The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: mustachioso on January 07, 2014, 11:57:12 AM
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With the seemingly imminent legalization of marijuana a few of my friends have invested a few thousand dollars into the 'picks and shovels' of the medical marijuana industry. Being a true mustachian I told them I don't gamble and stayed out. Boy do I feel foolish now!
Sure, this is probably a flash in the pan and someone is going to be left holding the bag but I was wondering if anyone else saw any opportunities or if you think things might go terribly wrong in the long term for stocks like these.
MDBX - up 75% at the time of this posting
MJNA
PHOT
CBIS
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ERE Forums had a thread on this awhile back:
http://earlyretirementextreme.com/forum/viewtopic.php?f=3&t=4285
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Haven't looked into it, but the pertinent questions would be:
1) Do these guys have any proprietary technology that bigger firms can't simply copy?
2) Is their first mover advantage big enough to justify their valuation?
3) What do their current valuations imply about earnings growth and is this reasonable/justifiable?
As an asymmetric get-rich-quick trade, you've probably missed the boat. I'm guessing you're firmly in greater fool territory now, but again, I haven't looked at the numbers.
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It is pretty crazy.... a $10k invested in GRNH about 7-10 days ago would give you about $125k today. Flash in the pan, greater fool yadda yadda.
Coulda woulda shouda!
Gambling, and at this point too late to jump in. (or not...who knows?)
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I notice some of those stocks (or ones like them) in the Trends section of Google finance every time there are legalization/decriminalization movements.
It would be pure speculation on your part to invest in them.. but they'll go down.. and within a year there will be another big news story and the prices will spike again..
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Just an update - MDBX peaked at $100 and is currently at $43.25 which is still 115% YTD.
Something to think about if you know some legalization news is coming and you feel like gambling!
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Just an update - MDBX peaked at $100 and is currently at $43.25 which is still 115% YTD.
Something to think about if you know some legalization news is coming and you feel like gambling!
I don't really think so. 2 arguments
1. Marijuana is one of the most versatile plants on this planet. It's like a ****ing superweed. It becomes legal? If I like it, I get a couple of seeds and grow it myself.
2. You really think Big Tobacco is going to ignore marijuana if it becomes legal? Big Tobacco already has it's eyes on the E-cig market(Lorillard already bought Blu and a british brand, Reynolds has it's own brand).
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I bought SKTO back in March 2013, got it for under 1/2 of a penny and made a nice profit during its run up. They're all roller coaster rides and very speculative. There's a lot of manipulation on all the pot stocks, so be careful if you ever decide to give it a shot. I still hold quite a few 'free' shares, just in case it makes one of those mysterious runs like MDBX or MJNA
have to throw this in here, i saw a penny stock BITC jump up 2400% in one day...it claims its a bitcoin exchange company with a rinky-dinky website, but just a few weeks ago it was gold mining company and just got its ticker changed to BITC...pure speculation.