely OK to be afraid of a virus that mostly effects elderly and vulnerable people. But if you don't like the idea of being injected with new experimental vaccines then you're a crazy anti-vaxxer conspiracy theorist... We're headed toward having a social credit score like in China. I guess we should all just accept this."
Thinking About Risk
Lastly, a few readers pointed out my propensity to take risks, so who am I to criticize others if they choose to do the same:
- "I agree with your take on vaccine freedom. I do have a question for you. You have commented in recent weekly that we need to be patient for a few more months and not let up too early. But you seem to be travelling a lot. From what I've read it's unclear if the current vaccines protect against the South African variant of the virus. But you seem to be comfortable going to South Africa? It seems irresponsible to travel to South Africa at this point in time. There is a risk that you could bring more of this variant to the U.S. and it seems very inconsistent with your desire for people to show patience. How do you reconcile this? Am I missing something about the variant or the vaccine?"
- "Your own chances of being in a serious accident during a mountain climb are dramatically higher than by not being vaccinated. We all worry about you more when you depart on such trips than when you walk outside NYC."
- "Did you travel during Covid and prior to the vaccine? Wasn't that freedom? Or was it stupidity?"
My response: First, COVID has dropped to almost zero here in South Africa:
More broadly, it's true that, throughout the pandemic, I've been willing to take some degree of risk of catching COVID by, for example, volunteering at the Samaritan's Purse field hospital, flying around the country to climb and ski, going to Kenya for three weeks around the holidays, playing tennis regularly, etc.
Over the past year, pretty much every person on Earth has had to balance risk and reward. Every time you stepped out of your house or had contact with another human being, you were taking some degree of risk of catching COVID. Obviously, the more traveling, the more contact with others (especially indoors), the more risk.
Every person is going to have a different answer to these tough, constant questions, depending on their tolerance for risk, the downside if they got COVID (age, health, comorbidities, access to healthcare), and how much they value going out, spending time with friends and family, traveling, and engaging in various activities.
Because I: a) have a high tolerance for risk... b) am not likely to be hospitalized much less die if I get COVID... and c) place a very high value on seeing friends and family and engaging in all of my favorite activities, I chose to take a moderate degree of risk throughout the pandemic.
So, I have no quarrel with anyone who carefully evaluates the risk-reward equation and makes a rational decision to take a certain amount of risk.
My problem is with people who are irrational. For example, it's complete madness to refuse to wear a mask – not because there's huge reward (it probably only slightly reduces your chances of getting infected), but because the cost is so low. On a scale of 0-10, the reward is perhaps only a 3, but the risk is 0.
Similarly, the people I see crowded into indoor bars and clubs before they've been vaccinated aren't thinking very clearly because the reward is small (they could easily socialize outdoors in a smaller group) relative to the very high risk of getting infected. A level-five risk makes no sense if the reward is 2.
Getting Vaccinated Is A No-Brainer
Which brings me to my final point about getting vaccinated: Yes, there's some risk, both of things we know about (feeling crappy the next day, a microscopic chance of a blood clot, etc.) as well as things we don't know about (the vaccines are so new that we can't rule out some sort of adverse long-term outcome).
But as of today, according to Bloomberg's vaccine tracker:
More than 814 million doses have been administered across 152 countries. The latest rate was roughly 18.3 million doses a day.
In the U.S., 192 million doses have been given so far. In the last week, an average of 3.38 million doses per day were administered.
So it's not like someone getting vaccinated today is the proverbial guinea pig.
Thus, while there's lots of conjecture and speculation, nearly all of the evidence is that the vaccines are extremely safe. Let's call it a level-two risk.
As for the reward, nearly all of the evidence is that the vaccines are extremely effective in reducing the likelihood of catching COVID, spreading it, and getting sick from it. The reward is clearly a 10.
In conclusion, the risk-reward equation here is so favorable that I view getting vaccinated as the ultimate no-brainer.
Best regards,
Whitney
