Vox Rationalis

Sanofi-Aventis: Play This Low-Risk Combo Along with Buffett

I clearly gave the six months ago price of $46, and offered a six month scenario of it returning to the same level wherein you would miss out on 21% of additional gain. So I was comparing the same timeframe and not, as you would like, comparing a 20% half-year gain to a 41% full-year gain.

My problem is not with the idea - it's with the partial information you provided. There is SIGNIFICANT risk involved in your play, which you don't even mention. As I stated, the upside risk is much more likely than the downside risk; if the fundamentals are as solid as you say, there's no reason to think that SNY couldn't outperform your play as I suggest.

But that does not mean there is no downside. At this time in 2004, MRK was at around 47, having traded between 40 and 65 for 2.5 years. In November it hit 26 when Vioxx turned south. What happens to SNY if Plavix turns out to be killing people? Imagine the public reaction if strong evidence came about indicating that SNY's vaccines were, in fact, responsible for autism in thousands of children.

Odds of this happening? Remote. Impact if it did? Severe.

Also: you'll need to grow a thicker skin if you want to be a journalist. You would have been better served acknowledging my legitimate criticism and providing more information to allow those reading to decide for themselves, rather than trying to point out holes in my post which weren't there.

This additional information is what was missing in the first place - a meaningful discussion of risk.