Commentary for the week of 11/29/2021

Well, another week, another COVID variant.  This one is called “Omicron”.  Biden is banning non-Americans flying in from South African countries starting today.  Americans can enter assuming that they test negative for a COVID test (which is not always accurate and the incubation period is variable).    I guess that the virus must be smarter than we thought.  Apparently it can check a person’s passport and not infect Americans!  Utter nonsense.  The virus is probably already in the US so the ban will probably won’t do anything.  The real answer is to help those countries get vaccinated ASAP – Africa is the least vaccinated in the world.  


On the other political news, the Democrats in the House passed the “soft” infrastructure bill.  As I mentioned before, I think it will be inflationary and counter productive.  It is also hypocritical in that it will raise the SALT deduction to $80,000/year, which will clearly benefit high income tax payers in the blue states.   Even Bernie Sanders doesn’t like it.  I will take the higher deduction as I will be entitled to it but I don’t think it is necessary (perhaps $20,000 or $30,000 would be more reasonable).  Also in the bill is a provision to limit drug prices.  This is one of the most counter productive parts of the bill.  Where do the lawmakers think that Pfizer and Moderna get the funds for R&D to produce miracle drugs and vaccines?  From those so-called high cost drugs.  Did you know that only about 1/12 of experimental drugs (costing millions) ever make it to the market?  The funds from successful drugs fund those efforts!  And as for those who say: “Canada and Europe force drug companies to charge less” – how about negotiating with those countries to pay a bit more so Americans don’t have to subsidize the entire world’s drug industry?!  The final part of the bill I want to mention is the push to electrify the auto industry.  If you buy an electric car from a union shop (i.e. GM, Ford or Chrysler) you can get an additional incentive of up to $4,500 above the $8,000 incentive for all cars.  How is that fair to workers in a BMW plant in South Carolina or Tesla workers in California?   Talk about a blatant “pay off” to unions!  But again, I will happily take my tax credit for my Chevy Bolt that I will be buying next year!  


Now, about back to the funds.   I hope that you didn’t do any trading on Friday when the markets tanked.  If you did anything, I hope you took the opportunity to buy rather than sell.    On the Growth Fund, I am still positive on Paypal, as I think that the sell off is unjustified.  I would add to your positions if you can.  As for the Chinese stocks (Alibaba and VIPS), I cannot recommend them anymore.  I would switch any holdings of them into Amazon (which I recommended several weeks ago).  I think Amazon should be close to $4,000 by year end and at least $5,000 by next year end.  I will be making some changes to the portfolio at the beginning of the year, so standby.


On the income fund, again, don’t worry about Merck.  I know it has taken a beating because its COVID treatment is not as effective as first thought but I still think that the rest of its drug portfolio will generate positive returns as well as dividends.  And stand pat on Pfizer and most of the stocks in the portfolio.  I can no longer recommend Western Union but I think the rest of the stocks will do fine.  As with the growth fund, I will be making some adjustments to this fund as well, but many of current stocks will remain in the portfolio.  So look for updates next month.


Well, folks, that is about all for now.  I hope you all had a happy and safe Thanksgiving.



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