Anavex Life Sciences Corp (AVXL)

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Short-term trading, or long-term investment?

There are a lot of AVXL investors who are married to this stock. I am curious about what price it takes to get them to file for divorce.

Well, I’ll speak for myself, representing I’m sure a good percentage of long-term holders of AVXL positions.

“Married” to the stock? Nope. For me owning a stock like Anavex is a long-term investment decision, where I know that the company is a biotech startup, without any revenues until it is able to sell its new drug. And that can’t happen until the FDA gets positive clinical outcomes validating the drug’s efficacy and safety. By definition, long-term stock investments can take a long time to pay off.

I’m not married to Anavex, but I’ll continue to hold my AVXL position on out. If all three of the big clinical trials fail (Rett syndrome, Parkinson’s disease dementia, and Alzheimer’s disease), my entire investment will be lost. But, if even just one yields positive safety and efficacy results, Anavex Life Sciences Corp will be, soon enough, a very profitable, revenue-generating corp. At this very moment, shares of AVXL have traded at $10.70. The cost basis for my several thousand AVXLs is $2.91, the value of my holding has increased 3.6x. With FDA approval for any one of the three diseases, the share price will quickly go to $30, then continue to ascend for the foreseeable future. To $1248 or something? Who knows? I’m not concerned. It may level out in three or four years at $500. Or, $2000. Either way, I’ll be way ahead (well, my estate will be).

If holding, taking, and selling AVXL positions are elements of a stock-trading scenario, then the question of when would a position be sold out is useful and legitimate. But, for me, not at all. Actually, if some Big Pharma tried right now for an Anavex buyout at, say, $2000 per share, I’d vote against it (giving up several million immediate dollars). I’m looking out at least five years, then ten; when Anavex Life Sciences Corp will be a major global pharmaceutical, selling a pharmacy-shelf full of new drugs, yielding for me and my estate beneficiaries very significant annual dividends. That’s “long-term investment,” not short-term day-trading. Two different, contrasting stock investment approaches. Both are valid. For those day-trading AVXLs, my best wishes. But, if I have Anavex science right, I’ll be glad in 2032 to compare any Anavex day-trading revenues with what my position will be both worth and what it will be yielding in dividends.

I’m not “married” to Anavex. Nor have I jeopardized any of my family budget in acquiring my AVXL position. Over the years it’s been purchased solely with discretionary funds in my budget; dollars left over after all financial obligations have been met. Either way, with an Anavex bust (totally bad clinical results), or with phenomenal results (with massive share price ascents), my life will go on. I come out either even (no gains), or with gigantic value increases. The use of the few thousands of dollars I used to take my AVXL position has already past. Right now, functionally I’m “even.” In a few years? Check back. Not a shred of clinical evidence, whether murine or human, indicates Anavex will fail in any of the three clinical trials. I don’t anticipate that I’ll ever sell any of AVXLs. At my death (perhaps delayed because of blarcamesine prophylaxis) they will pass on to my estate beneficiaries. My wife and I will have to live ever so meagerly off Anavex dividends. If Anavex goes bust, my teacher retirement payments will have to suffice.