Lessons learned from a reader who did it himself
Question: “Hi Ted. I’m the person who wrote to you a while ago about Canopy Growth. I have been in it since the spring of 2014. I bought 1,000 shares at $3.45 and another 500 later at $10.00 per share. Then this spring when you wrote to the effect that “If I could only own one cannabis stock, it would be Canopy” I bought more in my Tax Free Savings Account [a tax efficient way for Canadians to save – editor]. When I saw the questions and comments from other readers lately, I thought it would help if I shared some of my personal experiences.
After I first bought Canopy Growth, it didn’t rise above my purchase price for three years. Three years for heaven’s sake! As I write to you tonight, if I took everything off the table and put it back under my mattress, I would have $123,000! This means I know and appreciate the value of patience in these things, Ted, just like you are always reminding everyone in the newsletter.
As I read what people are asking about, I conclude they don’t appreciate what you are saying every week about Sunniva, Lexaria and Khiron which are three other stocks I own in addition to Canopy. I think your message is “get in there cheap.” Since the spring, that is what I have been doing with these three stocks. I have added a little here and there too. For me Khiron is just getting above my cost and Sunniva and Lexaria are still under water. That is what I mean by missing the point. One day the market will wake up and say, “Holy smoke! Khiron is in South America? When did that happen?” And that’s when I’ll say, “Here you can buy mine that I paid $1.11 per share now that it’s way up in price.”
I enjoy reading your content because it is more than just an opinion. I think you have forgotten more than 99% of others would ever hope to know about this rapidly growing and exciting cannabis business. I am concerned people’s obsession with instant profit could result in them missing out.
A really good example is the dreadful price movement on Sunniva. But as far as I recall, you said way back in the spring that nothing alarming has happened against it. They maybe had some tough decisions/delay getting the US campus done and wasting all that time with the misfire on getting the land for the BC greenhouse? Plus they aren't producing a harvest just yet. But many people are impatient. They bought last week, last month or in the spring and they aren’t making money yet. They are looking for validation.
My advice is to be patient. Remember my Canopy Growth? First three years below my purchase price? $123,000 today? If Ohashi finds something amiss in what he suggested, he will report it. He has called companies and managements out in the past.
One of the more useful articles he wrote, in my opinion, was on market phases. Distinguishing between the “buy as much as you can afford and hang on” phase compared to the “don’t be afraid to take some profit” phase that we are in now. As we go through this phase we should end up with fewer stocks of higher quality. So I am now in the process of culling a bit. In these super-heated days leading up to legalization, my “keepers” are Canopy Growth, Khiron, Lexaria and Sunniva and my “spec” position is the Horizons Marijuana Life Sciences Index Exchange Traded Fund. I was also toying with the idea of selling some $100 covered calls against my position in Canopy Growth. If I get taken out, I get $100 a share for my stock plus the premium. What’s the matter with that?
In a nutshell, here is what I have learned from reading Let’s Toke Business for almost a year…go slow, stay calm and ignore the people chirping Johnny-one-note stuff that only offers an opinion and not all the lessons Let’s Toke Business offers. I’m reading and listening real closely! It’s certainly an interesting period for sure! Cheers.
JAH, Ontario, Canada
Answer: Much of the recent strength in Khiron stock came after JAH’s first email which prompted him to send a second one. “Well, well, well, Ted! I remarked to you recently how KHRN seemed to be waking up of late. You had recommended it months ago because it was the first company licensed in Colombia. I told you how I taken your advice and loaded up with their shares. KHRN was also a little slow getting out of the gate and when I first wrote you it was barely above my purchase price. Now it is in a nice profit position. Cheers
This is truly an odd Q&A because JAH didn’t ask a question. But we urge you to study the article carefully because there are excellent lessons to be learned from a reader who has done it himself. So if you own Sunniva or Lexaria (in fairness, I first recommended LXX when it was around $.25 per share), be patient. Hang on. It will be worth your while.