Earnings

CANNABIS CORNER: Riding The Big Bounce

It is gratifying to see that cannabis stocks remain open to both extremes of ambient market volatility. When the mood swings against them, they crumple. We’ve seen a lot of that in recent months.

But when sentiment becomes more expansive, these stocks shine. That was the case this week, with my proprietary cannabis index surging 5%, while the broad market stalled.

Of course, there are relative winners and losers in any week. Canopy Growth Corp. (NASDAQ:CGC) is actually down nearly 2% since last Friday.

However, CGC has emerged as one of the weakest stocks in the group. It is one of the largest and a lot of traders simply believe that it’s “boring.”

Boredom is not why people invest in cannabis, so it’s not surprising to see CGC up only 9% year to date (YTD), trailing just about everything else in the industry.

OrganiGram Holdings Inc. (NASDAQ:OGI), CannTrust Holdings (OTC:CNTTQ), Aphria Corp. (NASDAQ:APHA) and Tilray Corp. (NASDAQ:TLRY) all have at least doubled in the last four months.

That’s the opposite of boredom. And it’s why I prefer a balanced approach to any volatile theme.

Pick the right industry and there will be huge winners to capture. There also will be a lot of dead money along the way.

You want to make sure you have the winners in your portfolio. Otherwise, you miss all the fun.

I take a portfolio-focused approach to IPO Edge, where cannabis is only a small piece of a unified buy list. We’re like a venture capital fund in that way, confident that triple-digit-percentage wins will more than compensate for a few missed swings along the way.

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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).