Your opinion matters, please vote.
Wednesday, August 24, 2011
Do you expect Bernanke to announce (or strongly hint at) a QE3 program this Friday at Jackson Hole?
Do you expect Bernanke to announce (or strongly hint at) a QE3 program this Friday at Jackson Hole?
Your opinion matters, please vote.
Your opinion matters, please vote.
Thursday, August 18, 2011
Tuesday, May 10, 2011
Why this summer will be the most boring trading season since the summer chop-fest-palooza of 1994.
In March of 2011 a massive magnitude 9 earthquake hit the World's 3rd largest economy, this earthquake triggered a tsunami with waves of up to 125 feet high, and the incident damaged a nuclear power plant to the point were a 'Nuclear Meltdown' seemed almost unavoidable. In total 14,949 people were confirmed dead, 5,279 were seriously injured, and the estimated overall cost of this natural disaster is around $300 Billion dollars.
As you well know, all of our global markets are interconnected and a crisis in Europe or Japan, or anywhere else in the world will effect our US markets. But how did the S&P 500 react to one of the deadliest, most destructive earthquakes in Japan's history? From March 11, the day that the earthquake hit, to March 16, it only went down for 3 days and dropped a measly 3.5%. Now, if the threat of a nuclear meltdown and the destruction of one of the World's major economies was viewed upon by the markets as an "insignificant event", there is virtually nothing that will rile the markets, especially during the summer trading chop-fest when a significant portion of Wall Street's elite will be vacationing in their summer homes in the Hamptons or off vacationing in Tahiti.
The simple fact of the matter is that nothing will ever compare to the absolute destruction, devastation, and utter pandemonium that spread across the globe as a result of the Housing Crash and the ensuing Financial Crisis. Firms that had been around for 150 years, that had survived through the great depression, collapsed in 2008. GM went bankrupt, AIG received billions of dollars in bailouts, Citi group same thing, the VIX went up as high as 89, and there were days when the Dow Jones would make 1,000 point intra-day swings. We'd be up 400 points in the morning just to end the day down 600 points. Shares of Bank of America were routinely moving 25% from one day to another. For those of us who lived through and witnessed financial companies that were leveraged 40-to-1 destroy the XLF financial ETF, causing it to fall 82% in a little less than 2 years, everything else just seems a little quaint.
Trading and investing has become boring again. Things are neither massively risky, grotesquely overvalued, or hugely undervalued. My advise to you for this summer is, forget about the markets. Nothing of any real importance is going to happen between June and August. Just buy the stocks you love, sell the pieces of junk you might still own, and don't make another trade until September. In the mean time, if you can afford it, go out and spend every single day at the beach, travel to Europe, take your kids to Disney Land, go spend a week on the beaches of Australia, visit Hawaii or Brazil, go see Katy Perry, Rhianna, or the Black Eyed Peas in concert. Have some fun this summer! Sleep in as many hotels as you can. The market is going to be a snooze fest for the next 3 months.
Follow me on Twitter
As you well know, all of our global markets are interconnected and a crisis in Europe or Japan, or anywhere else in the world will effect our US markets. But how did the S&P 500 react to one of the deadliest, most destructive earthquakes in Japan's history? From March 11, the day that the earthquake hit, to March 16, it only went down for 3 days and dropped a measly 3.5%. Now, if the threat of a nuclear meltdown and the destruction of one of the World's major economies was viewed upon by the markets as an "insignificant event", there is virtually nothing that will rile the markets, especially during the summer trading chop-fest when a significant portion of Wall Street's elite will be vacationing in their summer homes in the Hamptons or off vacationing in Tahiti.
The simple fact of the matter is that nothing will ever compare to the absolute destruction, devastation, and utter pandemonium that spread across the globe as a result of the Housing Crash and the ensuing Financial Crisis. Firms that had been around for 150 years, that had survived through the great depression, collapsed in 2008. GM went bankrupt, AIG received billions of dollars in bailouts, Citi group same thing, the VIX went up as high as 89, and there were days when the Dow Jones would make 1,000 point intra-day swings. We'd be up 400 points in the morning just to end the day down 600 points. Shares of Bank of America were routinely moving 25% from one day to another. For those of us who lived through and witnessed financial companies that were leveraged 40-to-1 destroy the XLF financial ETF, causing it to fall 82% in a little less than 2 years, everything else just seems a little quaint.
Trading and investing has become boring again. Things are neither massively risky, grotesquely overvalued, or hugely undervalued. My advise to you for this summer is, forget about the markets. Nothing of any real importance is going to happen between June and August. Just buy the stocks you love, sell the pieces of junk you might still own, and don't make another trade until September. In the mean time, if you can afford it, go out and spend every single day at the beach, travel to Europe, take your kids to Disney Land, go spend a week on the beaches of Australia, visit Hawaii or Brazil, go see Katy Perry, Rhianna, or the Black Eyed Peas in concert. Have some fun this summer! Sleep in as many hotels as you can. The market is going to be a snooze fest for the next 3 months.
Follow me on Twitter
Saturday, April 2, 2011
Some very sloppy and lazy reporting on $LULU
An article on Lululemon was published at Yahoo Finance on Friday April 1st (maybe this is a bad April fools joke?) titled, "Has Lululemon has stretched its value to the limit?". Besides the bad grammar in the title, the article is littered with misinformation. It is so bad it's almost like the article is talking about a different company. Basic facts such as what the price of the stock is/was, what date the company reported earnings on, and, apparently, even how much the stock moved in percentage terms are all completely, absolutely wrong.
Firstly let me give you the link to the article I am talking about here. I also took a screen-shot of it in case they take down the page.
Firstly, the article states that shares of Lulu were trading at $94 on March 30.
This is just flatly wrong. Whether we're talking about the shares that trade in Canada ($LLL) or the shares traded here in the US ($LULU), shares of lulu have NEVER traded above $90 on a closing basis. They have made an intra-day high of $90.96 but this is still $3 away from where the article says they were trading (are we even talking about the same stock?). Also Cramer didn't feature Lulu on his show on the 30th. His latest piece on Lulu was on the 25th. You can see it here.
Then the article says that the company reported earnings on March 26 and that the shares rose 15% on that day!
Not only did lulu NOT report earnings on the 26th (which was a Saturday), the shares also traded lower on the earnings release! They reported on the 17th. I know this first-hand because I owned some March call options on LULU that ended up expiring worthless because of the drop & OPEX the very next day. Lulu's latest big one-day gain (which caused me to have a Yogasm) occurred on March 28th, when Lulu announced a 2-for-1 stock split, posting an 8.4% gain on the day, not 15% (I wish).
The lesson to be learned here is this: Always do your own research from reliable sources. If sloppy, lazy reporting like this can get on a reputable website like Yahoo Finance, imagine how wrong and inaccurate information could be at other lesser known websites.
Firstly let me give you the link to the article I am talking about here. I also took a screen-shot of it in case they take down the page.
Firstly, the article states that shares of Lulu were trading at $94 on March 30.
This is just flatly wrong. Whether we're talking about the shares that trade in Canada ($LLL) or the shares traded here in the US ($LULU), shares of lulu have NEVER traded above $90 on a closing basis. They have made an intra-day high of $90.96 but this is still $3 away from where the article says they were trading (are we even talking about the same stock?). Also Cramer didn't feature Lulu on his show on the 30th. His latest piece on Lulu was on the 25th. You can see it here.
Then the article says that the company reported earnings on March 26 and that the shares rose 15% on that day!
Not only did lulu NOT report earnings on the 26th (which was a Saturday), the shares also traded lower on the earnings release! They reported on the 17th. I know this first-hand because I owned some March call options on LULU that ended up expiring worthless because of the drop & OPEX the very next day. Lulu's latest big one-day gain (which caused me to have a Yogasm) occurred on March 28th, when Lulu announced a 2-for-1 stock split, posting an 8.4% gain on the day, not 15% (I wish).
The lesson to be learned here is this: Always do your own research from reliable sources. If sloppy, lazy reporting like this can get on a reputable website like Yahoo Finance, imagine how wrong and inaccurate information could be at other lesser known websites.
Monday, March 28, 2011
Tweibo, Super-Bowl, and Old Media Obsolescence TWIT SINA
How does Twitter make money?
What is Twitter's business model?
They have hundreds of millions of people using their service but how will they monetize that?
These are all reasonable questions to have about a company that is supposedly trading at nose-bleed, bubbly valuations, and has no idea how to generate revenue. The answer is very simple: As of July, 2010, Twitter had 190M users. If you wanted to advertise to those 190M users by having Twitter send each one of them a tweet, how much would it cost?
To put these numbers into perspective, let's compare Twitter's user base to a traditional media event with a similar number of "users", the Super-Bowl. Super-Bowl ads which only reached 90M viewers in 2010 (according to Nielsen) cost an estimated $2.6M per ad in 2010. That's approximately a cost of $28.8 for every person reached by the ad. If we assume that 10M Twitter accounts are spam-bots, that still leaves us with around 180M active users. If Twitter charged the current Super-Bowl ad rate to send 1 AdTweet (or RevTweet = Revenue Generating Tweet) to all of its users, it would have the user base necessary to justify a price of $5.2M per AdTweet, double the cost of 1 Super-Bowl ad. As such, Twitter would only need to send 192 AdTweets per year to be a $1 billion dollar company in terms of annual revenues. That's less than 1 AdTweet per day. No one would have a problem with that. I follow around 200 people, in one hour I see between 140-180 tweets, so 1 adtweet per day would be a tiny fraction of the total.
For the most part, if you are reading this post, you know that what I am about to say is very true. People use Twitter more than crack addicts use crack. I personally use Twitter every single day of the week, 24 hours per day (who doesn't?). In other words, if I'm awake, I'm using Twitter. We are all hopelessly addicted to it and for a very good reason. Twitter has single-handedly become society's #1 source for news. It has made television, radio, and newspapers almost completely obsolete for getting breaking news. By following the right people, you can hear the latest breaking news hours before it gets reported on TV or radio, and 24 hours before it hits the pages of the newspapers. In a sense, active Twitter posters have become society's new news broadcasters sharing videos, pictures, and news with the world. Social Media News is destroying Old Media News.
[Warning]***
This post divulges into wild-eyed speculation beyond this point.
[/Warning]***
Furthermore, it is even possible that in the future either Twitter or Weibo is going to acquire its rival, or they are going to merge. Weibo is exactly like Twitter, 140 characters and all, the only difference is that Sina is headquartered in China and is made for the Chinese speaker. From a business standpoint it would make sense as it would create a massive social media audience to whom you could advertise to. However, pause for a moment and just think of all the implications such a merger would have. A large portion of Chinese citizens already know how to speak English. This platform would allow, for the first time ever, Chinese citizens to talk directly with random or specific US citizens, at virtually no cost, and would allow for finding and meeting new people (networking). Imagine half of your followers being from China. If such a union ever took place, it would not be that hard to see out 75 years into the future a World in which the dominant global language is some mixture of English and Chinese as a direct result of Tweibo.
Disclosure: I currently do not own SINA but I will soon.
You can follow me on Twitter at @elwalvador
What is Twitter's business model?
They have hundreds of millions of people using their service but how will they monetize that?
These are all reasonable questions to have about a company that is supposedly trading at nose-bleed, bubbly valuations, and has no idea how to generate revenue. The answer is very simple: As of July, 2010, Twitter had 190M users. If you wanted to advertise to those 190M users by having Twitter send each one of them a tweet, how much would it cost?
To put these numbers into perspective, let's compare Twitter's user base to a traditional media event with a similar number of "users", the Super-Bowl. Super-Bowl ads which only reached 90M viewers in 2010 (according to Nielsen) cost an estimated $2.6M per ad in 2010. That's approximately a cost of $28.8 for every person reached by the ad. If we assume that 10M Twitter accounts are spam-bots, that still leaves us with around 180M active users. If Twitter charged the current Super-Bowl ad rate to send 1 AdTweet (or RevTweet = Revenue Generating Tweet) to all of its users, it would have the user base necessary to justify a price of $5.2M per AdTweet, double the cost of 1 Super-Bowl ad. As such, Twitter would only need to send 192 AdTweets per year to be a $1 billion dollar company in terms of annual revenues. That's less than 1 AdTweet per day. No one would have a problem with that. I follow around 200 people, in one hour I see between 140-180 tweets, so 1 adtweet per day would be a tiny fraction of the total.
For the most part, if you are reading this post, you know that what I am about to say is very true. People use Twitter more than crack addicts use crack. I personally use Twitter every single day of the week, 24 hours per day (who doesn't?). In other words, if I'm awake, I'm using Twitter. We are all hopelessly addicted to it and for a very good reason. Twitter has single-handedly become society's #1 source for news. It has made television, radio, and newspapers almost completely obsolete for getting breaking news. By following the right people, you can hear the latest breaking news hours before it gets reported on TV or radio, and 24 hours before it hits the pages of the newspapers. In a sense, active Twitter posters have become society's new news broadcasters sharing videos, pictures, and news with the world. Social Media News is destroying Old Media News.
[Warning]***
This post divulges into wild-eyed speculation beyond this point.
[/Warning]***
Furthermore, it is even possible that in the future either Twitter or Weibo is going to acquire its rival, or they are going to merge. Weibo is exactly like Twitter, 140 characters and all, the only difference is that Sina is headquartered in China and is made for the Chinese speaker. From a business standpoint it would make sense as it would create a massive social media audience to whom you could advertise to. However, pause for a moment and just think of all the implications such a merger would have. A large portion of Chinese citizens already know how to speak English. This platform would allow, for the first time ever, Chinese citizens to talk directly with random or specific US citizens, at virtually no cost, and would allow for finding and meeting new people (networking). Imagine half of your followers being from China. If such a union ever took place, it would not be that hard to see out 75 years into the future a World in which the dominant global language is some mixture of English and Chinese as a direct result of Tweibo.
Disclosure: I currently do not own SINA but I will soon.
You can follow me on Twitter at @elwalvador
Sunday, March 27, 2011
Medical Marijuana another reason to be bullish on NetFlix
I was watching the History Channel last night and I found yet another reason to be bullish on NetFlix. The show was on the Booming medical marijuana industry in California. To make a long story short, marijuana is now on par with alcohol in the West Coast. All you need is a doctor's recommendation that you need cannabis to treat a medical condition and just like that you can now buy weed in clean, brightly lit, safe, slick, modern stores. Stores whose appearance rivals the aesthetic designs of Lululemon or Apple.
You can also get it delivered to your house if it's too embarrassing to be seen at such a place. While watching the show my brain was churning trying to figure out: how could I directly play this ragging bull market in weed in the West Coast? And a few ideas came up: Invest in who ever owns the Munchies brand? Maybe.
Or perhaps invest in whoever sells Visine? Yes, but what else?
But then it hit me. What do people do most often when they get stoned? They sit on the couch and watch movies! Duh! Naturally, NetFlix came to mind. NetFlix is a pure play on the growing cannabis market.
Disclosure: I currently do not own any NFLX but I may in the near future.
Follow me on Twitter at @elwalvador
You can also get it delivered to your house if it's too embarrassing to be seen at such a place. While watching the show my brain was churning trying to figure out: how could I directly play this ragging bull market in weed in the West Coast? And a few ideas came up: Invest in who ever owns the Munchies brand? Maybe.
Or perhaps invest in whoever sells Visine? Yes, but what else?
But then it hit me. What do people do most often when they get stoned? They sit on the couch and watch movies! Duh! Naturally, NetFlix came to mind. NetFlix is a pure play on the growing cannabis market.
Disclosure: I currently do not own any NFLX but I may in the near future.
Follow me on Twitter at @elwalvador
Friday, March 25, 2011
Long, impressive sounding names: Lululemon Starbucks.
When you order a Mocha Latte Double Frappuccino Espresso at StarBucks, what the hell does that even mean? It doesn't matter. It is sooo much fun ordering a simple cup of coffee using a complicated mess of words, one of which makes you sound Italian, that it hardly even matters what the coffee tastes like. You could almost make the case that SBUX is charging you for the right to use the words Venti and Frappuccino inside their stores. Additionally, a long, magnificent name like that does more than just make you feel good about being able to remember the whole thing, let alone say it. It literally imbues the coffee with magical god like powers. Because suddenly, you are not just buying "an ordinary" cup of coffee, no, no, no! You are buying a Venti Mocha Latté Double Frappuccino Espresso and you know that the coffee has to be made out of the finest ingredients on earth because you just spent enough money on it to send 10 African Children to school for 5 years.
And this is the very same demand creation strategy that is being employed by the lovely ladies over at Lululemon. As any Lulu “educator” will tell you, you are not just buying ordinary yoga pants, far from it. You are buying Anti-Camel Toe, Tata-Taming, Wunder Under Crops made out of Luon, with the Multi-color Unicorn Tears print on it, embedded with SilverScent anti-stink technology! The name makes it very, very, crystal clear: These are the most amazing, extraordinary, spectacular yoga pants that woman has ever created. In fact, these are the best damn freaking yoga pants in the entire Universe! And obviously they are made out of the highest-tech, most cutting edge fabrics, as evidenced by the equally magnificent price tag.
I think the success of Starbucks is largely, if not entirely, attributable to its ability to make their customers believe that they are buying so much more than just coffee. And I also believe that Lululemon is doing the exact same thing and will have the same level of success that Starbucks had (has). In fact, I know they are doing the same thing. Lululemon's CEO, Christine Day, was an executive at Starbucks for 20 years before coming to Lululemon. This among other things is why I believe so strongly in owning Lulu.
Disclosure: I am massively, ragingly, long Lululemon stock.
And this is the very same demand creation strategy that is being employed by the lovely ladies over at Lululemon. As any Lulu “educator” will tell you, you are not just buying ordinary yoga pants, far from it. You are buying Anti-Camel Toe, Tata-Taming, Wunder Under Crops made out of Luon, with the Multi-color Unicorn Tears print on it, embedded with SilverScent anti-stink technology! The name makes it very, very, crystal clear: These are the most amazing, extraordinary, spectacular yoga pants that woman has ever created. In fact, these are the best damn freaking yoga pants in the entire Universe! And obviously they are made out of the highest-tech, most cutting edge fabrics, as evidenced by the equally magnificent price tag.
I think the success of Starbucks is largely, if not entirely, attributable to its ability to make their customers believe that they are buying so much more than just coffee. And I also believe that Lululemon is doing the exact same thing and will have the same level of success that Starbucks had (has). In fact, I know they are doing the same thing. Lululemon's CEO, Christine Day, was an executive at Starbucks for 20 years before coming to Lululemon. This among other things is why I believe so strongly in owning Lulu.
Disclosure: I am massively, ragingly, long Lululemon stock.
Friday, March 4, 2011
Webvan, ahead of its time.
The idea of having your customers order their groceries online, buying their food for them, and delivering it to their homes was a horrible business model back in 1999 when Webvan tried it and failed miserably in 2001 going bankrupt.
However, with the advent of mobile-web and smartphones, that can do virtually anything, Webvan's idea could very well be a profitable business model in the post iPhone world.
In 2001 I had never traded a single stock in my life so I don't know much about how Webvan operated but I do know that back then the idea of carrying around a pocket-sized phone that had a blazingly fast wireless internet connection (relative to 56k dial-ups) and had a big enough screen where you could actually see full-color high res pictures (and you could magnify them) was an idea that nobody except, maybe, Steve Jobs had in his head (but probably not since the iPhone debut in 2007).
Back in those early days the internet was very immature and not fully developed. So if you wanted to order your groceries online you basically just typed-up your grocery list in a Webvan text-box and then prayed that he would get you the right brand or flavor that you wanted. For example if you just wrote down that you wanted Total WholeGrain cereal the Webvan employee would shit his pants when he got to the cereal isle when seeing that there are fully 5 different versions of that cereal (Honey Almond Flax, Blueberry Pomegranate, Cinnamon Crunch, Raisin Brand, & Cranberry Crunch). He would have no F-ing clue which one you wanted and would either get you the wrong kind or not buy anything at all. Either of which would piss you off and rightfully so.
With today's internet though, the cloud, and smartphones instead of just writing down a vague, ambiguous grocery list of the foods you want, you could browse through pictures and select the specific brand you want. With pictures there is no ambiguity of what you want and the Webvan employee would be equipped with an iPad or iPhone and have a picture of the exact item you want. If it's not there he could even Tweet you to find out if you would like him to get you another similar brand or not get anything at all. You could even personalize the experience by taking the customer with you on a shopping trip and take pictures of them holding the brands they like. Then the next time they are putting together their grocery list, they could click on a picture of themselves holding the brand!
This simply wasn't doable back in 1999 but I think it is doable now. Maybe that's why Jeff Bezos bought Webvan in 2009 (for probably nothing) and now Amazon owns them (Check Wikipedia).
However, with the advent of mobile-web and smartphones, that can do virtually anything, Webvan's idea could very well be a profitable business model in the post iPhone world.
In 2001 I had never traded a single stock in my life so I don't know much about how Webvan operated but I do know that back then the idea of carrying around a pocket-sized phone that had a blazingly fast wireless internet connection (relative to 56k dial-ups) and had a big enough screen where you could actually see full-color high res pictures (and you could magnify them) was an idea that nobody except, maybe, Steve Jobs had in his head (but probably not since the iPhone debut in 2007).
Back in those early days the internet was very immature and not fully developed. So if you wanted to order your groceries online you basically just typed-up your grocery list in a Webvan text-box and then prayed that he would get you the right brand or flavor that you wanted. For example if you just wrote down that you wanted Total WholeGrain cereal the Webvan employee would shit his pants when he got to the cereal isle when seeing that there are fully 5 different versions of that cereal (Honey Almond Flax, Blueberry Pomegranate, Cinnamon Crunch, Raisin Brand, & Cranberry Crunch). He would have no F-ing clue which one you wanted and would either get you the wrong kind or not buy anything at all. Either of which would piss you off and rightfully so.
With today's internet though, the cloud, and smartphones instead of just writing down a vague, ambiguous grocery list of the foods you want, you could browse through pictures and select the specific brand you want. With pictures there is no ambiguity of what you want and the Webvan employee would be equipped with an iPad or iPhone and have a picture of the exact item you want. If it's not there he could even Tweet you to find out if you would like him to get you another similar brand or not get anything at all. You could even personalize the experience by taking the customer with you on a shopping trip and take pictures of them holding the brands they like. Then the next time they are putting together their grocery list, they could click on a picture of themselves holding the brand!
This simply wasn't doable back in 1999 but I think it is doable now. Maybe that's why Jeff Bezos bought Webvan in 2009 (for probably nothing) and now Amazon owns them (Check Wikipedia).
Sunday, February 20, 2011
CROI 2011 schedule of when $SGMO presents.
Many of us Sangamo bulls have been looking for the schedule of the 2011 CROI conference presentations to find out when Sangamo is going to speak and give their 4 different presentations, well here it is! PDF CROI schedule
Here is the breakdown:
Monday @ 10:00am: Successful and Persistent Engraftment of ZFN-M-R5-D Autologous CD4 T Cells (SB-728-T) in Aviremic HIV-infected Subjects on HAART.
Monday @ 10:15am: Creating an HIV-resistant Immune System: Using CXCR4 ZFN to edit the Human Genome.
Wednesday between 4pm-6pm: CCR5 Knock-out in Hematopoietic Stem Cells
and
Wednesday between 4pm-6pm: Disruption of CCR5 in Zinc Finger Nuclease-treated CD4 T Cells: Phase I Trials
Thanks to David Sobek (@dsobek) for finding this and posting it on twitter and Mel Vogel (@MelVogelWP for retweeting it and breaking it on the StockTwits.com stream where it was brought to my attention.
Follow me on Twitter @Elwalvador
Disclaimer: In no way should anything that I say or type be taken as a recommendation to buy or sell any security. I am merely stating what I am doing with my money. What you do with your money is your responsibility. Trading stocks and options is extremely risky and you could lose all of your money.
Here is the breakdown:
Monday @ 10:00am: Successful and Persistent Engraftment of ZFN-M-R5-D Autologous CD4 T Cells (SB-728-T) in Aviremic HIV-infected Subjects on HAART.
Monday @ 10:15am: Creating an HIV-resistant Immune System: Using CXCR4 ZFN to edit the Human Genome.
Wednesday between 4pm-6pm: CCR5 Knock-out in Hematopoietic Stem Cells
and
Wednesday between 4pm-6pm: Disruption of CCR5 in Zinc Finger Nuclease-treated CD4 T Cells: Phase I Trials
Thanks to David Sobek (@dsobek) for finding this and posting it on twitter and Mel Vogel (@MelVogelWP for retweeting it and breaking it on the StockTwits.com stream where it was brought to my attention.
Follow me on Twitter @Elwalvador
Disclaimer: In no way should anything that I say or type be taken as a recommendation to buy or sell any security. I am merely stating what I am doing with my money. What you do with your money is your responsibility. Trading stocks and options is extremely risky and you could lose all of your money.
Monday, February 14, 2011
Why I am long Sangamo Biosciences (SGMO) before Feb 27
Synopsis:
* May have a "functional cure" for HIV, meaning that, the person will still be infected with the virus but will no longer have to take daily "AIDS cocktail" medication to stay healthy and prevent the progression to AIDS. Possibly rendering some of $GILD's and $BMY's products obsolete.
* A short-term catalyst is coming up at CROI (Conference on Retroviruses and Opportunistic Infections), where sometime between Feb 27 - Mar 2, 2011, Sangamo will present the results from two (2) Phase 1 clinical trials on their HIV therapeutic. CROI Dates. And look for the words "March" and "CROI" on the transcript of their latest conference call.
Here is a Bloomberg TV video clip from Friday Feb 11th by the lovely Shannon Pettypiece .
This article may get a little bit technical but please bare with me as this technology is so profoundly different from what any other Biotech out there has that I implore you to take the time to understand it.
Sangamo Biosciences has a technology, called zinc finger DNA-binding proteins (ZFPs), for modifying DNA in living human cells. You'll remember that, DNA is just a very long string of As, Ts, Gs, & Cs that code for the proteins that make up our bodies.
For example: “AAAA TTT GGG CCCC TTTTTTTT GG CCC A GGGGG”.
Might tell a cell to: "Code for the CCR5 receptor in CD4 T-cells".
To help you better understand what the zinc fingers are doing, indulge with me on this metaphor. Just as you can highlight a string of letters on your laptop, when you are typing, and can then press the delete button to erase what was highlighted, Sangamo can do the same thing to DNA. Imagine for a second that the genetic code is one huge string of letters on a Microsoft word document. Essentially what the ZFPs are doing is finding the exact "word" (read: DNA sequence), "with singular specificity", and then pressing the delete button. The ZFPs of course are doing this to the actual DNA of real, living, breathing human cells. To really help you understand how the ZFPs work watch this video produced by Sigma Aldrich which licenses the ZFP technology from Sangamo for their CompoZr genome editing.
The CCR5 receptor in T-cells, the white blood cells that are an integral part of the immune system & the ones that get destroyed by HIV, is what allows the HIV virus to enter the cell. Without the CCR5 receptor, on the T-cell, HIV cannot infect the T-cells.
Let us continue with our typing metaphor. If you were to highlight the words "Code for the CCR5 receptor in CD4 T-cells" in the DNA and press the delete button, you would remove the instructions that tell the cell to produce the CCR5 receptor making it immune to HIV and this is exactly what Sangamo has done to the T-cells of the HIV patients in their SB-728-T trials.
Anecdotally, we already know that it works (at least in 1 person), as quoted from a BusinessWeek article written by Rob Waters :
"One person who hopes it will prove effective is Matt Sharp, 54, an AIDS educator who was diagnosed in 1988 and today takes a daily regimen of three antivirals. He learned about the Sangamo trial a year ago and enrolled. Since last summer, when Sharp received an infusion of his own gene-modified T-cells, blood cells that help the immune system fight infection, the number of those cells has doubled, he says. "I'm just hoping I could get an infusion once a year that would keep HIV under control and I won't have to deal with the effects of taking medication.""
Additionally, SGMO issued a press statement of some preliminary Data on Jan 19, 2010 which substantiates the claims made by Mr. Sharp. From the SGMO press release: "In fact, we calculate that more ZFN-modified cells were present at 20 weeks than were initially infused... Importantly, ZFN-modified cells expanded over the period that we monitored the subject and were well tolerated." http://investor.sangamo.com/releasedetail.cfm?ReleaseID=438350
The bottom line is: I am long SGMO stock betting that they will present positive data at CROI but we must remain fully-aware that if the data is not positive the stock could absolutely get destroyed. Remember this is still Phase 1 data. You need to have a strong stomach to play around in and handle the volatility that the call options known as "biotech stocks" can dish out. Be careful out there.
Follow me on Twitter @Elwalvador
Disclaimer: In no way should anything that I say or type be taken as a recommendation to buy or sell any security. I am merely stating what I am doing with my money. What you do with your money is your responsibility. Trading stocks and options is extremely risky and you could lose all of your money.
* May have a "functional cure" for HIV, meaning that, the person will still be infected with the virus but will no longer have to take daily "AIDS cocktail" medication to stay healthy and prevent the progression to AIDS. Possibly rendering some of $GILD's and $BMY's products obsolete.
* A short-term catalyst is coming up at CROI (Conference on Retroviruses and Opportunistic Infections), where sometime between Feb 27 - Mar 2, 2011, Sangamo will present the results from two (2) Phase 1 clinical trials on their HIV therapeutic. CROI Dates. And look for the words "March" and "CROI" on the transcript of their latest conference call.
Here is a Bloomberg TV video clip from Friday Feb 11th by the lovely Shannon Pettypiece .
This article may get a little bit technical but please bare with me as this technology is so profoundly different from what any other Biotech out there has that I implore you to take the time to understand it.
Sangamo Biosciences has a technology, called zinc finger DNA-binding proteins (ZFPs), for modifying DNA in living human cells. You'll remember that, DNA is just a very long string of As, Ts, Gs, & Cs that code for the proteins that make up our bodies.
For example: “AAAA TTT GGG CCCC TTTTTTTT GG CCC A GGGGG”.
Might tell a cell to: "Code for the CCR5 receptor in CD4 T-cells".
To help you better understand what the zinc fingers are doing, indulge with me on this metaphor. Just as you can highlight a string of letters on your laptop, when you are typing, and can then press the delete button to erase what was highlighted, Sangamo can do the same thing to DNA. Imagine for a second that the genetic code is one huge string of letters on a Microsoft word document. Essentially what the ZFPs are doing is finding the exact "word" (read: DNA sequence), "with singular specificity", and then pressing the delete button. The ZFPs of course are doing this to the actual DNA of real, living, breathing human cells. To really help you understand how the ZFPs work watch this video produced by Sigma Aldrich which licenses the ZFP technology from Sangamo for their CompoZr genome editing.
The CCR5 receptor in T-cells, the white blood cells that are an integral part of the immune system & the ones that get destroyed by HIV, is what allows the HIV virus to enter the cell. Without the CCR5 receptor, on the T-cell, HIV cannot infect the T-cells.
Let us continue with our typing metaphor. If you were to highlight the words "Code for the CCR5 receptor in CD4 T-cells" in the DNA and press the delete button, you would remove the instructions that tell the cell to produce the CCR5 receptor making it immune to HIV and this is exactly what Sangamo has done to the T-cells of the HIV patients in their SB-728-T trials.
Anecdotally, we already know that it works (at least in 1 person), as quoted from a BusinessWeek article written by Rob Waters :
"One person who hopes it will prove effective is Matt Sharp, 54, an AIDS educator who was diagnosed in 1988 and today takes a daily regimen of three antivirals. He learned about the Sangamo trial a year ago and enrolled. Since last summer, when Sharp received an infusion of his own gene-modified T-cells, blood cells that help the immune system fight infection, the number of those cells has doubled, he says. "I'm just hoping I could get an infusion once a year that would keep HIV under control and I won't have to deal with the effects of taking medication.""
Additionally, SGMO issued a press statement of some preliminary Data on Jan 19, 2010 which substantiates the claims made by Mr. Sharp. From the SGMO press release: "In fact, we calculate that more ZFN-modified cells were present at 20 weeks than were initially infused... Importantly, ZFN-modified cells expanded over the period that we monitored the subject and were well tolerated." http://investor.sangamo.com/releasedetail.cfm?ReleaseID=438350
The bottom line is: I am long SGMO stock betting that they will present positive data at CROI but we must remain fully-aware that if the data is not positive the stock could absolutely get destroyed. Remember this is still Phase 1 data. You need to have a strong stomach to play around in and handle the volatility that the call options known as "biotech stocks" can dish out. Be careful out there.
Follow me on Twitter @Elwalvador
Disclaimer: In no way should anything that I say or type be taken as a recommendation to buy or sell any security. I am merely stating what I am doing with my money. What you do with your money is your responsibility. Trading stocks and options is extremely risky and you could lose all of your money.
Subscribe to:
Comments (Atom)