Hold or Sell Canadian Pot Stocks? – Nov 2017

This month has been crazy just like it was the same month exactly a year ago. Canadian marijuana stocks having been doubling in a matter of weeks. On Twitter there’s people suffering from mania and FOMO. It’s going to keep on going higher!

Anything can happen but if you’ve been in this pot stocks game you have to think a crash is inevitable. Every time these stocks run up they crash badly. It’s not stopping people who have suffered through these crashes though from thinking it’s not going to happen this time.

What has changed?

They’ll tell you that this time around we are closer to legalization which is true. This time around though the market caps are way higher. Some of these stocks are trading at 2019 and even 2020 projected earnings. To justify their market caps means they have to sell a lot of weed which is not going to happen in 2018 since it will only be legal for the last half of the year.

Yes, there’s the Germany opportunity and possibly others as well but there’s not going to be any significant income from those sources for a long time. In the short-term, the LPs minuscule revenue cannot justify their market caps.

I don’t know about you but if these stocks crashed before the year ends I would feel like a fool if I didn’t at least trim. Have a look at your pot stocks portfolio, if you sold everything or even just a little, that number you see would be the worst you’ll ever do if they kept going up. I just wanted to give you a little perspective.

Everyone’s situation is different though. Perhaps the money you have invested is a small amount of your wealth so maybe it’s no big deal to just let it ride. If it’s a significant portion of your worth then you might be rolling the dice. In the end it is up to you. If I had never sold a share I would be much better off today so there is that as well. My error in hindsight was not buying back on the dips.

I guess we’ll see what happens.