Pot (cannabis) stocks silver stackers

These go in spurts. I think these stocks were all the rage about 3 or 4 years ago (search for price history on CANN and PHOT etc etc etc). They all flew up for a month or two on hype and day traders capitalizing on greater fool theory, then they fizzled out even faster due to no real earnings or underlying assets. The SEC halted trading on a few of them. The graphs all look sorta like BitCoin will: a few people made some money, and most lost it all.

GWPH (G&W pharma) is the only one that I know of which survived and did steadily ok (many regular S&P stocks did better… and paid dividends), and their balance sheets are on very sketchy ground for their valuations.

Their P/E ratio being "N/A" should be your first clue that they’re priced more ideas and sentiment and possibility than any actual profits.

…IMO, these are very risky and best left to day traders or other "get rich quick" types. You might see a blip rise in cannibus-related stock prices when a new state legalizes or something in the news is viewed as positive, but it will be hard to time it and based much more on hype than any real substance. Chances are that if there ever becomes a substantial profitable market for medical marij, then one of the regular tobacco or food farming outlets will control it (Phillip Morris, RJ Reynolds, Kraft, etc etc) via engineering a mass production system or buyout of one. Unfortunately, even in that "best case scenario," you don’t make too much when you hold the shared of the small companies that get bought out. The big companies aren’t stupid, and they won’t typically overpay for the buyout.

When it comes to risky stuff like this, there is the only saying from Peter Lynch: "You don’t lose anything by not owning a stock." I would say that applies well here. It doesn’t matter if your brother bought Tesla for $25 or your neighbor got BTC for $100. Yes, everyone hates missing potential gains, but back in reality, you haven’t lost anything by not rolling the dice on those huge question mark picks. There are many, many much better fundamental values in the paper markets which have real earnings and assets… and they often even pay dividends.

Besides, if any of these cannabis companies take off and are clearly becoming profitable, then they will still be a good investment at that time also. Almost anything that is a good investment today will surely be a good investment a year from now also, so you can sidestep the hype and mitigate your risk by simply waiting until the picture becomes more clear. GL

…it is a fool’s errand, though. The big tobacco companies will just buy the good ones and out-compete the weaker ones. The tobacco giant stocks are always "unclean" stocks since tobacco is not exactly healthy, but money is money… they are good buys since they pay nice dividends and will ultimately reap the best of any recreational or medical marij market growth.

Even the decent Canadian marij companies have waaaay too many shares outstanding since they just buy things by creating more and more shares. I have a few hundred shares of ACB (one of the biggest, with decent fundamentals) that I picked up last summer before they went from Toronto exchange onto the US exchange, and it did not spike as well as I hoped. It, like any of them, also pays zero dividend, so the only way I’ve made anything from it is by selling options every month to fools who think the stock is going to skyrocket up. That is unlikely at best with now nearly a billion shares outstanding, lol. It usually goes up a bit here and there just enough to excite people, but it is generally down or stays flat since new companies keep coming in and they all keep adding more shares. I think I bought ACB around $7 USD and it went higher yet is now around $5 or something. People keep buying my options every month thinking it will go to $10 or even higher, though. I can’t complain. Lol