Why We’re Not Convinced By JPMorgan’s Kolanovic’s Buy The Dip Argument

  • Famed JPMorgan stock guru Kolanovic argues that we should buy the dip because the new Omicron variant is likely to accelerate the end of the pandemic.
  • This hinges on some indications that Omicron is less virulent (deadly) but more contagious than Delta and therefore the ability of the ‘good’ virus to crowd out bad virus.
  • This seems unlikely to us as contagions grow exponentially and therefore it is a much more important variable compared to virulency.
  • Things will be even worse if, as seems probable, Omicron also compromises vaccines.
  • For Omicron to produce a benign outcome, it really needs to be MUCH less deadly than Delta. Rapidly rising hospitalizations in Gauteng province don’t instill confidence in that.
  • This idea was discussed in more depth with members of my private investing community, SHU Growth Portfolio. Learn More »