Is Gilead Sciences a Buy?
I recently came across a quote from Woodrow Wilson highlighting the difference between things that follow a set of rules and those that react to changes and evolve. Wilson called the latter "accountable to Darwin," the latter to Newton. It occurred to me that many investors, myself included, often fall into the trap of believing that the market is rational, i.e., accountable to Newton -- when in reality, we should be looking to Darwin.
If investing followed a logical set of rules, a successful strategy in the past would naturally be successful the next time. But in investing, that type of thinking can be a costly trap. A real-life example is Gilead Sciences (NASDAQ: GILD), where management is attempting to repeat a strategy that led to a soaring share price and booming profits a decade ago, and investors should beware.
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Source Fool.com
