Just do the opposite of Warren Buffett
Weed stocks are taking pretty big hit right now, and the reality that this may not be a get rich quick scheme is sinking in for some retail investors.
Many newer retail investors came into the space after the first big rushes of 2015-2017 and are now wondering what’s going on. Much like the crypto boom, these types of sectors sometimes invite the impatient, #YOLO players who want big returns ASAP. For many who don’t have a great credit rating, or investing knowledge, cannabis stocks have acted as an alternative to options trading.
Weed stock investors have said ‘fuck traditions’ and have gone the alternate route, the anti Warren Buffett approach. The notion of ‘buy when there’s panic in the streets’ does not resonate well with many in the space. It’s much better in the weed stocks world to buy low, and sell lower.
Or, just ask for a refund like this seasoned trader.
Gambling vs. investing
One difference between gambling and investing is in investing the money isn’t actually gone until you sell. The opposite is true in gambling whereit’s smart to take your cards off the table and walk away when things aren’t going well. Markets generally do come back, and if we look at the macro cannabis chart over the past 3 years there have been some pretty epic dips, followed by some huge upside swings.
A redditor on r/weedstocks summed it up best this morning by saying:
Panic selling is typically driven by fear that the market for a particular industry, or in general, willdecline, causing additional losses. Panic selling however, can have the effect of flooding the market with securities that are being sold at lower and lower prices, thereby driving the price down and causing more selling. Most market crashes have been caused by panic selling.
Most securities exchanges have instituted safeguards against panic selling, limiting automatic trades which may increase panic selling once it starts and even suspending market trading altogether when declines reach a certain point. The intention is to provide information that can be digested and considered by investors and to give the opportunity for the panic selling to subside.
Canopy (WEED.T) has taken a serious beating the last 6 months: