I did my research. That’s the part that still gets me.
This wasn’t a hot tip from a guy at a barbecue. I pulled up E*TRADE, checked the market movers, looked at the analyst recommendations, and read about the company. Cassava Sciences — ticker SAVA — was developing a drug called simufilam for Alzheimer’s disease. The Phase 2 clinical trial results had just dropped and they looked extraordinary. The story was compelling: a small biotech potentially cracking one of the hardest diseases in medicine. I believed it. I put in a few hundred dollars and watched what happened next.
What happened was the stock exploded.
Watching a position climb what feels like 1000% does something to your brain. You start running numbers you have no business running. You feel like you saw something other people missed — that the research paid off and the market agreed with you. I held. Why would you sell something that was working?
Then the questions started.
Researchers began challenging the trial data. Short sellers published reports. The story that had seemed so clean started to look complicated. I held through that too — the company kept defending its research, Phase 3 trials were still running, and I convinced myself the noise was just noise.
In September 2024, the SEC charged Cassava Sciences, its founder and former CEO, and its former head of neuroscience with misleading investors about those Phase 2 results. A consultant who analyzed the trial data had a financial stake in the drug’s success — something the company never disclosed. The full patient data, it turned out, showed no measurable cognitive improvement. Cassava paid a $40 million penalty to settle. The company has since changed its name entirely.
My shares converted along the way into a stock that now trades at fractions of a penny. A few hundred dollars turned into something I wouldn’t bother selling if I could.
What I actually took from it
My research wasn’t wrong — it was incomplete in ways I had no way to detect. The analyst recommendations were real. The market movers data was real. What wasn’t real, it turned out, were some of the trial results underpinning all of it. There’s a category of risk that no amount of due diligence from a retail brokerage account can protect you from: fraud baked into the data you’re reading.
But there’s a lesson underneath the fraud lesson, and it’s the one I think about more. A few hundred dollars in SAVA was never going to ruin me. If I’d been more convinced and put in ten times that, this story reads very differently. Conviction and position size are two separate decisions, and conflating them is how people get hurt.
How I invest now
Today my portfolio looks different. Index funds and ETFs form the core — SMH, the semiconductor ETF, has been one of my better calls. Not because I predicted anything clever, but because I bet on a sector I believe in rather than a single company living or dying on one clinical trial result. I still pick individual stocks. I still use E*TRADE, still check the analyst recommendations, still follow the movers. But I size those positions knowing that even solid research can be built on a foundation someone else quietly manipulated.
Somewhere in my account history is a position now worth essentially nothing. A few hundred dollars that taught me the difference between a good story and a good investment, between doing your homework and trusting the homework of people you’ve never met.
Cheap tuition. Took a while to get the diploma.