Yesterday was one of those days when you just want the closing bell to ring.
Pretty much my entire portfolio was down.
But one stock is hurting more than most.
Novo Nordisk.
I recommended it at the start of the year, when it looked like the company had turned a corner.
But it’s now down 25% in 2026 and it’s all down to fundamentals.
So this is one of those where I straight up got it wrong.
When I looked at NVO at the start of the year, I saw a dominant company with a blockbuster product, selling at a price that looked reasonable compared to its recent history.
What I underestimated was the pipeline risk sitting underneath it.
Novo had been developing a next-generation drug called CagriSema — a combination treatment they hoped would leapfrog the competition.
Then before the market opened yesterday, the trial results landed. CagriSema produced around 23% weight loss over 84 weeks.
Sounds impressive, right?
The problem is that Eli Lilly's competing drug, Zepbound, achieved around 25.5% in a head-to-head comparison.
In drug development, that gap is enormous.
On top of that, Novo had already warned in early February that 2026 would see their first annual sales decline since before the Ozempic era due to a combination of lower U.S. prices, growing competition and patents expiring in markets like Brazil and China.
So while I saw a business that had dominated its market and assumed that dominance was durable. What I didn't adequately price in was how much of Novo's valuation depended on CagriSema being a winner.
The stock now trades at around 10 times forward earnings, and the deep value crowd are starting to perk up.
But whether that makes it a buy from here is genuinely uncertain, and the next few months will go a long way to showing whether management has a credible path forward.
And I'm not here to double down or paper over a bad call with optimistic spin.
It wasw a bad call, plain and simple.
What I can tell you is that the Wheel Strategy, selling options to generate income on stocks you're comfortable owning does give you a meaningful buffer against exactly this kind of situation.
When you're collecting premium every month rather than just sitting and hoping a stock goes up, a bad pick stings less. The income softens the blow and gives you more flexibility to manage the position over time.
It doesn't make bad picks painless. But it makes them survivable.
Oliver