Belltech1275 wrote: SO I AM REPOSTING - FOR THOSE WHO BASH THE STOCK.
The Coming Of The Masses, And The Need to Recalibrate
1) The Coming Of The Masses: It's a phenomenon that gets repeated time and time again in the market, where the masses gravitate to a sector or a stock, and the stock goes on a run that is almost unfathomable. Probably the most recent example is the bitcoin rally that happened a few months ago, taking bitcoin to absolutely unexplainable dizzying heights. Yes, eventually there is a re-thinking and the stock eventually normalizes. But that updraft, when it happens, is a unique event that can go on for weeks or even months.
It's the masses. It's about the buying of the masses. Fueled by greed, the herd gravitates to a stock or a sector, and their collective buying drives things up far far FAR beyond what anyone thought was possible. We've even seen the same thing in the whole S&P through to this past January. People bought in indiscriminately. And as per usual, those tops were also when Funds were seeing their biggest record inflows coming from the masses. Another good example was the tech bubble of the late' 90's.
But make no mistake. The masses have absolute power to make this massive updraft happen time and time and time again. The question is, with WEED about to get listed on the NYSE, are we about to see this massive updraft happen here yet again? Two thoughts here: First, it hasn't happened yet.... not at all actually. Secondly, yes, I think it absolutely WILL happen. Here's why:
1) For the "masses" effect, it HAS to be something understandable. That understanding does not need to be deep, but it does need to capture the imagination in some way. For example, I highly doubt that the masses understood tech companies in detail, but the new phenomenon of the internet did have the ability to capture the imagination of the masses at the time, so "anything internet" got driven to dizzying heights. I remember clearly a basic travel agency that got a website, and the stock exploded. "Wow, they will now sell to the WORLD"!!" Imagination set a fire that just wouldn't quit.
The masses can ABSOLUTELY understand pot, but as it applies to Canopy, the imagination is captured on MULTIPLE fronts:
a) Opioid replacement: This is a massive topic in the States, and on the lips of almost everyone.
b) No calorie beverage disruptor. The masses understand the size of the beer/spirit market, if only by brand name recognition, and they understand how huge this new market could be. It absolutely has the power to capture the imagination. Just saying "nice buzz no calories great tasting" covers EVERYTHING to fuel that imagination.
c) The pet market: Again, FULLY understandable.
d) Medical benefits: This ties into the Opioid issue, but the masses are begging for alternatives or relief on multiple fronts. Even if mj ultimately doesn't prove to be the massive benefit we think it could be (Personally I think it will be, but just for sake of argument here), that in no way stops the imagination at this point of the masses. And that imagination is absolutely jet-fuel to the share price.
e) Global company amidst global change: Again, another "imagination capturing" thing for the masses. They see first hand the changes that are happening around the world (if not in their own backyard), and that generates a huge amount of excitement in a brand new field. It has intrigue. It has cache.
f) News coverage: Hardly a day goes by now where there isn't something in the media about possible medical benefits, or changing laws, or the potential for changing laws, or changing sentiment. It is an absolute daily buffet of news that will focus and prime the masses to be a part of the change.
Warren Buffet always said he would never invest in a stock he couldn't understand. This thought speaks directly to the masses, i.e., people are far more willing to invest in something they can grasp. At the very least, it helps them feel smart. It lets them be part of something big. And if it captures their imagination, it can drive a stock to valuations we wouldn't dare dream of, in a very fast manner.
2) A Recalibration of My Thinking of "Where Canopy Is": For those of us who have been around the stock for a couple of years, our thinking has primarily been Canada focused. That's understandable, with other interests being recognized, but viewed at a distance. When it came down to it, these other things were all tossed in the bin of "someday" ideas. This includes other countries legalizing, building facilities in other countries, beverages, full recognition of all the medical benefits. Even global sentiment fit into this category I think, whereby we hoped it would one day change, but never really appreciated at the time how fast this change was coming.
So with this "primarily Canada" focus, I considered Canopy to be in the "5th inning" so to speak. But the above global considerations ARE coming far far faster than I dared to think, even a year ago. No longer are they just "out there" things. Global sentiment is changing dramatically. U.S. sentiment, thought to be in a Federal deep freeze, is suddenly doing back-flips, with active talk of Federal laws changing. Medical considerations are being explored on all fronts simultaneously. The opioid crisis, horrible as it is, is (unfortunately) is having a massive benefit for the mj discussion, far far more than we would ever hope or pray for...but there it is. I don't like benefiting from a horrible situation, but it is what it is. It IS a powerful motivator for discussion and change of sentiment. Beverage was an 'out there" idea, but here's Constellation now, front and centre, ready to move forward at the first opporunity, also lending Canopy a HUGE amount of street cred. Cramer even mentioned this fact himself.
What twigged me to think further on this was one of the talking heads on CNBC, in the half hour prior to the Cramer interview. He said something along the lines of, via the NYSE listing, people will "be able to get in on the ground floor of an exciting new growth area. Huh?? Ground floor? Did I just hear that right?? How could I think "5th inning", and he's talking ground floor??
But this is where the recalibration needed to happen, and now (for myself at least) has happened. This story has now moved fully beyond Canada, and in that sense...that global sense...we truly ARE at the ground floor. Recalibrate. Call it the first inning all over again, albeit on a much much bigger scale.
Now that's a scary and enticing thought. If we're truly just in the 1st inning of a Global phenomenon, what kind of valuation will that bring to the company who is the biggest and best, with true global aspirations, the financial clout to do it, with virtually no competitors. Additionally, can the masses understand all of this too? Hell yes, they can! And they will buy, as masses only can. And by the way, this will be U.S. Funds and Institutions too. They know ground floor when they see it, and finally, they'll be able to buy right there on their own home turf of the NYSE.
So here's the biggest, and the best company, with no real competitors, in a new field that is going global at a break-neck pace, backed by Constellation, and now listing on the NYSE, the biggest exchange in the world, finally giving the masses full access to this company to buy the heck out of it, fueled by incredible potential, reality, cache, and imagination. And then ask, what is the alternative investment opportunity out there? Cronos????? Don't make me laugh. Good on them for being first, but really, they're nothing in comparison, and simply do NOT have the capacity to attract the masses or inspire imagination the way Canopy can. For the time being, and for some time to come, Canopy will truly be the only NYSE game in town. A unicorn stock unto its own, with not only no real competitors in the mj universe, but no competitors either on the NYSE.
People need to be ready for this "masses" phenomenon on a number of fronts:
1) The updraft, when it happens, will be sustained for weeks if not months. The biggest risk here will be selling too early. There will be some violent swings along the way. Look at any stock that has gone through a similar phenomenon. Bitcoin, Tech bubble, S&P, whatever you want. It doesn't happen overnight, but the OVERALL move up is breath-taking. Again, the biggest mistake people will make is selling far far far too early as this phenomenon takes hold. (Please note: Some of these I've noted as examples were cra*p ideas. I only mention them because of the phenomenon, and not the validity of them, in and of themselves).
2) Don't look back. The profits you have made are irrelevant to decisions going forward. This often prompts people to sell early. I've seen people miss 90% of the run-up, to take 10% of the gain. That's enough to make me jump out the window. (It's one of the reasons I keep my office on the first floor).
3) Recalibrate now. Think global. Realize 1st inning. This company is now going into a different phase, leaving this initial Canadian phase, and its impact, behind for far bigger pursuits where they are already the undeniable leader.
4) In concert with this recalibration, realize that stronger and bigger forces are going to take hold, than Canadian lead events. When I hear people talk about selling on Canadian legalization, I now consider this thinking to be extremely short-sighted. Know that is the far bigger global events taking place, and the pace of them, that are now driving Canopy and their share price. Canadian events gave the initial phase boost, but are now secondary to the bigger global picture that is on the cusp of developing.
Here's the summary of all of the above: It's going to be a wild ride, people. Hold on tight. VERY tight. Expect it. And ride it for ALL it's worth. Simply put, there is a MASSIVE amount of money about to be made. If you play it right, everyone here has the opportunity to do just that.