Weed stocks? Yeah, weed stocks!

[A790]

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One thing people aren't considering here is very long term (i.e. 20 years out). With these massive Canadian companies being as established/mature as they are now with a small market like Canada, imagine when other countries follow suit and legalize. Personally i think it's only a matter of time before other big major countries legalize. Maybe not in the next 5 years but i'd be willing to wager that in 10-20 years its legal in all westernized countries. With countries new to the game, Canadian players like ACB will be in a position to enter those markets and become massive multinationals. They are already getting involved in Germany medical markets and other European countries soon to follow.

Another thing to consider is the "downstream" (lol) products like edibles/extracts/vape pens/etc that are coming later on. They aren't allowed now so the big legal companies haven't touched them yet (only grey market ones have so far), but i think that's where a lot of value will be created too.

Really i feel this is just the beginning IMO, but patience will be key.

Anyways those just my thoughts. Always do your own due diligence but personally i'm keeping a few 'blue chip' pot companies in my long term accounts and banking on them being worth a lot more by the time i'm retired.

That aligns with my thinking. I think the sector has legs in the long term.

[max_boost]

shakalaka should research this the way he researches his cars. I mean he will devote hours to picking the right car at the best price but will just casually take our word on the best pot stock haha

[taemo]

I agree that in the long run, they will be fine but valuation are pretty high and not like most of them are generating enough profit.

I will sell a major portion within the next couple of months and wait for the inevitable dot-com crash before re-entering.

[shakalaka]

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shakalaka should research this the way he researches his cars. I mean he will devote hours to picking the right car at the best price but will just casually take our word on the best pot stock haha

Haha that's the issue with topics you're interested in vs the ones you aren't. Unfortunately I am only interested in the ones that make you spend money and not the ones that make money.

You're a smart guy so I'd take your word where to put some $ in. Haha. I have no reason to believe that any of you would want to purposely screw me over. lol

[max_boost]

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Haha that's the issue with topics you're interested in vs the ones you aren't. Unfortunately I am only interested in the ones that make you spend money and not the ones that make money.

You're a smart guy so I'd take your word where to put some $ in. Haha. I have no reason to believe that any of you would want to purposely screw me over. lol

haha glad you read the humor in my post

I have this https://www.horizonsetfs.com/hmmj

Give it a glance over.

I can't hold individual stocks as it keeps me up at night. I make less with an ETF but also lose less too.

I'm all about the slow and steady these days and holding for the long run.

I have held Aphria, Canopy, Hydropothecary, Aurora all separately at one point and made some good money but man it just makes me antsy lol So now I buy HMMJ and it has exposure to all of them.

Good luck Shak.

May you make a thread for each stock you buy like what you do with cars lol

[CorvetteMusic]

I got money in Aphria, Emblem and CannTrust. I lost quite a bit this week but it doesn't phase me. I'm holding onto these until at least October. If you want less risky stocks.... Starbucks is not going to drop much further.

[themack89]

I bought a bunch of Maricann. If not for their future production prospects and actually generating revenue, then at least for their business infrastructure and assets. I think $250m market cap for what they got going on is disgustingly undervalued relative to the sector.

[themack89]

edit double post

[themack89]

Here's something the nerds might be interested in. I have a Philosophy that someone whose full time job it is to analyze stocks and invest millions into the industry has more time to figure out which companies may be better picks than others. I once asked myself, how could I leverage that information? I convinced myself that a simple and practical way to do it was to get lists of ETF holdings, and compare the relative holdings weight of each stock compared to it's market cap. Generally speaking, the lower market cap a company is, the more risky it is.

Once you plug all of this into a spread sheet, what you find actually makes some sense. Here is an example of the largest holdings and their respective market cap for HMMJ Holdings:


Now, to apply an arbitrary risk metric, you'd take the Market Cap and figure out how many percentage points of holdings you have per X amount of Market Cap.
In my case, I used the formula: [ Weight% / MarketCap ] * 10,000
The * 10,000 was just to make it a more palatable number.

So, now we got some measure of what kind of risk appetite they have for each individual stock. Here is what it looks like for HMMJ as of July 4th, 2018:


I will leave off with the snapshot changes I captured from March 19th, 2018 until July 4th, 2018:
(The yellow highlights are newly added stocks to HMMJ holdings, so it is obvious they will probably have the greatest changes and high ranks.)


I'll make a link to the excel file if anyone is interested in playing around with it. I pull the data with Googlesheets and then I just copy and paste it into Excel for compatibility purposes. But I encourage you to come up with your own metrics! This is by no means the final destination, I simply use it as a starting point because there is too little time in the day to read up on every single company out there.

[killramos]

Or you could use volatility to asses risk. But that would be silly lol

[themack89]

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Or you could use volatility to asses risk. But that would be silly lol

I was interested in this method because it leverages other people's research. It's a combination of qualitative and quantitative filtering. Example: some expert, or team of experts, who runs an ETF for Marijuana stocks, has some kind of favoritism for Neptune, IIPR, and Zynerba. I wonder why that is, now maybe I can go Google them. Basically it's fishing to benefit from somebody else's Alpha without taking on the unwanted Beta.

Curious to hear how you do it based off volatility.

[killramos]

https://www.investopedia.com/terms/v/volatility.asp

[themack89]

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https://www.investopedia.com/terms/v/volatility.asp

Thanks. You're not the only one who took a finance course or two in university.

I was asking how you use volatility to help filter for your picks.

[killramos]

Mostly just a comment on why bother trying to back calculate risk, when methods to estimate it are well established. One thing to take a course but it’s another to acknowledge and understand it. But go ahead, reinvent the wheel lol.

I think by the time you notice published changing weights in various etf’s it has already been priced in and you are just forever chasing the wave and alpha was never there.

As for how to filter, I don’t, I think it’s a waste of time. Just pay your nominal fee to own the etf.

[themack89]

You're kind of missing the point. I used to be deep into that stuff (to the point of trading volatility smiles, diagonals in commodities, etc), so I know what it means to acknowledge and understand volatility. But the number of ways you can bend and contort it to find numbers that fit your view are countless. Example, you want to look at Sharpe ratios? Why not Sortino, Omega, Treynor, Romad? etc etc...

I'm talking about extracting a narrative from another analyst without becoming the analyst or diving hard into their work. To me, it's the ability to gather insight from someone else's reading and research, to get a glimpse into their "view". It's a way of having someone process qualitative information for you--to tell a story--so you don't have to.

Why pay the nominal fee for the ETF when you don't want to own Aurora and Canopy?

[killramos]

We definitely agree on one thing.

I am most definitely missing the point.

[AndrewMZ3]

Anyone looking at Sproutly, SPR on the CSE? They started trading today

[Neil4Speed]

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Here's something the nerds might be interested in. I have a Philosophy that someone whose full time job it is to analyze stocks and invest millions into the industry has more time to figure out which companies may be better picks than others. I once asked myself, how could I leverage that information? I convinced myself that a simple and practical way to do it was to get lists of ETF holdings, and compare the relative holdings weight of each stock compared to it's market cap. Generally speaking, the lower market cap a company is, the more risky it is.

That's actually a really interesting approach... essentially saying that if it has a higher relative weighting (to market cap) in the ETF, it is something that the fund believes in.

I like it. Thanks for sharing.

[suntan]

I don't think HMMJ is actively managed, nor is the underlying index.

Larger market cap companies typically are held more because they're more liquid. It's really hard to hold small companies when you have billions in cash to invest.

[CorvetteMusic]

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I bought a bunch of Maricann. If not for their future production prospects and actually generating revenue, then at least for their business infrastructure and assets. I think $250m market cap for what they got going on is disgustingly undervalued relative to the sector.

I bought a ton of Maricann shares this week. So far I got Newstrike/UpCannabis (hip) Hydropocathery (hexo) Aphria is the one I've put the most money into , CannTrust is my 2nd largest, and Emblem.

Oddly enough I see Aurora blowing up but keep holding off buying that. Waiting for a dip under $8.5 a share if that ever happens before doing that. Tilray IPO next week... that is going to be a good one

An easy money making stock right now is LBrands. Easy money