January 5, 2021
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Vaccines, Bitcoin, and a Perfect Catch

As Canadians, we find ourselves now in the eleventh month of either full or partial lockdowns.

There are few who would have expected we would be in this situation, for so long, with such loss of life and livelihood. The complex political and humanitarian aspects of this pandemic have greatly exacerbated swings between fear and hope. However, in times like these, we believe it is still important to have frank discussions with business owners, advisors, and capital investors to ensure we are strategically planning not only for the anticipated outcome, but that of low probability high consequence events - as we look toward a recovery both economically and socially in 2021.

Vaccines, End of Story?

In Canada, we have reportedly pre-ordered more vaccines per capita than any other country - which in itself should be a commendable achievement. As of January 4, 121,327 vaccine doses have been administered nationwide. In Ontario, where we are headquartered, the goal, or hope – is that 1.1 million Ontarians will have received the vaccine by March and  8.5 Million by end of July, this of a population of 14.7 million. Thus, achieving a 60% vaccination rate by mid-summer, and the fight against the pathogen nearing completion. Not factored into this discussion is the human reaction - should the success of this vaccine rollout be frustrated by a material portion of the population opting not to get vaccinated, or with the population questioning the effectiveness of the vaccine against new variants, namely the UK variant or the potentially more concerning South African variant, it remains to be seen whether this goal is achievable or whether it is too optimistic.

Globally, Israel leads the way with over 13% of their population vaccinated after only 3 weeks of rolling out their program, while Canada has just 0.31% of its population vaccinated during the same period. Extrapolating these numbers would put us at a vaccination rate of less than a 3% by summer. While we should expect learnings and increased efficiencies in our vaccination program - we have a lot more work to do to catch up.

COVID Vaccination doses Administered

Source: Our World in Data, COVID Vaccination Doses per 100

Bitcoin, A Retirement Plan

If we turn our attention to sensational news in the financial markets, Bitcoin’s (BTC) recent surge from $19K in mid-December to its new all-time high of $32K has felt meteoric and has left many experienced investors scratching their heads, with many millennials saying “I told you so”.  Cryptocurrency enthusiasts alongside their 'Teslanaire' peers (read: millionaires via purchase of Tesla Stock) have been telling all who will listen that this rally is just the beginning and if one were wise and calculating, placing a healthy portion of your savings into these assets will net you a healthy profit, and a swollen retirement account. The thesis behind a move higher in Bitcoin is that a 'Halving' event which occurred last May has constrained the supply or ‘mining’ of coins, which now is being met with an increase in institutional demand, and voila, JP Morgan and our crypto friends are now betting on Bitcoin $100,000.

Bitcoin Price Projections

Source: Bitcoin Will Rise Above $100,000 In 2021 | Nasdaq

The question is; if all the nuances of Bitcoin were described to you (or TSLA for that matter), in explicit detail, by very intelligent people, whom you trusted and you knew had the very best intentions, what percent of your net worth would you place in this trade? 5%, 30%? 100%? With investment outcomes, we intuitively know that diversification is likely the best approach and certainly an allocation of 100% to any one idea leaves little room for error.

A Perfect Catch

So, what does our vaccination plan and a cryptocurrency retirement account have in common? They both highlight probabilistic outcomes, yet both present upside/downside scenarios that may be unfavorably skewed depending on the weight in which we attribute to them not happening. In sports, many a playoff series and the fates of teams have come down to a single moment of performance; a moment which determines success or failure.  Ideally as a team, you would wish to have many chances for success. A smart coach will have more than one play ready, especially if the game is not going as originally planned. This concept applies to any situation with negative outcome risk, whether there is a retirement account, our health, or a trophy on the line.


We continue to hope for society’s benefit that vaccinations will roll out as planned and are effective, Bitcoin goes to 100K and that we all make that ‘Perfect Catch’. In the event our future path alters from these ideal outcomes, we need to ask ourselves; have we done enough to plan for a less than ideal scenario? Are we being the good coach, or betting everything on a long pass?  In investment planning, we would not prudently put all our savings into one asset class, regardless of how confident we feel. As business managers, it may be wise to prepare for contingencies like a slower 2021 recovery and potentially longer lockdowns than hoped for. And for capital allocators, prudence with projections and a healthy skepticism of future earnings may be warranted. As a manager of risk, we have a fiduciary responsibility to ensure we have taken the time to anticipate alternate outcomes, so let us take this moment to reflect on the 2021 that could be, as well as the one that ought to be.

Final Thoughts

Betting against the ingenuity and determination of humanity is a bad bet and one we would not take.  Here is wishing our brightest scientific minds, our frontline workers, and everyone who is executing on this momentous task; the energy, the safety and most of all the success that will be required. Godspeed.

What We’re Watching this Quarter:

[1] ICE BofA CCC & Lower US High Yield Index Effective Yield (BAMLH0A3HYCEY) | FRED | St. Louis Fed[2] Canada Chartered Banks Prime Lending Rate | 1960-2020 Data | 2021-2023 Forecast (tradingeconomics.com)[3] Canada Government Bond 10Y | 1985-2021 Data | 2022-2023 Forecast | Quote | Chart (tradingeconomics.com)[4] Canada Unemployment Rate | 1966-2020 Data | 2021-2023 Forecast | Calendar | Historical (tradingeconomics.com)[5] Canada Average Hourly Wages in Manufacturing | 1991-2020 Data | 2021-2023 Forecast (tradingeconomics.com)[6] Canada Manufacturing Sales MoM | 1981-2020 Data | 2021-2023 Forecast | Calendar (tradingeconomics.com)[8] Daily Exchange Rates Lookup - Bank of Canada[9] GSPTSE | S&P/TSX Composite Index Overview | MarketWatch


Henon Capital Partners is a boutique private capital specialist.  We are a relationship first, tech enabled financial services company founded to help Canadian mid-market companies grow. Connecting #growthwithcapital


The opinions expressed are those of Henon Capital Partners (“Henon”). The information and/or analysis contained in this material have been compiled or arrived at from sources believed to be reliable but Henon does not make any representation as to their accuracy, correctness, usefulness or completeness and does not accept liability for any loss arising from the use hereof or the information and/or analysis contained herein. Henon disclaims any responsibility to update such information. Neither Henon or its affiliates, nor any of their directors, officers or employees shall assume any liability or responsibility for any direct or indirect loss or damage or any other consequence of any person acting or not acting in reliance on the information contained herein.

All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their unique situation. Neither Henon, Henon Capital Ltd., nor any of their affiliates or representatives is providing tax, investment or legal advice. Past performance does not guarantee future results. This material was prepared solely for informational purposes, does not constitute an offer or an invitation by or on behalf of Henon to any person to buy or sell any security and is no indication of trading intent in any fund or account managed by Henon. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Unless otherwise specified, all data is sourced from Henon.

The Stylized Henon Design, and Henon Logo are trademarks of Henon Capital Ltd.


“Compared to other countries, Canada has procured the most vaccine doses per citizen” - Health experts urging quicker vaccine rollout as COVID-19 cases surge, doses sit in freezers | CTV News

“Ontario hopes to vaccinate approximately 8.5 million residents by the end of phase 2, at a rate of about 150,000 residents daily. The province has a population of 14.7 million..” - When will you be eligible for a COVID-19 shot? Ontario lays out plan for mass vaccination campaign | CBC News

“In one Chicago hospital, 40% of staff say they won’t take it” - Fears Prompt Some Medical Workers to Balk at Getting the Covid-19 Vaccine - Bloomberg

Large Numbers Of Health Care And Frontline Workers Are Refusing Covid-19 Vaccine (forbes.com)

"It might decrease vaccine efficacy from 95% to something like 80% or 85%," he said. "It would be a modest effect, not a dramatic effect." - New Covid strain: Genetics experts worry vaccines might not work quite as well against UK variant - CNN

“The new coronavirus strain that emerged in South Africa is even more problematic than a mutated form that prompted new lockdowns across much of the U.K., health authorities said on Monday.” - South African Covid-19 Mutant Strain Raises Growing Alarm in the U.K. - Bloomberg

“Country could be headed for another lockdown” - U.K. Bolsters Vaccination With Oxford Shot as Covid Surges - Bloomberg

Coronavirus: Israel leads vaccine race with 12% given jab - BBC News

Tesla's rocketing share price this year has created an army of millionaires - self-named 'Teslanaires'. -Tesla: Soaring share price creates army of 'Teslanaires' - BBC News

Bitcoin Halving Countdown | CoinMarketCap

“JPMorgan says bitcoin could rally as high as $100,000” - JPMorgan says bitcoin could rally as high as $100,000 - but warns that such a surge would be 'unsustainable' | Currency News | Financial and Business News | Markets Insider (businessinsider.com)

“It took bitcoin (BTC) 10 years in existence to reach the $20,000 mark, on Dec. 15. Then it took just 17 days to reach $30,000.” - Bitcoin shatters $30,000 as 2020 price surge continues in new year (yahoo.com)

“Bitcoin Will Rise Above $100,000 In 2021” - Bitcoin Will Rise Above $100,000 In 2021 | Nasdaq

“Nov 2013 to Jan 2015, BTC total return -87%” - https://www.researchgate.net/ figure/ Historical-Corrections-of-Bitcoin-BTCUSD_tbl3_329973120

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