Speaking of noise, the cannabis group is down this week after an extended rally. Conditions here resemble the overall market, with no news and steep short-term declines.
Aurora Cannabis Inc. (NASDAQ:ACB) and Canopy Growth Corp (NASDAQ:CGC) have retraced 11% this week. Tilray Inc. (NASDAQ:TLRY) is down 14%.
Is it the end of the world for these stocks and for the cannabis group as a whole? Get real. This is only a transient lull in what remains a serious bull run.
Admittedly, ACB has given up a lot of its gains and CGC is actually down so far this year now. But TLRY has doubled, as have smaller names like CannTrust Holding (OTC:CNTTQ) and OrganiGram Holdings Inc. (NASDAQ:OGI).
My proprietary index is still up 38% year to date (YTD), roughly triple what the S&P 500 has been able to deliver… and, tellingly, roughly where it was a few weeks ago.
Two steps up, one step down. That’s how the market moves. It is what separates real-world investment performance from a truly random walk.
If you were in these stocks at the end of 2020, you’re still cheering. And if you missed that rally, this correction is a chance to get a good seat for the next move to the upside.