Perpetual Delta Variant?

Matein Khalid 'Mateinomics'


It is time that the government and WHO tell the world that the mutations of the COVID virus will ensure that seven billion human immune systems are vulnerable to the molecular vagaries of its genetic code. In essence, there is no such thing as the end of COVID as we have all assumed after vaccines last November. True, my knowledge of human biology is self taught trading biotech/Big Pharma stocks.

India, South Africa and Brazil prove that the delta variant virus can wreak havoc in untold millions of human immune systems. While I understood that the teenage mutant ninja turtles in the 1990's, I cannot fathom the Geriatric Mutant Virus cells in the 2020's.

I can envision a world where offices/hotels remain half empty forever and millions of retail businesses go belly up as lethal variants of the virus bring another Black Death to this world. This scenario could mean that a catastrophic fall in global property prices cannot be ruled out, if a new virus mutation triggers lockdowns in economies whose survival depends on the free flow of people. No footfall, no football; no faloos, no hummous!

Why has crude oil gone down by 17% in the past six weeks? Why have airline, casino and cruise ship stocks crashed with a vengeance? Does Mr. Market know something the world's public health bureaucrats do not? I concede I am hardly the fountainhead of wisdom yet I get terrified when I don't even know what I don't know and the future of the pandemic becomes unknowable.

I always loved financial markets because Wall Street combined the precision of mathematics with the poetry of human psychology, yet how can any sane valuation model track the exponential mass death curve of a mutant virus gone rogue?

Even though the Delta cases spiked worldwide but markets hit new highs as the US mortality rate is only 1.70%. Yet the mortality rates for MERS was 35% and SARS 10%, what if Lambda virus rate is anything near these metrics. Will that make the black death or the Spanish flu seem like a Sunday school picnic for the human race? I do not know the unknowable. What is the rational strategy to make money in this surreal scenario?

One thing is for sure, the Covid virus, like the flu, will be with us forever. I doubt if astrology can help me to hedge my assets against the infinite mutations of Covid. If humanity faces psychokiller qu'est-ce que c'est, all bets are off as the Talking Heads song I so loved at Penn advised run run, run run away. Yet, how do we outrun a killer virus, how do we out run history?

While Wall Street shares my conviction that vaccines are a secular growth theme, the reason why Moderna could double even though it is up 5X and Pfizer, dead money for so long, has begun to boogie-woogie since 33 when I last waxed rhapsodic about it.

Right o, Jim. Nobody gets out of here alive and may I be reincarnated as Kim Kardashian!


Matein Khalid is the Chief Investment Officer of Asas Capital Management. He has 25 years of experience in international capital markets as an advisor to family offices and fund managers. He has worked for investment banks/hedge funds in New York, Chicago, London, and Geneva. In addition, he has been the CIO of a technology fund in San Francisco, a royal investment office in Dubai and a public insurance company listed on the DFM.

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