2 Cannabis Investing Strategies for 2020 & Beyond
- Scandals, poor earnings and the vaping crisis have crushed cannabis stocks this year.
- We all know a bottom is coming — but risk-averse investors are scared to buy in the meantime.
- Charles Mizrahi identified a little-known play on the cannabis industry — with far less risk.
Cannabis stocks started the year strong. By February, the ETFMG Alternative Harvest fund (NYSE: MJ), which holds most of the big names, was up 53% from its December lows.
But the sector’s been in a downtrend since the spring.
The chart below shows three major cannabis producers’ stocks: Cronos Group Inc., Aurora Cannabis Inc. and Aphria Inc.
As you can see, all three are below their prices at the start of the year.
And the hits for producers keep coming:
- Scandals (see CannTrust, Curaleaf — and Sundial Growers’ just-announced class-action lawsuit for misleading investors).
- Poor earnings (see Canopy Growth and Aurora).
- The vaping crisis (see every cannabis stock — even the ones that have no exposure to vaping whatsoever, such as GW Pharmaceuticals).
Clearly, we’re headed for a bottom in cannabis stocks.
The problem is that no one knows quite where it will be.
So today, I want to highlight two strategies for you.
Strategy No. 1: High Risk, High Reward
I know some of you are high-risk, high-reward traders. You may see the opportunity here.
Jim M. wrote to Anthony Planas in response to his article on the vaping crisis last week:
I really like your view on the market and your weekly cannabis reports. I currently own MEDIF, OGI, HEXO and a real gamble: CBIS. I am currently down on all 4 investments. Thanks to your and other Banyan Hill gurus’ research, I believe this is a temporary problem. I think the Senate will also approve the banking bill. With Canada coming online with drinks and edibles the future should be bright! Being the gambler that I am, I doubled down on MEDIF, HEXO and OGI. Thanks for all your input!
Jim, thanks for writing to us!
Keep us posted on those trades. Although Anthony doesn’t advise doubling down on positions only after they fall, he likes to buy stocks in chunks.
So, if you’ve been adding to your position a little at a time since you bought, you’re following Anthony’s style and averaging in.
Strategy No. 2: A Safer Cannabis Investment
If you’re not a gambler like Jim, you might be nervous about buying the cannabis sector right now.
Not to worry.
Alpha Investor Report Editor Charles Mizrahi found a way to play the rise in cannabis stocks with far less risk.
He believes in “indirect” cannabis plays — stocks that are set for enormous gains no matter which company becomes the leader in the marijuana market.
You see, Charles, a former Wall Street insider, knows about the opportunities most Main Street investors have little, if any, chance of hearing about.
And he thinks one little-known stock could deliver a 500% gain in the months ahead!
To learn about Charles’ risk-free offer, click here now.
Check out 3 YouTube Videos!
We have more great content to share this week!
- Anthony Planas’ latest episode of Marijuana Markets: A POTcast: “Vaping Update, Cancelled Deals and Mexico to Legalize Marijuana.”
- Automatic Profits Alert Editor (and Chartered Market Technician) Chad Shoop: “Buy These 3 Retail Stocks Before the 2019 Holidays.”
- Alpha Investor Report Editor Charles Mizrahi: “Why You Should Avoid Wall Street’s Cannabis Hype.”
Remember: We love hearing from you.
Are you, like Jim, buying pot stocks on the dip?
Did you take profits on your cannabis holdings?
Do you have a cannabis investing strategy that you think is going to pay off?
Or are you sitting this one out because of the volatility?
Senior Managing Editor, Winning Investor Daily
Check out the articles below if you missed any of our experts’ advice this week.
The stock market hates the junior mining sector right now. Conservative investors think these tiny stocks are too risky — even with growth opportunities not too far ahead. Matt Badiali discusses his prediction for this hated sector. (3-minute read)
The holiday season starts the week of Thanksgiving. But many people don’t realize that retail stocks rise from October until the end of the year. Chad Shoop examines the past 10 years of this trend. He shares three stocks you can capitalize on while they rally. (4-minute read)
China consumes half the world’s pork. The African swine fever virus is threatening Chinese pork production, and fear of low supply is driving prices higher. John’s Chart of the Week shows a seasonal cycle on pork’s price movement. He suggests one stock to dump now — or, if you’re an options trader, there’s a way to profit from its decline. (3-minute read)
The U.S. stocks up on natural gas during the summer to ensure there’s enough supply for the winter. Unexpected events such as an extended winter or a polar blast could strain this resource. Anthony Planas discusses the setup he sees on the play on natural gas, and he shares how you can grab short-term gains. (4-minute read)
Wall Street creates hype around new sectors. People get excited and buy shares. That bubble bursts once the hype is over. Former Wall Street insider Charles Mizrahi shares his insight on the stock market’s hype around pot stocks. He discusses the recent cannabis bubble and shares how you can make money without investing in risky marijuana stocks. (7-minute video)