DGI Adventure – 03/31/16 – Payday & Stockholder Anniversary: Gilead Sciences, Inc. (GILD)

I got paid yesterday. Woo hoo! GILD paid $0.43/share and I own 53 shares, which means I woke up $22.79 richer this morning. I own 15 shares in my ROTH IRA and the other 38 in the taxable account. It’s a little bigger position than I intended to have, but that doesn’t mean I have to give back the dividend. I bought my first GILD shares in my ROTH IRA almost exactly one year ago on April 1st 2015. I think it’s as good a time as any to chat a bit about GILD.

I first wrote about GILD on September 29th, 2015. That was one of my earliest posts on this blog. At that point in the space time continuum the share price had closed at $94.80/share, which was a bit below my then cost basis of $96 and change. Overall I was proud of myself. At the time, there had only been a few brief moments where my particular entry price had been available. I felt good about my entry point. And then the price started going right back up.

And then it came right back down. After touching ~$111 at the end of October, it started to come back into my original cost range again as the year closed out. I still liked owning GILD, but I didn’t want to own it in my ROTH anymore. I felt like I was “wasting” the tax advantage on a sub 2% yielding stock. So I hatched a brilliant plan. If I could pick up the same number of shares in my taxable account for roughly the same cost basis, I could sell the ROTH shares on the next bounce and essentially “transfer” ownership to a more tax favorable allocation. I actually bought a few extra shares (18) for $96.00 share (even less than my original cost!). Everything was going perfectly…except for the part about “the next bounce.” GILD just kept going down. When I summarized the actual limit order execution, I suggested that maybe I would buy a little more if the price kept falling. Well, Mr. Market obliged, and I did indeed pull the trigger. I bought 20 more shares at $82.50/share. I couldn’t help myself at that point.

So between the three purchases my average cost basis is now ~$91.33/share. It closed today at $91.86

Futility in Chart Form:

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GILD share price – April 1, 2015 – Present (1 year) – Chart from Yahoo Finance.

I’m not sure what else to say at this point. There’s been a lot of negative headlines about GILD lately.

That was my major purchase during the last bout of major volatility. Of course I buy the dip that doesn’t bounce back as much. Just look at how bad biotech has been recently:

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IBB vs SPY Q1 2016 – Chart from Yahoo Finance.

Part of me definitely doesn’t feel as smart as I did last year. But there’s another part of me that’s still pretty bullish on GILD, and I still like my switcheroo idea; it’s just taking longer to execute than I originally planned. To be fair I didn’t really have a time frame for it anyway. The beauty of it is that even if it takes a while to play out, I can expect to collect dividends in the meantime, and that makes me happy.

Thou can’t time the market, so thou shall not try to.

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