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  • Invest In Belviq, Not In ARNA

    This article is about ARNA pharmaceuticals.

    In the final weeks of 2009, I was a college undergraduate, with a unique opportunity to try the new Domino's pizza. The old Domino's pizza was awful, everyone agreed with this finding, and finally someone at Domino's had admitted it. This person had the recipe changed to use some fundamental ingredients that were essentially lacking from the old recipe: cheese, tomatoes, flour, garlic, and butter. Immediately my response was, "how can I invest in this company?", but, being a poor college student, I didn't feel that I had the money to invest, preferring instead to sink all of my... liquidity... on vast amounts of coffee, and more or less completely missed out on the beautiful thing that happened over the next 3 years (a decision I do not regret, as I love coffee irrationally).

    Did I give Domino's a shot as a consumer? Yes I did. Why? Because someone in my dorm told me that they had changed their recipe and that the pizza was good now. I tried it, it was good, I told other people to try it.

    That information, coupled with the analysis that this is the effect domino's meant to have, indicated a clearly successful long term strategy.

    If you were an investor at the time, and you were made aware of Domino's's changing their recipe. I argue that it would have been irresponsible of you not to at least try a slice.

    Over the 3 years after the end of 2009, The price of DPZ is a very straight line on a log scale graph, a straight line which outpaces the sector by a very wide margin, arguably attributable to exactly one fact about the company which was released and heavily publicized at the end of 2009. This is a unicorn, there's no such animal as this, but here it is.

    The identification of the best product in a field of products is not a task that only critics are suited for. In fact, I would argue that critical reviews are universally unsuited for describing how the average person will feel about a thing. If you spend all your time examining movies, you will start to form ideas about what matters in movies and what doesn't, because exposition is expected, rather than the simple metric of "I liked it or I didn't like it", and more importantly, "I would recommend, I would not recommend".

    Earlier I said that this post was about ARNA pharmaceuticals, and it is, but obviously I'm not going to talk at length because that is my entire thesis. So without further ado:

    I take Belviq, and I have taken it for 5 weeks, I have never had a better relationship with food, and I have lost plenty of weight. I like what the drug does, and I have saved more money on food than I have lost on the retail price. I would recommend it, and I have recommended it to friends and family, and you, as an investor, assuming you have an opportunity to actually try Belviq. It would be irresponsible for you not to.

    Disclosure: I am long ARNA.

    Additional disclosure: I am taking Belviq. I have no investment in Vivus.

    Jul 23 1:06 PM | Link | Comment!
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