CTHGPRO Portfolio 2021 August Update
Welcome to the all-new CTHGPRO Portfolio.
Let me start off by thanking my investor (me) for entrusting “us” with my money.
Why us? Because I would like to welcome onboard the first ever CTHGPRO analyst who will help with every aspect of the portfolio, so I can sit back and enjoy the applause or someone I can blame if it all goes horribly wrong.
Firstly, I am sure many are asking why restart the CTHGPRO Portfolio now? and will it be the same as the last one? Let me answer the second part of the question first, yes. It will pretty much be the same as the last one. Once again, my aim will be to turn every dollar invested int0 $5 within 3 years. The reason I am starting now is I have plenty of time on my hands with lockdown and secondly, I hope it brings some entertainment to those who are stuck at home. Those hoping me to succeed can cheer on my wins, while those hoping I crash, and burn can enjoy a good laugh at the weird and wonderful companies the portfolio will invest in.
For those that don’t know, the only real mandate for the fund is to make money. I can invest the lot in one company (I won’t) or to a maximum of 10 positions. So, it’s a high conviction play. Most of selections of the portfolio will be on the ASX but the portfolios current largest position is situated in Europe.
The next question I get asked a lot, is should you try and copy my selections? the answer is definitely NO. The reason you shouldn’t is firstly because I have no idea what I am doing and the CTHGPRO Portfolio newsletter is not financial advice. Secondly you will never know when I sell. A great example of this occurred with the first position I started for the portfolio on the 1st of August which I have already exited as new information came to hand. So please don’t try to copy, just have a good laugh with me along the way. What I will try to do is explain a little more on why I bought a company and hopefully that will aid you to perhaps think a little differently for your next investment.
World Outlook
I written numerous times on how I rarely consider the macro environment when investing. This year we have heard how inflation was set to raise its ugly head, gold would go through the roof and basically world markets were going to implode. I will be honest and say I have no idea what is going to happen in the future so I will just stick to what I know and find companies that I believe are and will continue to grow strongly. The sooner I can find them in their life cycle the bigger profits I can make. Now its not that I don’t have opinions on what the Macro will or wont do, I love thinking about it but that’s not what I am good at so I desperately try to stick within my circle of competence.
Covid19
You will be pleased to know unlike many fund managers I am not an expert on viruses, so I won’t bore you endlessly with my opinion on the subject. Having said that if an investing opportunity is presented by the virus like it recently did I will take that opportunity to hopefully make money.
Portfolio News
If you followed the original CTHGPRO Portfolio you will be aware the original version had 14 months of positive returns. While I can’t guarantee that will continue, I will be aiming to keep drawdowns to a minimum. This will not be a buy and hold portfolio.
So let’s get to the part you’re actually interested in, what is the portfolio buying ? Currently the portfolio is holding 5 positions two of which are in the building stage. By building stage, I mean I haven’t allocated the full amount to the position I am hoping to. I am either waiting for additional information to confirm my thesis or I am waiting for the chart to confirm an upwards direction. Once I complete the full allocation of a position, I will then mention the company in the newsletter.
Valneva SE
Anyone who knows me or has followed my twitter account knows that biotech is not my preferred investments. Of course, rules are meant to be broken and sometimes and opportunity comes along that is so good, you just need to be exposed to wherever the ride may take you
Valneva is an emerging French Biotech company, Valneva, is currently in Stage 3 clinical trials for its COVID-19 vaccine, VLA2001. Despite not yet completing trials, Valneva is already of great interest to governments around the world, particularly the UK, which has preordered more than 100 million shots.
The UK has further options to order more, pending approval, the supply agreement with the U.K. is said to be worth €1.4 billion for five-year’s supply. The deal could eventually bring in 190 million doses by 2025. The company is currently preparing to deliver 60 million of those shots (pending successful trials) in the second half of 21.
Interestingly Australia is also amongst those who have expressed heavy interest in VLA2001.Whilst vaccines are nothing new to biotech, what makes VLA2001 unique from other COVID-19 vaccines is that it uses inactivated, whole particles of SARS-CoV-2 to trigger an immune response from the body. Current vaccines such as Moderna and Pfizer instead use mRNA. mRNA vaccines do not contain any part of the virus, instead use synthetic mRNA strands which enter cells and instructs them to make antigens which helps the body’s immune response in future encounters.
On top of that, Valneva’s jab doesn’t come with stringent cold-chain requirements and has a longer shelf life than current mRNA options. The thinking is that governments may choose to stockpile VLA2001 for if and when the need arises
Whilst Valneva is not the first to use inactivated virus particles, they are currently the only producers of its kind being produced in Europe. By using the whole virus the vaccine may even be effective against future variants.
A bonus is that the vaccine, which incorporates a CpG 1018 adjuvant from Dynavax, could have a safety edge since mRNA shots are still novel technologies and adenovirus vaccines from Johnson & Johnson and AstraZeneca have been plagued with concerns of rare but serious blood clots.
While all these possibilities sound great, it is important to keep in mind that its still needs great results from his phase 3 clinical trials and anyone who has invested in biotechs before, knows that a positive outcome is anything but certain
Other holdings
In an effort to hit the ground running the CTHGPRO Portfolio has taken up positions in two of my highest conviction and longtime holdings UWL and CTT. We decided to take positions in both during early August prior to their FY21 Financial Reports. Again, most followers will know I believe it’s better to wait until after financial reports to start a new position but as I currently hold and know both companies well, I saw early August prices prices as an opportunity rather than a risk. We have also started 2 positions in new companies which we will discuss in future monthly updates.
August Performance
Pleasingly the portfolio was up 12% in August mostly due to the rise in Valneva’s share price.
Again, I would like to advise all readers that nothing in this update is financial advice. Please do your own research and consult a financial advisor before investing in anything or even when making the decision to cross the road.
As always, the team at CTHGPRO would like to take this opportunity to thank me for trusting us with my money.
Regards
Alonzo and “The Analyst”
CTHGPRO Portfolio Connoisseurs
Update!
13/9/2021
The portfolio has sold its position in Valneva with news that the UK government has pulled out of the supply agreement.
It is interesting that the UK government has done so after preliminary data on the vaccines booster trials was due for announcement. This raises the question on wether Valneva’s results were poor or half dose results from Pfizer or AZ were particularly good. As an example UK has agreements for 60 million Pfizer shots to be used as boosters. If half dose results are good that effectively doubles the UK supply and halves it’s price.
