For one young investor, riding the green rush hasn’t exactly gone as expected.
“Performance-wise, it’s been crazy,” Shayan Tabaei, a 24-year-old software developer who lives in Richmond Hill, Ont., said in a phone interview with BNN Bloomberg.
Tabaei, an active participant in the popular “Weed Stocks” discussion forum on social news network Reddit, started investing in stocks for the first time in February. He has held pot stocks almost exclusively, with the exception of a recent position he took in a technology company.
This guy started "investing" six months ago.
“I went from being 25 per cent under overall in my portfolio to being 30 per cent up. Now I’m six per cent up,” he added. “I’ve never cashed out any big amounts. The lesson learned to me is to take profits as they come.”
That's not investing. That's short-term speculative trading. Seriously, the legalization date is October 17. The BIG revenue hasn't even hit the books and this guy wants to take profits.
“This is like the second coming of [the end of] prohibition,” Tabaei said. “The industry is new … When a bunch of the big tech companies were new, all of a sudden they just blew up out of nowhere. So I always had the mindset that the same thing was going to happen for pot stocks.”
That's true. The problem is that the spectacular rise started a couple of years ago. Canopy Growth Corporation, the largest marijuana company on Earth, had a stock price around $3 in 2016. It hit $44 in January this year. Today, it closed at $58.62. What's funny is that many new "investors" don't want to touch it because it's so expensive. Instead they jump into no-name, no-license, no-future penny stocks "thinking" that it'll be easy for their exciting "investment" to double or triple in a few weeks.
There will be a lot of tears when this bubble eventually bursts.