Big KNY3 BARRONS EDITORIAL INVESTMENT PFE ADVICE TO THE RESCUE!!!!
Hear hear, unadulterated by any personal interest,gg, ( I will assume that Alan owns no PFE stock ):
June 1st, 1998, Barrons Editorial
Boom and Bust
By Alan Abelson
What explosive times we live in!
The fallout from those nuclear tests by both India and Pakistan is apt to prove extraordinary. Not the least of the consequences of those countries' demonstrated capability of blowing up each other -- and, in passing, a few billion other folks -- is certain to be an exponential rise in the number of people thronging the sidewalks with sandwich boards exhorting us to "Repent -- The End is Near."
And we find that a truly annoying prospect. For one thing, the streets are crowded enough without an onslaught of wandering billboards. For another, if the end is near, we don't want to hear about it. Besides, instead of bugging us, why aren't they doing their shtick in New Delhi and Islamabad?
This rather alarming view of what nukes in the hands of the Indians and Pakistanis portends has been very much encouraged by the profusion of dire prophecy leveled at us in the media. It was just about impossible last week to press the remote without a talking head filling the screen, enthusiastically expounding on the brilliant promise of planetary mayhem.
Stay tuned.
Speaking of Viagra, as we were tangentially a few paragraphs ago, on April 27, when the frenzy over Pfizer's impotence drug was at fever pitch and Pfizer shares were changing hands north of 118, we sounded a skeptical note, courtesy of a hedge-fund operator who loved the company and vouched for the product but thought the price of the stock was gaga. Since then, the shares have worked their way lower and closed Friday at 105.
An inevitable exhaustion of speculative passion and disclosure of the death of six users of the pill (all of whom, let it be noted, were borne into the void wearing expressions of profound contentment) were among the chief depressants.
A less frequently cited but nonetheless potent negative was the banning of the drug by Ho Chi Minh City in Vietnam. The city fathers alluded to public-health concerns in explaining their action, but the truth is, they're inveterately anti-fun (the last time they were seen smiling in public was when Saigon fell), and they may also have been slightly influenced by their reputed control of the local black market, on which Viagra fetches a 50% premium.
Although down from their euphoric high of 121 3/4 , Pfizer's shares may still have a way to travel on the downside. That at least is the view of another savvy portfolio type we know who specializes in that amorphous area known as health care. We should say he also is a fan of the company and Viagra and bought long-time calls on the stock before it went ballistic (in July '97, to be precise). He hasn't sold, but he has thoroughly hedged his position.
Our friend's caution is conditioned by nothing more complicated than a slowing in the impossibly torrid rate at which prescriptions were written for Viagra when it first hit the market. The total has declined from an astonishing 300,000 a week to 200,000, and the next set of figures revealing new prescriptions for the drug, he predicts, will evince a further drop of around 15%. His take on the trend is a decrease in "recreational" use (possibly reflecting a reconciliation of appetites with abilities).
The decline, in any case, has left analysts confused (so, what's new?) and until they emerge into some more coherent state, he's convinced, the stock will remain under pressure. More specifically, he's looking for it to bottom out in the low 90s -- at which point he plans to unwind his hedge.
With the market acting a little ragged, we decided it might be a propitious time to check in with David Tice, one of our favorite bears (and one of the few still standing). David puts out a service for professional portfolio managers dubbed Behind the Numbers, which accentuates the negative. Our timing turned out to be not as propitious as we thought -- we buzzed him on Thursday when the market was rallying -- and to our question as to how he was doing, he answered wryly that he would have been happier had we asked him a day or two earlier.
The last time we quoted David in these columns was February 16, and the stock he panned was Micron Technology. It was 35 then and closed under 24 on Friday. So we decided, what the hey, let's try for another. Obliging as ever, David offered up as a short sale a Big Board company named Guidant Corp.
( for more details , please buy the paper, gg ).
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