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One failed selection I made in the game so far has been Invitrogen. They are primarily a consumables supplier to the biotechnology and research industries. Their reputation is top tier in the research community.

The company is richly priced with a P/E of 32. They have been on an acquisition spree for the last few years, but have stayed within the core market of laboratory consumables supply. The acquisitions have led to a balance sheet where ~90% of the shareholder equity is comprised of goodwill.

Anyway, they missed earnings last quarter and like any high P/E company the price dove because of it. It has since recovered, but I overreacted and sold on the drop (lesson there as well).

Bottom line is I need to get a better handle on assessing goodwill. I'm inclined to allow for more in 'technology' companies where patent positions and such do have material value. But need to learn how to best identify a serial acquirer that is not building value vs. a company building strength through prudent acquisitions. Gonna have to hit a few books.

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