If you’re interested in buying cannabis stocks you’re no longer part of a minority group. Far from it. The masses are now involved thanks to Tilray’s stock trading in a $186 range last week (Low $114 to high $300).
At its peak valuation of $20B, Tilray was worth more than companies such as Chipotle and Nasdaq trading at 1000x its $20M in revenue last year.
On Wednesday (9-19-18), “Tilray Stock” came in at number two on google searches with over 200,000 queries.
The search query, “Cannabis Stocks” spiked to a 100 last week on google trends (100 being the highest ranking topic in comparison to all other searches).
Remember Bitcoin back in December/January? We all know what happened shortly thereafter.
Like most things investing related the future is unknown.
So, I like to ask, what do we know?
It’s clear from the above chart that we are in the later innings of this ball game. However, the cannabis industry is real and will only grow as global acceptance increases and the stigma of smoking or using cannabis fades even more.
There are still many unknowns moving towards legalization in Canada and as the industry matures, it will become more obvious what investor’s can expect in returns moving forward.
For now, this is a momentum and news driven market that favors those who can stomach volatility and have the experience to take advantage of the shorter term opportunities.
Buying the cannabis stock “du jour” without a proper plan in place is sure to have a bad ending.
For the patient long term investor, I believe there will be plenty of time to invest in the industry. As the volatility around news events continues, it will provide opportunities to enter the most financially sound and well run companies at decent prices.
Investor/Trader & Owner at Rieben Financial.
Greg has been successfully trading and investing his own capital in the equity, option and futures markets for over 15 years.
He is a trend-trader and his MegaTrends List (which is updated weekly) is focused on finding stocks that have the potential to move 25%, 50% or 100% plus within 2 to 12 months. You can use his list for swing trading ideas as well as finding great long term investments.
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