Marijuana stocks are a big risk but…

I buy 100 HMMJ Marijuana ETF @17.72 and 100 WEED.TO @ 27.12 (Canopy Growth), with the CAD cash in the virtual portfolio.

The ETF HMMJ was around 8 CAD in september and tripled to more than 24 CAD to go back down to a little more than 16 CAD and looks to be back on track now.

Marijuana stocks have become a hype, real good thrustful information is difficult to find between all the bla bla, a few companies will go bankcrupt in the coming years, it is quite impossible to know who will dominate this market, and growth depends on government decisions.   All these things are reasons to stay far away from marijuana stocks.  But on the other hand, I believe this market will skyrocket, no doubt about it.  So I think it’s important to be part of it, but avoiding all the troubles ahead will be very difficult and almost impossible, so I wouldn’t jump all in.

Canada is the place to be with the best looking stocks like:

Aphria, Aurora Cannabis, Cannabis Wheaton, Cronos Group, Canopy Growth corporation, MedReleaf, Organigram Holdings,… or just buy a mix with Horizons Marijuana ETF.

These stocks are very big risks and they can sink a lot further, some all the way to zero, but… I want to jump on the exotic marijuana train and it feels a little bit like now or never.  In this case, it is a small percentage of the total I spend.

The risk is that within a few years we will remember marijuana in the same way like the internet stocks in 1999.  Every company with “dot com” in its name went up to the sky and back to earth in 2000.  Only a few exceptions survived the crash.  I believe the same will happen with marijuana stocks, so maybe we first need a crash before go all the way for it.  It’s like 3D printing stocks recently.  When they were hot they were all going up, good or bad companies, it didn’t matter, everybody wanted 3D printing.  After the hype they crashed, like 3D Systems, and nobody talked about 3D printing anymore.  However, have a look at Proto labs, they have gone up more than 100% since last year.  Not bad….

Fish where the fish are

Charlie Munger is a very wise and funny guy.  “Fish were the fish are, and you don’t have to be a very good fisherman to do pretty well”, is what the 94-year old master says, and that is some very solid advice everybody can understand and agree on.   But where are these places?   Do they still exist?  Where to look geographically?  In which sectors?  Which companies?  Or do we have to wait for better times?

I believe there will always be good places but these days they may be smaller and harder to find.  However, with a possible rising inflation you don’t want to be in cash, at least not for the long term.

One of those places could be Myanmar, just maybe.   The stock market is almost non existent with just a few companies listed on the Yangon stock exchange and little background information.  There are still high political risks with a remaining military influence, there are ethnical problems (Rohingya conflict), investments remain low, etc.  But since the country is more open for tourism and foreign investments while it is located between richer and more developed countries, everything could change very quickly the coming years.  Also Thailand could benefit economically from an awakening neighbour like Myanmar, but Thai stocks have maybe gone a little bit too fast the last year like the iShares MSCI Thailand shows.  I think it’s not the right time for that.

There is no Myanmar ETF as far as I know, and maybe it’s just a little bit too early but it is certainly worth to keep an eye on.

 

Initial setup of a virtual portfolio

A lot of people will tell you to buy or sell stocks because this or that will make them skyrocket.  When they tell you to buy and later the stock goes belly up, you don’t hear them anymore.

In fact, it is exactly what commercial financial sites do all the time.  They talk about 10 stocks you should buy and after 6 months or a year they are screaming about the gigantic profits you would have made with one of those stocks, devoting long articles about how they saw this coming with a complex analysis.  They will remain silent about the 9 others stocks they advised you.

That is why I added a virtual portfolio of stocks I believe in today.  A test, a game, call it whatever you want. Anyway, I won’t be able to lie about the performance.  This is it.

Currently, this means a lot of gold and commodities, and some cash.

Have a look at the S&P or Nasdaq chart over 30 years and you don’t have to be a technical genius to see this bull market in stocks is coming to an end some day.  Maybe this year, maybe in 2 years or maybe it can last as long as 14 years as Jeff Staut was saying this week?

I believe there may be one last run higher this year, but when the shit hits the fan it will probably be the most horrible crash ever seen, faster then ever before.  Not yet however: the economy is still in good shape, rates are going up but very slowly and a rising inflation is on the horizon.

The recent correction in the market felt for the happy ones like the electricity at the party was accidentally cut off but was restored quickly. Oh, it was nothing, let’s party on!  Hmmm, if this party continues for years I will lose, but I don’t believe it can continu for years and even if it does having one more look at that 30-year chart you can probably buy stocks in the future at a much lower price even if you have to wait 5 years from now.  I don’t want to be in the next crash, I can wait.