Amar Narayanan's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/77065/comments http://seekingalpha.com/article/64899-market-bears-take-a-breather?source=feed#comment-116862 116862
Although I am not a big fan of Wall Street myself, it is probably a bit unfair to only blame Wall Street for this mess. The operative word is greed. Greed made Wall Street mavens get into this entire securitization nonsense, just to make a few basis points more. Greed drove home-buyers to continue borrowing against their homes, even as a housing bubble looked ominous. Greed drove investors to push stock prices higher even as the potential headwinds of a sub-prime contagion and credit crisis were obvious.

As Warren Buffett says, only when the tide goes down do we discover who's been swimming naked. Well, the tide's gone now and the sight ain't pretty. :)

Amar Narayanan
Trader Thoughts]]> Mon, 18 Feb 2008 00:27:53 -0500
Although I am not a big fan of Wall Street myself, it is probably a bit unfair to only blame Wall Street for this mess. The operative word is greed. Greed made Wall Street mavens get into this entire securitization nonsense, just to make a few basis points more. Greed drove home-buyers to continue borrowing against their homes, even as a housing bubble looked ominous. Greed drove investors to push stock prices higher even as the potential headwinds of a sub-prime contagion and credit crisis were obvious.

As Warren Buffett says, only when the tide goes down do we discover who's been swimming naked. Well, the tide's gone now and the sight ain't pretty. :)

Amar Narayanan
Trader Thoughts]]> http://seekingalpha.com/article/64899-market-bears-take-a-breather?source=feed#comment-116861 116861
Inflation has remained persistently high because we are in a multi-year commodity boom. Jim Rogers realized it the earliest. After almost two decades of declining real prices of foodstuffs, prices started climbing earlier this decade. Although prices have shot through the roof, only a glance at the long term CRB Grains index is needed to convince that commodities have a lot more upside. Ditto with crude oil... after struggling at the $40 level for 25-30 years, they finally broke out the last few years and the result is there for everyone to see. Having said that, the current situation, although superficially similar to the hyperinflation in the 1970s, has some notable differences.

The economy is now a lot more resilient to an oil shock (at the very least it will take a much higher price of oil to cause a similar dent in the economy). Plus the relatively benign interest rates currently give the Fed a lot more ammunition to fight inflation if push comes to shove.

While inflation certainly reduces the value of whatever we own, it is not my major worry over the long term. The kind of headwinds facing the economy are strong enough to pull down demand drastically, thereby nipping inflation in the bud. The Fed realized it, albeit rather too abruptly (last August, in a week they shifted their focus from fighting inflation to salvaging growth).

My bigger worry - and presumably the Fed's too - is the looming threat of deflation. Or Stag-deflation if you will. A housing bust is not to be taken lightly... we all know what has transpired in Japan since the late 1980s when a housing bubble was propped up by short-sighted policymakers leading to the most prominent deflationary spiral since the Great Depression. Japan is still struggling to get over that crisis despite an almost ZIRP (Zero Interest Rate Policy).

For the Fed, it is essentially choosing between the greater of two evils... they want to prop up growth a bit or at least ensure that a possible recession doesnt snowball into anything bigger. Once this is taken care (and this will in turn take some steam off inflation as well), they will presumably get back to their hawkish inflation-fighting ways.]]> Mon, 18 Feb 2008 00:20:36 -0500
Inflation has remained persistently high because we are in a multi-year commodity boom. Jim Rogers realized it the earliest. After almost two decades of declining real prices of foodstuffs, prices started climbing earlier this decade. Although prices have shot through the roof, only a glance at the long term CRB Grains index is needed to convince that commodities have a lot more upside. Ditto with crude oil... after struggling at the $40 level for 25-30 years, they finally broke out the last few years and the result is there for everyone to see. Having said that, the current situation, although superficially similar to the hyperinflation in the 1970s, has some notable differences.

The economy is now a lot more resilient to an oil shock (at the very least it will take a much higher price of oil to cause a similar dent in the economy). Plus the relatively benign interest rates currently give the Fed a lot more ammunition to fight inflation if push comes to shove.

While inflation certainly reduces the value of whatever we own, it is not my major worry over the long term. The kind of headwinds facing the economy are strong enough to pull down demand drastically, thereby nipping inflation in the bud. The Fed realized it, albeit rather too abruptly (last August, in a week they shifted their focus from fighting inflation to salvaging growth).

My bigger worry - and presumably the Fed's too - is the looming threat of deflation. Or Stag-deflation if you will. A housing bust is not to be taken lightly... we all know what has transpired in Japan since the late 1980s when a housing bubble was propped up by short-sighted policymakers leading to the most prominent deflationary spiral since the Great Depression. Japan is still struggling to get over that crisis despite an almost ZIRP (Zero Interest Rate Policy).

For the Fed, it is essentially choosing between the greater of two evils... they want to prop up growth a bit or at least ensure that a possible recession doesnt snowball into anything bigger. Once this is taken care (and this will in turn take some steam off inflation as well), they will presumably get back to their hawkish inflation-fighting ways.]]> http://seekingalpha.com/article/59121-will-2008-be-the-year-of-the-bear?source=feed#comment-108872 108872 Mon, 07 Jan 2008 23:52:32 -0500 http://seekingalpha.com/article/59121-will-2008-be-the-year-of-the-bear?source=feed#comment-108870 108870
As regards the stock markets, I personally believe some more excesses would have to be unwound before stocks become bargains.]]> Mon, 07 Jan 2008 23:49:45 -0500
As regards the stock markets, I personally believe some more excesses would have to be unwound before stocks become bargains.]]> http://seekingalpha.com/article/50915-gilead-continues-to-shine-but-watch-the-competition?source=feed#comment-101656 101656
1. Atripla is still not approved for use in the EU. The approval you seem to be referring to came from the Committee for Medicinal Products for Human Use of the European Medicines Agency. This is only a preliminary approval. The final approval from the European Commission is yet to be obtained, though it is widely expected to come through by end of the year.

2. There is no real competition for GILD's HIV franchise. The Viread-Truvada-Atripla franchise is best-in-class. There is another ten years for patent expiration on the tenofovir molecule used in these drugs.

This franchise remains the dominant method of therapy in the developed world. 65% of all treated patients in the US are put on either Atripla/Truvada/Viread... 80% of new patients in the US receive Atripla/Truvada. With a 10% annual growth in diagnosis in the US and with many of the 250,000 undiagnosed HIV positive Americans soon to begin treatment (following Center For Disease Control & Prevention's recommendation of mandatory HIV testing for patients in 13-64 age group), this number is only likely to grow.

As regards competition, Merck recently got an approval for an integrase inhibitor, Isentress. Gilead plans to counter this with Phase III trials of its own integrase inhibitor, GS9137 or Elvitagravir, in 2008.



Despite the errors in your analysis, I share your bullish sentiment. The story here is mostly HIV. Other products such as Letairis, Darusentan, Viread for Hep-B and Aztreonam Lysine are only poor cousins of the HIV franchise.

Cheers,
Amar]]> Mon, 12 Nov 2007 06:16:36 -0500
1. Atripla is still not approved for use in the EU. The approval you seem to be referring to came from the Committee for Medicinal Products for Human Use of the European Medicines Agency. This is only a preliminary approval. The final approval from the European Commission is yet to be obtained, though it is widely expected to come through by end of the year.

2. There is no real competition for GILD's HIV franchise. The Viread-Truvada-Atripla franchise is best-in-class. There is another ten years for patent expiration on the tenofovir molecule used in these drugs.

This franchise remains the dominant method of therapy in the developed world. 65% of all treated patients in the US are put on either Atripla/Truvada/Viread... 80% of new patients in the US receive Atripla/Truvada. With a 10% annual growth in diagnosis in the US and with many of the 250,000 undiagnosed HIV positive Americans soon to begin treatment (following Center For Disease Control & Prevention's recommendation of mandatory HIV testing for patients in 13-64 age group), this number is only likely to grow.

As regards competition, Merck recently got an approval for an integrase inhibitor, Isentress. Gilead plans to counter this with Phase III trials of its own integrase inhibitor, GS9137 or Elvitagravir, in 2008.



Despite the errors in your analysis, I share your bullish sentiment. The story here is mostly HIV. Other products such as Letairis, Darusentan, Viread for Hep-B and Aztreonam Lysine are only poor cousins of the HIV franchise.

Cheers,
Amar]]>