Don't spit into the wind.Today I read a Morningstar Stock Strategist Report on cannabis sector by Kristoffer Inton issued July 10. I was hoping for more optimism, but he offers a very grounded reality that the cannabis business is just not looking as healthy as we all would like to see. Here's my thought for the day > When the analysts start throwing blankets on a sector that is on fire, it actually means things will soon get better!
Yes... better. Most of these guys sat on their hands in the early days writing about how stupid the valuations were and their clients got angry because they missed the boat. The banks stayed away and the Cannaccords of the world pumped the stocks and ROLEX sales went up.
My guess is that the Morningstar community distribution across Canada and the US is quite large, easily into the hundreds of thousands, even millions. Just my guess since they have been around since the 80's. So, this report and others like it to come, will affect sentiment to the down side. You can see that today.
I have been around a long time, and this is not my first rodeo. Based on my past experience, analyst reports coming out at this stage can lookd at with skepticism > bitterness from missing the boat and more important, hidden agendas. I am not keen on analysts, and personally believe most will flip/flop like a beached fish. They don't say sell, but they don't say buy. But hey... NOW THEY ARE COVERING CANNABIS. Wow. Welcome back from outer space.
Jeff Bezos once said that people who are right a lot often change their minds. I am good with that. And you should be too, because after things turn around, people will get giddy again.
Right now there are a lot of people changing their minds. And a lot getting knots in their stomach from buying cannabis stocks at higher prices. And they are going to dump at the absolute worst time because that is what dumb money does! Personally, when the dung hits the fan, I sell half. Then I am certain to be half right and half wrong. LOL
Somebody tell me what billion dollar industry is going to grow at 25% a year for the next ten years? Today the US snack industry reported sales are booming thanks to cannabis infused edibles. And we are only getting rolling.
Black market... yadda yadda... high startup costs... yadda yadda... high operating costs... yadda yadda. This is normal for this stage of business development.
In summary guys, expect the wind in our faces to get stronger in ther near term but don't spit into the wind. Wait till the wind shifts because it always does, and if I am right. it's going to change soon.