Anavex Life Sciences Corp (AVXL)

[Gator328]

I don't think you were wrong about the larger environment. You just had too short of a timeline for when the adverse impact would be felt.

The economy is a lagging indicator to events that occur months or years prior. I don't think we will feel the full effects of this pandemic for at least another year, maybe longer -- but at some point the debts will have to be paid and while qualitative easing may be a short-term necessity, it's impossible to spend your way out of debt in the long-term.

With a company like Anavex, however, externalities aren't quite as important a factor. A drug of this magnitude that may have the ability to prevent Alzheimer's will experience inelastic market demand. Similarly, if the drug trials fail the stock will crash to the value of its cash holdings / number of shares outstanding. This will happen in a good or bad economy.

If the drug works, the stock hits $100. If doesn't get approved, the stock goes to maybe $3.

Your prediction for the economy will be proven correct in time. I just don't know that it matters much for Anavex.