Cannabis Corner: Sustainable Gains

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street.

Volatility is both the delight and the curse of cannabis investing. When these stocks soar, shareholders feel more than a little giddy, but the retreats can be scary enough to make you check your nerve.

The last few months have given us both sides of that rollercoaster. Six weeks ago, stocks like Aurora Cannabis Inc. (NYSE:ACB) and Canopy Growth Corp (NYSE:CGC) were suffering and oversold.

Then the bulls came back in force. And now, once again, my proprietary cannabis index is up a healthy 5% this week.

This time, the gains don’t feel exaggerated. This might be only the middle of this particular upswing, which is probably a good moment to weigh your nerve against your attraction to the cannabis theme.

Are you here for a quick buzz and a long hangover? If so, this is a great entry point.

But if you’re here for the long haul, there really is no better time than now to add to an existing position or start a new one.

My suggestion: go small and hold on. Don’t let the market moods shake your conviction or shock you into selling before you’ve at least doubled your money.

Three of the names on my cannabis screen are in that zone right now. The group as a whole is up 44% so far this year. And across the short-term swings in both directions, I think they’re just getting started.

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