Greed or Gullibility

[Dividend Watcher]

I was reading Bob Ciura's post on Gilead on SA and came across this in the comment section:

Quote:Yes, but how many either forget or are ignorant of the fact that GILD was up to $123 a share. There are many, as myself, unfortunate to have bought it after its crest, and little did we know that this stock would lose us all the wealth we had taken years to gain. Few on these boards have been sympathetic; actually, many have been extremely nasty and abusive to us.

It is easy NOW for those who have picked up GILD at $82-$84 to be celebrating the now rising stock. You don't know what it is to be an investor who bought at what turned out to be the absolute worst time in the stock's history, and have been financially ruined the fall that appeared endless. How would YOU handle watching it drop, day after day, week after week, and, not wanting to take the loss, simply held on with hope until the day came where you decided you must sell as you cannot take any more of the tremendous losses you incurred. And, THEN, to watch how cleverly the filth of Wall Street played with this - pushing it up a little, then down, because their experts and their machines and algorithms told them GILD was bottoming. And, they actively and relentlessly kept performing their manipulations to TRICK the regular investor, like myself, into NOT buying back in, and waiting for the stock to come back to where I gave it away, but the window for that chance was a very narrow one I missed.

But these are the parts of the whole GILD scenario that isn't addressed or recognized by most all articles. It's either bullish commentary or bearish commentary; neither of which provides one iota of help for those like myself who lost countless amounts of money, and can't find a way back.

While I feel sorry for this bloke, I wonder why he purchased it in the first place. I'm guessing he didn't do much of his own analysis and probably bought on one of those "Rah Rah, GILD" articles thinking he was going to become rich(er) overnight.

I bought GILD before they even announced their dividend as a speculative play thinking, with that much cash floating around, they would either start returning some of that cash to investors or make some spectacular acquisition that would have every one wanting to pile in. I obviously was hoping for the former and sure enough, they did. I also think it was prudent, since they obviously are being very picky about an acquisition, that the board only raised the dividend by 10% on the anniversary of the dividend initiation. Yes, I'm ignoring the huge buybacks since I think part of that is to limit the total dollar amount of dividend liability to maintain a healthy dividend growth rate without stressing their cash needs when they're required. It sets investor expectations and the possibility of future dividend growth that is not outrageously unsustainable.

But I digress. I wonder what this commentator's expectations were when he bought. It's obvious he's not thinking of the long term and is setting himself up to be a long term under-performer by buying high and selling low in whatever shiny stock he's looking at. It's also sad that he's blaming the "filth of Wall Street" for his own blunders and inability to decide what he should do next.

I think it's a cautionary tale for all of us to not let emotions rule our investing decisions.