My Gilead Mistakes

Jun. 24, 2016 2:23 PM ETFL, GILD70 Comments

Summary

  • Every investor makes mistakes and it's important to learn from them.
  • I have made some mistakes in my handling of Gilead this year.
  • I examine what went wrong and how I can improve my investment approach.

Introduction:

Making investing mistakes is never a pleasant experience. Ideally, one could spend their entire investment career learning enough from others' mistakes that they didn't make any mistakes themselves. However, I've never met an investor who hasn't made some significant mistakes.

The good part about making mistakes (provided they aren't too big) is that if one can take the time to honestly assess what may have went wrong, then they may be able to prevent making a similar mistake in the future. Do this enough times, and one should be able to make less and less errors and eventually outperform the market.

Sometimes one can come out on the losing end of an investment without making a mistake. One can calculate that the odds are in their favor, be correct about those odds, and still have luck go against them on any given investment. So a single investment in isolation usually isn't enough to know if a mistake was made unless one's particular thesis for the investment was clearly in error. For example, if one thinks a company will beat earnings estimates and then the company misses estimates instead, then we know that an investment was probably a legitimate mistake. But in many other instances an investor probably needs a larger sample-size to assess if there might be something embedded in their investing process that is consistently contributing to errors.

I have been writing for Seeking Alpha for about nine months now. During that time, I have made 19 recommendations. Seventeen of them made money or are currently in the green, and two of them are currently in the red. In this article, I'm going to examine one of the ones that is in the red: Gilead Sciences (GILD). The goal of examining this mistake is to see if

This article was written by

Cory Cramer profile picture
20.21K Followers
One-of-kind research using historical cycles to identify tops and bottoms

My analysis focuses on the cyclical nature of individual companies and of markets in general. I've developed a unique approach to estimating the fair value of cyclical stocks, and that approach allows me to more accurately buy near the bottom of the cycle.

My academic background is in political science and I hold a Bachelor's Degree and a Master's Degree in political theory from Iowa State University. I was awarded a Graduate Research Excellence Award in 2015 for my research on conservatism.

Disclosure: I am/we are long FL, GILD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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