Our total capital realized loss on Pfizer was $7,373.35 from an initial investment of $60,000, representing a 12.2% loss. Including $2,801.28 in dividends earned, our net consolidated loss stands at $4,572.07, or 7.6%.
Losses are a fundamental and inevitable part of investing. The discipline lies not in avoiding them entirely — which is impossible — but in learning to take losses well. That mindset, of closing a position with clarity and reflection, is a critical and often underappreciated component of the investing process.
In the case of PFE, understanding where our thesis diverged from the eventual outcome is essential.
Our original view was that Pfizer’s COVID-driven cash windfall would be strategically deployed to reshape the company, especially as it faced upcoming patent cliffs on several blockbuster drugs. This led to large-scale acquisitions aimed at transforming the company’s drug pipeline — the most notable being the acquisition of Seagen.
In hindsight, Pfizer likely overpaid for Seagen, and critically, it failed to produce a viable weight loss drug — a high-stakes market opportunity where others like Novo Nordisk and Eli Lilly have made major strides.
Another turning point was political risk: the appointment of RFK Jr. as HHS Secretary introduced headline risk due to his anti-vaccine stance, and the broader Trump administration pressure on drug pricing added further uncertainty. These political dynamics weighed heavily on the long-term outlook for Pfizer’s margins and regulatory environment.
Where Our Thesis Went Wrong:
We closed the majority of our position on December 10, 2024, once it became clear that the operating environment had meaningfully worsened. That decision was reinforced by Pfizer’s announcement that it had abandoned its weight loss drug program entirely.
We retained a $20,000 stake, partly driven by FOMO — the fear that we might miss a rebound if the company successfully reinvents itself. At an average cost of $28.94 and with an annual dividend of $1.72, we now receive a ~5.9% dividend yield on that position. That provides a reasonable income return, alongside what is essentially a free call option on a turnaround — should Pfizer emerge as an oncology leader.
Was This Still a Good Bet?
Despite the outcome, the risk-reward profile was asymmetric. Our consolidated loss was 7.6%. Had the thesis played out as envisioned, we believe we could have realized gains in the 30–50% range.
In that context, we view this as a valid investment decision — not because it worked, but because it was thoughtfully constructed, proportionately sized, and rigorously re-evaluated when conditions changed.
