Commodities and Gold

The Medicinal Edge

It’s been a long and somber year for cannabis investors. The recreational market simply hasn’t grown as anyone hoped, raising serious questions about stocks that depended on rapid expansion to support their multiples.

The losses have been staggering. Aurora Cannabis Inc. (NYSE:ACB) is down 85% over the past year, and rival would-be giant Tilray Corp. (NASDAQ:TLRY) is down 74%.

Only well-capitalized market leader Canopy Growth Corp. (NYSE:CGC) has resisted the worst of the selling, but even that stock has lost nearly 60% of its market capitalization over the past year.

Once again, if you’re looking for a more defensive way to get exposure to the industry’s long-term potential, Aphria Inc. (NYSE:APHA) is only down 33% over the period. Shareholders haven’t cheered, but they’ve preserved a lot more of their capital for the future.

When the industry recovers, APHA will lead the way. Unless you know the business and have nerves of steel, that’s where I’d stay for the time being.

But there’s a silver lining for the rest of us here. The S&P 500 is up 10% over the same time period.

That’s a good number. Despite all the chaos in the market and a recession underway, the stock market continues on the same long-term trend it has followed for generations.

Pot stocks can come and go, but Wall Street is doing fine.

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Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. The Financial Times describes Ms. Kramer as “A one-woman financial investment powerhouse” and The Economist distinguishes her as “one of the best-known investors in America”. Ms. Kramer is often quoted in publications such as the Wall Street Journal, New York Post, Bloomberg, and Reuters. She is a frequent guest commentator on CNBC, CBS, Fox News and Bloomberg, providing investment insight and economic analysis. Ms. Kramer was an analyst and investment banker at Morgan Stanley and Lehman Brothers. Ms. Kramer founded and ran a long-short hedge fund and has been chief investment officer overseeing debt and equity portfolios. Since 2010, Ms. Kramer’s financial publications have provided stock analysis and investment advice to her subscribers. Her products include GameChangers, Value Authority, High Octane Trader, Triple-Digit Trader, 2-Day Trader, IPO Edge and Inner Circle. Ms. Kramer, a Certified Fraud Examiner, has also testified as an expert in investment suitability, risk management, compliance, executive compensation, and corporate governance. Ms. Kramer received her MBA from the Wharton School at the University of Pennsylvania and her BA with honors from Wellesley College. Ms. Kramer has provided testimony regarding investment policy to the U.S. Senate and is a frequent speaker on the markets, portfolio management and securities fraud and compliance. Ms. Kramer is also the author of “Ahead of the Curve” (Simon & Schuster 2007) and “The Little Book of Big Profits from Small Stocks” (Wiley 2012).