The power to unlock the all time highs via Covid is systematically, within reach rather fast, due to the nature of drug prices which are inelastic. The effect of Gilead being treated as utility is heightened by DT putting the big orders in.
Compare the following two diagrams:
Phase III trials & Chinese red carpet
Buyers maintaining a strong floor.
In the first, you will notice how once we got the break of the channel buyers were allowed to go wandering all the way to the target on grounds of safety! The second wave looks inevitable despite the political fairydust around re-openings, stimulus is running out and now the attempt to reinstate pockets of further lockdowns will make activity immovable.
Thus the question, why adding more Gilead?
When building a long/short portfolio, we must add hedges and blocks accordingly. The strategic protection with Gilead is pragmatic, 450 million new customers unlocked via European clearance & we already got the ✅ for the red carpet from China. Complacency around the virus is remarkable, UK cheerleading "Super Saturday" and US "Independence Day" ... who would have thought we are in the middle of a pandemic. In any case... An attractive constellation for a swing towards all time highs.
Thanks as usual for keeping the feedback coming 👍 or 👎
I always look at multiple points of contact.... What is your thoughts on GILD eventually hitting trendline?
ridethepig
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@Dashtothetop a clean multi-decade chart, thanks for sharing.
ridethepig
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+/- 750 looks very far from reality at the moment. Without any new breakthroughs, even with Remdesivir 120 - 125 looks more than reasonable in my books. Of course, we also have to mention the shift of capital from public assets to private via loss in confidence. If this capital migration happens on a large scale, and USD devaluations enters into play from 2021/2022 then we can see the Dow reach new highs and send GILD a lot higher than 125... very difficult to model this far out before we clear the elections.
Padlomfaan
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@ridethepig, i agree, multiple points of contact is a solid way to trade... it just might take years to accomplish the move. Does a market cap of 950bill make sense... nope... but at the same time, looks like the man behind the curtains is losing his mind and will run the prices to the moon before they enable sensible monetary policy, and by that point monetary policy itself will be dead. So, short term high speculative to the moon, sure. that all said, i agree, a simple double in market cap is more than generous for GILD.
Padlomfaan
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is COVID moving on from vaccine, antivirals, etc, as the planet moves towards the path of herd immunity, and if so could this negatively affect GILD, or is this a Globlists pick to and using redemsivir as a thing that gets GILD into new markets such as EUR and CHINA?