Are You Sure You Want To Buy Pot Stocks?

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It’s not as bad as it looks. In this account I used to own Canopy Growth and Aurora Cannabis at very low prices, and sold them at much higher prices. The saddest part of this account is that I had a 100% gain on Ianthus and CannTrust. The lesson? Don’t treat pot stocks like blue chip stocks.

What’s the sole holding that is green? Good old Royal Bank. Maybe the lesson here is to not buy pot stocks but I wouldn’t have quadrupled this account in 3 years if it wasn’t for pot stocks.

I have been phasing out of cannabis stocks. Hence my newly smallish positions in American MSOs. This may be my last run at buying the pot stock dip. The very easy money has probably been made. I still hold a somewhat significant amount of Canopy Growth in my RRSP account which I’m not feeling so hot about at the moment. I should have sold at $70 a few months ago. Although, I say such things every time it dips and then when it shoots up those feelings erase. I’m not too sure who is right.

Actually, the saddest part of this account is that it shows I bought LG.V stock.

Buy, Sell or Hold Canopy Growth?

Marijuana stocks are all the rage lately although second to Bitcoin if I had to guess. Everyone I talk to has heard of Bitcoin but not Canopy Growth.

I’ve been a shareholder of Canopy Growth since the $2.75 range, and have sold almost half my shares on the way up. Some people say this was the smart thing to do but the numbers say otherwise. Every time it doubles I think to myself, there’s no way it can go much higher, and then it does. Now I just don’t know what to think anymore.

Most of the professional investors including Warren Buffett would tell me to get out completely but then again if I listened to them I wouldn’t have bought this stock in the first place.

What you will always hear is that Canopy Growth and all the other marijuana stocks are overvalued. They definitely are in conventional terms. Amazon though has been overvalued since 1997 and Netflix is always overvalued as well. $1000 of Amazon stock at its IPO is now worth over $1,000,000.

It’s easy to make a judgement on existing numbers and the short-term future but it’s much more difficult for most people to see what the longer-term future holds. Once the future becomes the present though it all makes sense.

The following is an excerpt from an article written by the CEO of Netflix 8 years ago regarding short interest in the company.

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You can replace “Netflix” with “Canopy Growth” and it would seem appropriate. As of right now Canopy Growth seems to be doing all the right things and would be the horse to bet on. I believe in the company and my only doubt is that shit happens. I realize Canopy Growth is not comparable to Amazon or Netflix in terms of size and market but the situation is similar — market leader in a huge new industry.