Are you a Marijuana Bag Holder?

Just a short post documenting my most recent foray into the weed space. I have mentioned on a lot of previous posts NOT to get into any weed stocks. That has changed like all contrarians and speculators would attest to.

This is not for retirement money but for gambling money if you have any and can afford to lose it, That's why I call myself the stock market speculator.

The whole sector is oversold. Which ones to pick.

You can just buy the HMMJ ETF if you want but I would rather try and pick individual companies I think are way overdone.

I added to my position in TGOD and initiated a new position in HEXO.

I now have $10K invested in the weed space. Was today a good day to buy? HEXO went up and TGOD went down. Kinda like my PF most days and I believe just about anytime I decide to buy a stock. Get used to it, stocks go up and then down even on days you jump in.

I have mentioned before about buying in the valleys and not when stocks have reached the top of the mountain. I believe these weed stocks are in a pretty wide valley right now and I'm hoping they don't go to hell.

If they dive 20% from my buy price I'll sell. I have no desire to become a bag holder. Take a loss if necessary and move on.

HEXO

The stock closed up on the day at $2.93 on above average volume. It has a 52 week high of $11.29. That is a great upside potential right there and what I look for in a speculative gamble.

I also like the fact it has a joint venture with Molson Coors to provide cannabis infused beverages.

TGOD

I have jumped in and out of TGOD a few times. If it doesn't get moving soon I will sell at a loss for the first time since owning it to preserve capital. Tomorrow will be a big day in that direction. I have no desire to be a TGOD bag holder. Lots of pumpers out there and specs waiting to dump shares after a slight rise in prices. Tax loss selling is a great time to buy. I like November for that.

TGOD has been as high as $5.81 in the last year. Today it closed @ $0.89

It looks to be finding a bottom between 60-90 cents.

It was down today on heavy volume. This is a pure gamble and it remains to be seen what the demand for organic cannabis products will be. Lots of vegetarians out there who don't buy organic fruits and vegetables. So there's that.

Ontario needs to open more stores where the majority of the population lives.

Lastly these companies need to prove they can make money. Lots will disappear if they don't. I'll be watching closely.

What weed stocks do you like and own if any?

What I Bought and What I Sold This Week

Just a short post on some trades I made during the past week. Some I booked profits and some I checked out early taking a small loss.

Sells

RZZ, KL, NVO, WDO, FR, CNL, FVI, GSV

So all of these are gold and silver stocks. Mistake? Maybe but I booked some nice 30% + profits on a lot of these positions and some like KL and WDO are near the top. NVO could be a mistake as they are announcing nice results from recent samples.

I don't buy and sell on that kind of information anyway. I'm only concerned with volume and the stocks position to it's 52 week high/low.

I want to buy it low and when it gets high, I sell. I have no interest holding long term and look for more lower priced stocks. A lot of the time the stocks go lower which forces me to take losses early and I do.

Buys

WCP, TGOD, TOG, POE

Oil stocks have been beaten to shit. There are so many to choose from, so I picked a couple that seem solid companies with potential to explode higher. They also pay dividends of over 8% if you want to buy and hold them.

POE is a different story. The stock continues to run higher even in these trying times for oil stocks in Canada.

My Thoughts on The Week

You would think that gold would be exploding higher in these uncertain times. So it's all bullshit what you hear on the news about all the fear happening in the world.

Brexit, Wexit, Impeachment, Trade Wars, North Korea, Ukraine, Russia and upcoming elections. People are worried. I'm just worried about trying to make some money trading stocks.

I look in the valley for opportunities and sell at the top of the mountains where the avalanche starts.

You should have sold TGOD when it got to $10 bucks. Did you? NO, most people think it's going to $20.

I initially sold mine for a 30% profit and recently bought back in at 90 cents. Could it go lower? Oh sure. I will look to buy more on Monday if it opens lower.

Oil, oil service, lumber and Weed stocks are all wallowing in the valley. This is where the opportunities lie. Why is that? You decide but once they stop falling people will start buying them back.

What I Like

Looking at WEF, EFR, ACB and TCW. Buying more of ATE an experimental health/bio tech company. I have a small position currently in the green. I may add more to my position.

EFR a uranium stock should run hot if the uranium industry gets a boost from the current administration. This is what speculating is all about.

STOP listening to experts. They know nothing and work for bonuses using investor money not their own.

They would never tell you to buy a lumber stock or an oil field services stock. They would say it's done, no interest and no money.

This turns around and money comes back. This is where contrarians make their bones. Going in where others won't and don't.

Start small and only a few stocks. I have too many right now. Need to trim in the coming weeks

What I own ATM

ATE, ATH, ASM, BTE, BDI, BTR, GPR, GUY, TGOD, TOG, POE, WCP and YGR.

I like buying stocks nobody wants to own. How about you? This is PURE GAMBLING! DO NOT try this unless you are prepared to lose everything.

Investing in an Unstable World

There's always something going on somewhere around the world causing investors a tremendous amount of stress and anxiety.

It's how you respond to it that matters or should you and do you? Most of it is all noise and should just be ignored when it comes to investing in the stock market.

If you are mostly an income investor like myself, all that matters is growing that yearly cash flow and keeping up with inflation. All those other world events are meaningless to your investment portfolio.

Recession Fears

If you are a student of the nightly dribble spewed out by BNN then you worry a lot. Turn it off and relax. That shit will just put you in a cold sweat and make you do something stupid and sell good companies you own. One day a recession is imminent and the next all bets are off.

Remember why you bought them and what for.

Here's a more recent example to just ignore day to day stock market news.

In December 2018 the S&P 500 recorded their worst performance since 1931 and plunged 20% on Christmas Eve. Did you panic like a Leaf fan and decide to get out and sell everything because the sky is falling?

Too bad if you did because on December 26th, the very next session the Dow jumped up 1,000 points. It's biggest one day point gain in history.

The Toronto market is up 19% since the beginning of 2019 after financial gurus recommend you go to cash. Hmmmm!

You would have missed it had you bailed.

Trade wars, recession fears, interest rates, Hong Kong, North Korea, election fever and on and on it goes. Try to tune it all out and go work on your exercise plan. That is time better spent than in front of the TV shaking about Brexit, Wexit, Putin or China.

Markets go up 70% of the time so hang in there, always!

Investors embrace fear much to easily and are talked out of their strategy just as easy. If this is you maybe hand your money over to a professional because you're too emotional.

Of course the markets will go down, people will borrow more money than they can afford to pay back and there will always be volatility in financial markets. It's what you do about it that matters.

Stay out of the bank and don't move everything to cash and don't buy crypto or weed stocks, then you should be fine.

It's NOT different this time.

Stay invested and for me it's equities and dividend paying growth stocks.

Just because markets are high is NO reason to sell.

Don't buy GICs, savings accounts (HISA), bonds, prefered shares, funds or ETFs.

...and

for the love of god don't by seg funds and their life sucking high management fees. 

Only sell anything if you need the money. If you don't, enjoy the cash flow and stick around for the long term and just ride out the ups and downs. 

That's investing!

What Investing Advice do you Give Others?

First of all I only pass on what I've learned to others when they ask me. It doesn't happen too often. I never preach to anyone ever.

Most people never talk about money or are interested in sharing their inner most money woes.

They just buy what the bank is selling or keep their money in brain dead GICs or savings accounts.

One thing I've never bought is a GIC.

You will find they like to buy mutual funds, ETFs and bond funds and their pref share proxies. Why?

Easy is why. They have been sold a product and not really went out and bought anything. That's a big difference. Knowing exactly what you're buying is the most important aspect of investing money.

I have a lot of friends who just own bank mutual funds. They bank there so they are repeat customers for all kinds of other products. They would never think to buy the bank's stock. That's what I do.

I bank at Scotiabank and use Scotia iTrade to buy stocks.

That is the first thing I recommend, open an investing account where you bank and once opened, buy shares in the bank itself. Why not? If you have faith enough to bank there, you might as well own a piece of the business.

Don't Buy the Canadian Market

Too many resource and oil companies making it full of bad companies you don't want to own. I stick to banks, utilities, telecomms, pipelines and rail stocks. Strip away your holdings to just these areas and you have the best part of the Canadian market.

Ya but it's easier to just buy a fund or an ETF so I get everything right?

True but you pay an ongoing fee for that privilege. Why pay anyone anything at anytime? You just pay a small trading fee to buy your bank stock and then sit back and do nothing. You're invested.

That's all I do.

Stick to quality established dividend growth companies. They all pay you money on a monthly or quarterly basis to own them. NOT the other way around. I find comfort in knowing that no company is slowly bleeding away my retirement account with management fees.

Buy What You Use Every Day

It's not a new concept but it's a nice place to start.

If you get bored with just banks and utilities start looking around where you spend money and what you spend it on and make a list of those businesses to study for a possible investment.

What's good for me is not necessarily good for you. 

I call this the retail investor's hedging strategy. You invest where you spend your money.

Do you line up at Tim Horton's or McDonald's for your daily coffee fix? Why not buy QSR or MCD stock? Will they go out of business?

Do you shop at Dollarama, WalMart or get lotto tickets at Circle K?

Good investments? Maybe, but do some homework and decide if you want to become an owner. I love this idea more than I would love buying an ETF or bonds.

Use a Visa or Mastercard to pay for purchases. Ever thought of buying shares in either company? Hmmm, could be good.

I shop a lot at Costco. I own Costco stock because I love the business and they make money.

Look at what the kids are using as another place for investment. Most have iphones, watch youtube and have Instagram and Facebook accounts.

Should you buy AAPL, FB and GOOG stock? I don't know but it seems like the place to be. At my stage in life I don't invest in growth stocks as I need the income, but these are great places to look to add money if you have a lot of time.

Do you use Nat Gas to heat your house? I pay Enbridge a monthly bill to deliver it to my furnace. Yes, I own shares in the company as a hedge to my yearly expenses. I love this concept.

Go through your house and define what day to day items you use the most and where you spend your money. Do some homework and make a buying decision based on these products.

What I Don't Do

Rebalance!

Warren Buffett doesn't believe in it and that's good enough for me. He buys good companies and rarely sells. They are hard to find so when you do why sell them? His partner Charlie Munger refers to the whole concept as twaddle.

Everything bank salespeople and advisors preach to you is twaddle. Learn to DIY, do it yourself.

Say NO to mutual funds, ETFs, bonds and preferred shares.

Say NO to anything described in MPT (Modern Portfolio Theory).

Don't buy the next big thing. Talking here like Pot stocks that don't pay dividends or make money.

Don't buy what you don't understand.

Don't sell your quality stocks. The safety is in the holding and NOT diversifying into bonds. 

Ignore asset allocation - more twaddle!

My Final Take

"receiving steady cash flow that grows over time is one of the best ways to build your wealth and stay calm during market downturns"
- John Heinzl, Globe and Mail.

The biggest enemy is YOU!

Don't get emotional and sell out too soon.

Go subscribe to dividendgrowth.ca and read Tom Connolly.

STOP consuming too much financial information and stick to your own plan. At least you have one.

Become an income investor, collect the dividends and buy when the markets are priced reasonably. Right now markets are at new highs. (expensive).

Keep focused on investing for INCOME GROWTH!

What advice do you give newbie investors?

Portfolio Update

It's been a couple months since I published an update on my trading activity and given you a portfolio update. As usual I will keep this short so here goes.

Current Holdings

ATE, ATH, ASM, BTE, BDI, BTR, CNL, FR, FVI, GSV, GPR, GUY, KL, NVO, POE, TOG, WDO and YGR.

I never invest more than $4K in any one position.

This is what I do with speculative money and NOT something I recommend for everyone. It is gut wrenching at times.

Only 8/18 positions are in the green. I was way too early making some of these bets. I will just ride it out until the spring and see what happens. I'm down 10% overall.

Stocks I've Sold Recently

In no particular order or timeframe they are;

ALO, ARG, ASM, BTE, CFW, CLIQ, CPG, EFR, ERF, GUY, LAC, LMC, MUX, NGD, NVA, PEY, TCW, TGOD and WEF.

Only 9/19 individual positions were sold at a profit but overall I'm in the green as profits realized outweighed losses incurred.

Only 2 stocks are currently higher than where I sold them telling me my timing on the sells was just about right. If the money is needed by all means go out and sell.

Instead of realizing a gain I would be down a further 18% if I hung on to these stocks.

I did trade in and out of ASM, BTE and GUY and decided to get back in. It was a mistake as they are all still down significantly.

There is no institutional interest in either pot or oil stocks here in Canada. Without it there is no upward momentum to trade these stocks and make money.

My gut feel told me this 2 months ago and so did the market but I thought they were good companies. Always look at the market and if there is enough upside momentum to make money on the stock.

Stocks like KL and WDO seem to be the gold standard inthe space right now. Once momentum improves these stocks should resume their upward trend. I am always looking to sell to lock in gains.

Retirement Stocks and Our Portfolios

Everything is just rocketing higher on a monthly basis. Dividends building slowly and I look to add to our current holdings always.

We own banks, utilities, pipelines and rails.

I don't rebalance or hold bonds, funds, ETFs or pref shares. 100% quality dividend paying growth stocks.

My wife's LIRA only contains;

BMO, BNS, CNR, CP, CU, EMA, ENB, FTS, RY, TRP and TD.

Just 11 stocks, that's it.

I do not believe in Modern Portfolio Theory and it's adherence to a 40% bond allocation in a so-called balanced portfolio.

The market is always correlated to the stock market. Bonds don't save you, quality companies will.

Our other portfolios mirror this LIRA. 

They continue to grow and pay dividends. I re-deploy money when it builds up into the account. Buy the biggest and the best.

I am looking to start positions in AQN, IPL and PPL when money becomes available.

Further Reading

Generating Capital Gains

Just a quick hit post and to give you an update of what has been going on in my trading PF lately. I'm in Kelowna on holiday right now so that's why the delay in posting anything of relevance.

Current Holdings

ALO, ATH, ASM, BTE, BDI, CPG, ERF, GPR, GUY, LAC, TCW and WEF

Up $1450 on paper

Realized Gains = $1902

Transactions

Bought WEF Sep 11 - Lumber stocks have been hammered. The cure for low prices is low prices. I bought 3000 sh @ $1.30. I'm up 2% on the trade. I like the stock here and nobody is buying it. Perfect.

Bought LAC Sep 4 - As with Lumber stocks lithium has been lagging. I like this stock as a longer play on the electric car market. The price has really come off so I picked up a small position. Buy them when they're cheap. I bought 1000 sh @ $4.20. Up 13.5% on the trade.

SOLD LMC Sep 4 - Booked profits on Leagold Mining of $1650 on 2000 shares. I bought LMC on 29 July for $2.00

Bought TCW Sep 4 - Energy service stocks also getting crushed all year so I was watching for volume picking up in this sector. You could have your pick. I bought 4000 sh @ 0.97. So far up 21%

Bought BDI on 4 Sep - Another play on a pick up in the energy sector. Camp stocks like BDI hopefully rebound here. Bought 2500 sh @ $1.72. Up 6% on the trade.

Bought ALO 3 SEP - Gold stock laggard 4000 sh @ 0.96. So far a bad pick up. Down 4.5%

Bought ASM 27 August - bought back in after selling for a great profit on ASM. 5000 shares @ 0.89.Down 9%.

Sold TGOD 27 August - booked a $170 profit on 1500 shares sold at $3.18. I'm completely out of the weed sector ATM. The falling hasn't stopped but some trading opps lie ahead in this beaten down sector. The easy money has been made.

Final Thoughts

I bought back into some gold and silver stocks a little too soon so I was wrong there. GUY on paper is my big loser down 20% and has lagged the whole sector. GPR has also been a disappointment.

Paper gains mean shit. It means I got the buy right but still haven't made any money.

All told I'm up $3,400 in this account if I sold everything right now.. I won't but the point is even when I'm wrong on a stock doesn't mean you lose on the overall trading portfolio.

On paper I'm up 40% on CPG. This is helping carry the day. Should I sell and book profits.? We're getting close because all the experts are recommending energy stocks. That's usually a good time to sell. I'll see Monday.

It's been stressful visiting family and holding a lot of commodity positions that need constant monitoring. It's like puppy training. You take your eyes off for a few minutes and there's shit on the carpet.

Copper stocks starting to look interesting along with pot. Always look in the valley for opportunities. Never buy at the top of the mountain.

Just what I'm doing and not what you should do. This is a strategy to generate capital gains and have some fun money.

Investing Basics - Nobody Knows Anything

TITLE: Nobody Knows Anything
AUTHOR NAME: Bob Moriarty
AUTHOR CREDENTIALS: Veteran, pilot, consultant and author
GENRE: Personal Investment Strategies
NUMBER OF PAGES: 134
PUBLICATION DATE: May 2016

SYNOPSIS/SUMMARY: From Amazon

"Has following “the crowd” with your investing lost you serious money? Learn the strategies best suited to get you more reliable results. Are you confused by the flood of contradictory advice from so-called experts? Have your past financial advisors cost you years’ worth of savings? Want to make sure your hard-earned dollars are put to the best use? 

Over 50,000 readers a day trust long-time investor Robert Moriarty to show them which tactics work… and which ones don’t. Now he’s here to show you how to avoid failure and find the pathway to profitable growth. 

Nobody Knows Anything: Investing Basics - Learn to Ignore the Experts, the Gurus and Other Fools is a straight-to-the-point handbook for any investor willing to question mass-market hype to find what actually works. 

Cutting to the chase, Moriarty’s contrarian insights explain how you can use your own knowledge and skills, however limited, to buck the trends and defy the popular professionals. Inside, you’ll learn why the crowds are almost always wrong, and how you can go against popular opinion to make a positive return. In Nobody Knows Anything, you’ll discover:- The biases and agendas that distort most investment decisions and how to dodge them- 

What contrarian investing really means and how to do it with precision- 

Ways to see past the buzzwords and guru messages to get the honest truth- 

Whether market manipulation is really an issue and what to do about it- Investing tools, techniques, anecdotes, and much, much more! 

Nobody Knows Anything is the book you need to expose expert advice and find long-term success in the financial market. If you like easy-to-follow steps, down-to-earth strategies, and going against the grain, then you’ll love Robert Moriarty’s powerful resource. Buy Nobody Knows Anything to find out how to make your money work harder today!"

This is an extremely short read which you can devour in just a couple of hours. Bob spends the first 20 pages of the book talking about his other favourite investing book called "Extreme Popular Delusions and The Madness of Crowds".

Basically reminding us that we are herd animals and tend to go where the herd goes. We've done it before and we continue to do just that when it comes to investing. This can end up costing a lot of money and not allow us to take profits when we are given them. NO! the herd keeps holding which usually results in a loss.

EPD covers manias of the past like Tulipmania, The South Sea Bubble and others that have caused human beings to go insane to make money and follow fraudsters like Bernie Madoff.

I had no idea a genius like Sir Isaac Newton lost his life savings on a misadventure like the South Sea Bubble. EPD is a great book to educate yourself on the history of these manias and how they are still happening.

Being a Contrarian

Pretty much this is the whole essence of the book. If you want to make money flipping stocks, be a contrarian. Bob gives a history lesson on some recent investing manias that a lot of us have lived through.

Remember this - The Herd is Always Wrong

Not sure if that's right?

Who fell for Y2K?

We all did. Good example? The world was going to grind to a halt and stop working. People were stalking up on canned food, gold, cash and water. The whole Doomsday Prepper movement was started on this nonsense. Millions were made and fleeced from the herd and businesses that needed their computers upgraded. It was all bullshit.

How about other recent manias investors are caught up in?

Dot Com stocks, Pot stocks, Bitcoin, Lithium, Rare Earth Elements, Uranium, Gold and Silver and on and on. You name it and the herd stampeded in. Some made money and some were late to the party as always happens. 

Why is that?

Because the dumb money buys at the top of the mania and the smart money accumulates at the bottom.

The exact opposite of what the herd does. This is the essence of Bob's book. You must think and act differently from the herd.

You must take profits. IF NOT, the alternative is to take a loss!

To do this - BE A TRADER when it comes to investing in these stocks.

BUY on low volume and SELL on high volume!

The Next Big Thing

Great chapter for traders about looking for opportunities.

These are created by newsletter gurus. Guys like Jim Dines and Doug Casey. Investors like Eric Sprott. They create manias. How? Massive subscriber lists, slick and glitzy marketing. People want in and nothing can stop them.

Once they get in guys like Sprott, Dines and Casey are taking profits. Usually because they own enormous stakes in the companies or commodities they are pushing and heavily promoting.

Gurus take to the TV and make recommendations to the herd to keep them satisfied. How can everyone be right recommending six stocks a day week after week? They aren't. Gurus know when to take a profit. You need to do that too!

Just go to any discussion board on any pot stock on Yahoo. People are bat shit crazy about these stocks. They natter on about the long term prospects even when they are down over a 100% on their money. You are labelled a troll for even questioning their thought process.

The pot mania is OVER! You are a loser if you didn't take your profits early. News Flash - NONE of these companies are making money. The granddaddy of them all has lost over $50B in market cap and has not even made a dollar. WEED. TO. Those who took profits months ago were the smart money. Of course they claim to be long term investors because they have no choice but to hold and try to scratch back their money.

Bitcoin peaked at $20K but still there were buyers until they got drowned in the shallow water by sellers. It's now just over $10K a piece. Are you buying? Do you believe lightning strikes in the same place twice, three times? You decide but just ignore the fools on these boards.

Manipulation

One of those words you only hear the whiners use when they're not making money on a badly timed investment. It's a whole industry itself. You never hear claims of manipulation on the way up. NO, they just tell you that it's now a free market and this is how it is supposed to work. On the sell off they all scream manipulation. Again, ignore these fools and take your profits early.

Silver went from $4-$50 and gold peaked at over $1900 and now sits just above $1500. Manipulation? fuggetaboutit! please. Bob loves to talk about manipulation.

When to Sell and Why

First of all, ignore all the mainstream daily business news. There is no correlation between what you hear from TV gurus and your investments. Do they tell you what to buy that's down and being sold off?

NO! but that's where to look for opportunity.

Bob recommends selling a position and taking profits after a double. SELL 33% of your position each time your stock doubles if that happens. Investors get greedy and hang on too long. If it gets to a top sell part of your holdings and take some profits.

Protect your capital. He provides some great individual examples of gold stocks that rose dramatically and then in a few short years gave it all back.

Lots of great tidbits of investing advice here.

My Final Take

Bob also provides a great list of resources he uses to make decisions. Chart services and newsletter writers.

Bob also runs 321gold.com and 321enery.com

he is a trader and if you are too then this is a good primer to keep you motivated.

Be a contrarian and look in the bargain bin for stocks and don't buy what's high and expensive.

Ignore gurus and news.

Everyone else is biased and has an agenda. Beware of who you listen to and what and why you are buying a stock.

I loved this book and I think everyone should have it on their shelf.