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Welcome to the Cannabis Investing Newsletter Forum. Feel free to find your favorite cannabis stocks and contribute content as you please; content that continues the discussion of, and analysis of, cannabis stocks. – D. H. Taylor

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Coping with volatility in the mj sector

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Hi DH,  I find your videos very encouraging as we hear about the great fortunes ahead in the sector.  I’ve been investing in cannabis for five years and have gone through many ups and downs.  I watched my Ira account move from $55k to $95k and then fall to $11k (early 2020), and then back up to $55k; currently I am down to $35k after last weeks short lived rally.

it’s tough emotionally to face my portfolio with the share prices tanking month after month, while meanwhile my friends in the broader market are laughing all the way to the bank.  Many days I don’t even look.

just wondering if you and other members have any techniques for dealing with what is a very punishing sector?   

 

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Hey Mark, 

 

Fellow Cannabis investor know you are not alone. Most of us here are feeling the pain. Pain enjoys company.....Take a step back and remember your IRA is invested in an industry that is Federally illegal. However, that day is quickly coming to an end as legalization is reaching market mass. It will happen in due time and when it does there will be moments when your account sky rockets, because shorts need to close the position, just make sure you have a plan and stick too it. Also, think that you are invested in an All-American industry, the product is grown in the U.S, processed in the U.S, sold in the U.S, all the labor at those key levels is American, and the consumer is American. This is an extremely unique industry and your friends will pat you on the back when the time comes. Patience is a virtue. 

@b17jayhawker Thanks, I agree with everything you have said. Friends suggest I sell and invest in tech, but I know if I switched to other sectors legalization or other catalysts would occur and meanwhile whatever switch to drops. So, I am sticking to Tom Petty's theme: I wont back down and Damn the Torpedos!

First off, love that song!! Just stand your ground. I tell my friends I'm going to die on the hill of Cannabis legalization and me making money off it. As DH always points out and says we are buying future valuation at massively discounted rates because for some reason the market believe cannabis stocks are insane. You can invest in many great Tech companies there are always a few that are undervalued like Micron was for 90 days and then boom analyst upgrade and stock runs. We all know when legalization occurs Americans are going to be smoking a ton of pot. I'm 30 and know my generation smokes a ton and I'm not sure about you, but you seem older and I'm sure you are aware that your generation smokes a ton too...This is the early innings and we should be blessed to continue to buy at these levels....that's what I tell everyone....just keep buying...

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Hey Mark... @mebarrettyahoo-com & @b17jayhawker (Thanks for this excellent response).  

My take is simple: you are a value investor and the value in the stocks you are buying is intrinsically significantly higher than the broader market.  

Do you know who else is a value investor?  There's a guy named Warren Buffett that uses the same approach.  He's done pretty okay over a long period of time.  

What I talk about here on my site are the same principles.  Think long-term and don't fret over the smaller picture from day-to-day.  

Trust me, these stocks look like they will continue lower. I had hoped they would have turned last week, but they started dropping again.  Fine.  

Turn the glass upside down and find stocks that are going to perform well over many years' time.  You'll be glad you do.  You are buying future earnings and cash flow. Every singl e company out there is a cash flow machine of some type.  These cannabis stocks are providing high levels of cash flow at discounted prices.  Why would you buy anything else, when you look at future cash flow from that perspecitve.

This week, I am not posting any new content.  On Monday, I am posting a video and analysis on short selling and plan on incorporating this into my new videos.  In the meantime, I am busy rebuilding aspects of the website.  Cash flow statements are going to start showing up on the website.  So, this will be another tool you'll be able to use.  From that, you will be able to see that these stocks are way, way cheap.

These stocks will get there. Think value.  Think long term.  

@cannabisinvestingnewsletter Thanks DH. A video on short selling would be very useful. I see the OTC Short reports with 50% or more of shares being shorted daily on many of these great companies (e.g. Verano).
My problem is that I was living off profits to supplement my SS income these past 5 years. It worked well until 2020 with the collapse, and I did not take profits often enough.
The often-heard advice of only investing what you are prepared/able to lose is appropriate for this sector. The problem is intermittent positive reinforcement,, which is the same thing that keeps gamblers pulling the levers of the one-armed bandits. Day after day of losses, and then the brief relief rally, and so on.
Its nice to belong to a community of investors and I think this site will grow in that regard. I used to belong to 420 investor (Alan Brochstein), and that was very helpful to have a community and expert to keep us on track. That was too expensive (600/year), so I stopped, but I am glad to have found this community and to have access to your expertise!

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@mebarrettyahoo-com should have the short-interest video up on Monday.  Today, I’m sitting in a library and going to upload a ton of charts to the forum for financial data.  I’ll be occupied all day.  Then, Saturday, I will upload the short interest data.  Monday, the video.  

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The best way in my opinion is to just not look at your portfolio balance.  Besides that consider your investments to be worth what you believe them to be worth.  For example, I have $5000 invested in MariMed at 75 cents.  I believe the stock should be worth $1.80 at the bare minimum.  Therefore, I simply consider my position in MariMed to be worth $12,000 no matter what the market says.  

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