posted on 16 January 2017
by Doomstead Diner
-- this post authored by Eddie
Discuss this article at the Marathon Man Newz Table inside the Diner
A few take-aways for anyone considering buying into pot stocks. These are the things you won't read anywhere else.
1. All twenty stocks in the Potfolio, every one of them, is trading at a new, higher level than last summer, before the sector got so hot in the couple of months leading up to the election. Not even the sketchiest companies have fallen back anywhere near their previous levels. This is different action from the past (like 2014, when there was a huge run-up that subsequently fizzled completely). To me, this signifies that pot stocks are in a new, real bull market. I am down on some stocks I bought near the pre-election highs, but I am calling those timing mistakes. Bull markets always correct timing mistakes.
2.Looking at momentum, and looking at charts in general, I cannot see much difference between the action in the most profitable stocks in the Potfolio, with the best fundamentals, and those that have problems, fundamentally speaking. A couple of stocks with good fundamentals are doing very well, but those with fundamentals that stink don't look bad from a price action standpoint either. Not looking at a one year chart.
Not really at a new higher level, not like the rest, but doing okay.Look at the volume spike.
3.Half the Potfolio stocks have reasonable fundamentals, considering the nature of this market. Half do not. Of the ones that do have good fundies (sales, earning, good financials, low float) there is a wide range. I rated them all on fundamentals, from +++ to - . I'll publish those results, but you can look for yourself too. Here's MJNA, for example. This is the site I'm using to evaluate them. MJNA gets a ++ by my rough estimate, in spite of a huge float.
4. Here's my own personal quick and dirty assessment of fundamentals of the 20 stocks now held by yours truly in the Potfolio. The symbols I use here are the ones Ameritrade uses. On the Canadian exchanges the ticker symbols are different, fwiw.
*Once again, these are off-the-cuff, rough estimates. Many people consider Canopy Growth to be the best pot stock of all, but I had to rate Aphria higher on fundamentals, as of last weekend, when I ran the numbers here.
5 .Canadian pot stocks are a safer buy than American companies, due to the legal issues still hanging around due to stupid bureaucratic bungling by our government. Also, the fundamentals of Canadian pot stocks, on the whole, are better. The strongest four stocks are all Canadian. I don't think that means you should write off American companies, but the crystal ball is cloudy for them, at the moment. I noticed one MSM article yesterday that had all kinds of negative headlines about the medical use of pot, and possible negative effects, like causing schizophrenia. If you read the whole article, you learned that the headlines were mostly bullshit. Still, we see this stuff, and I think it's part of a still-powerful anti-pot lobby that is able to persuade media to smear the industry. Who would do such a thing? (I mean, besides the private prison owners, the DEA, the FBI, and the billionaires that profit off alcohol sales (Sheldon Adelson)).
6. We live in troubled times, and there is about 100% odds of a major stock market correction on the horizon.This will drive down all stock prices, and could temporarily decimate pot stocks just like everything else. If that happens, it's a gift from God. I'll be adding to the better performers. Pot is not going away. I view it as the best contrarian play in recent history.
7. So as not to appear to be baiting anyone to follow some link to a pay site, I'll list the four best Canadian stocks in the Potfolio (my opinion). I'll also add a fifth, which might arguably be on the list. They are in order of best first (overall, not just fundies): TWMJF, APHQF,OGRMF, MQTRF, and ACBFF. My rating is based on fundamentals and recent price action. Of these five, since November 2016, TWMJF has outperformed the rest handily, as far as gains.
8. Of the American companies, the best overall stocks in the Potfolio are, in order: MJNA, MNTR, and MSRT. Of these, MJNA is off-the-charts ahead in gains. It might be worth mentioning that MNTR and MSRT are not actually pot growing companies. MNTR is a financial company that specializes in raising capital for pot companies, and MSRT is a social media platform for people interested in buying and discussing pot. Many of the American pot growing companies that came highly recommended are underwater (for me) at the moment.
9. Just to cover a couple of possible questions you might have, let me say that all the selections in the Potfolio were made by me, and I deliberately avoided a few highly rated stocks. I don't like breathalyzers, so I won't buy stocks of companies looking to sell them, and I avoid pot stocks that might be considered high-flying biotechs, ones that have already shot up to $50/share and beyond. I also didn't buy ECIG because it has a dismal looking chart. FYI.
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