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Should I Sell Novavax Shares?

By Taylor Carmichael – Jun 30, 2020 at 12:49PM

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I'm up 1,340% in nine months on this investment. Is it time to take some profits?

It's hard to sell a winner. Any time I even think about selling some Novavax shares (NVAX -1.99%), the darn stock price goes up another 6%. I also haven't taken any profits yet from my investment in the biotech because I haven't even owned it for a year, and there are tax advantages to hanging on at least that long.  

Historically, my worst investment mistakes were my sales. Over a decade ago, I sold Amazon and I sold Netflix. That's kind of like leaving $1 million on a bus.  

Don't kid yourself about selling a stock -- it's the most dangerous thing you can do in the stock market. Forget about all those bad buys you and I have made over the years. What did you lose in your worst picks, 90% of your money? All of those poor purchase decisions are so irrelevant. 

It's the sales you make too soon that haunt you. 

Businessman looking at Buy or Sell graph

Image source: Getty Images

I bought Novavax because of its flu vaccine candidate, NanoFlu. At the time, we were all waiting on news from a pivotal clinical trial. It seemed to me that the possible reward greatly outweighed the risk, so I bought shares, and added to my position in January. And then in March, the company delivered positive results from its phase 3 study. 

By then, that news was almost irrelevant. The stock market (and much of the world) was (and remains) laser-focused on COVID-19. And Novavax is now pursuing a vaccine for that disease, NVX‑CoV2373. That's why my Novavax stock holdings are skyrocketing -- it was an unpredictable, black swan event. 

A month ago, I said Novavax was a buy at $48. Today, I think it's still a buy at $83. Novavax has a good shot at winning this race.

Will I take some profits before the phase 1 clinical trial data for NVX‑CoV2373 is announced in July? Yes -- because it's a binary event, and anything can happen.  

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Taylor Carmichael owns shares of Amazon and Novavax. The Motley Fool owns shares of and recommends Amazon and Netflix and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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