68.15 -1.98 (-2.91%) Sell

GILD is a falling knife, continues to bleed every investor trying to catch it

13 min read

GILD was among the worst performers today. On a longer term basis, investors in GILEAD SCIENCES INC made -0.03% per day. Friday's performance of -2.91% was a significant underperformance compared to it's daily average.

[Themes containing GILD]

GILD showed a down trend over the last 3 months. During this period GILD lost -6.01% and saw a maximum drawdown of -15.71%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in GILD till volatility reduces and a clear trend emerges.


GILD has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 3 days, GILD underperformed the SP500 index on 50% days. Which indicates that on days GILD underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

GILD was profitable on 50% days in the last three months. During this time, it delivered on average -0.08% per day. It delivered it's worst daily return of -5.36%, during this period, on Wednesday, 31 Oct, 2018. There was initially a bullish trend during this period which started on 26 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +5.23% to investors. This was followed by a bearish trend that started on 14 Nov, 2018 and ended on 23 Nov, 2018. This bearish trend lost -6.26% of investor capital.

GILD had 5 profitable and 7 loss making months over the last year. During the last year, GILD underperformed SP500 index on monthly return basis. GILD significantly outperformed SP500 index in Jan 2018, when it returned +13.09% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. GILD had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Feb 2018 to May 2018) during which period it delivered -18.22%. It is interesting to note that both GILD and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Beware of little expenses. A small leak will sink a great ship.

GILD is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in GILD's volatility from 10 Sep, 2018 to 31 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 10 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that GILD has significant positive skewness in it's return distribution. This indicates that investors can expect GILD to recover from drawdowns quickly. Which makes GILD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in GILD derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than GILD. Therefore, SP500 must receive a lower allocation than GILD in your portfolio. GILD usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in GILD), three large cap instruments that deserve special mention are V, MSFT and PFE. They have all outperformed the market and must be closely watched for investment opportunities.

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