RE:RE:Easily the worst investment Ive made in a whileI agree. Young investors and those investors, new to the investing world, have only known a market that has moved upward over the last 10 years with a few modest fluctuations alomg the way. Of course, I should qualify that statement and indicate that this statement should apply primarily to USA markets. For the same time span, the TSX has remained fairly flat and, as with the US markets began moving into a period of increased volitility at the beginning of 2018 and, as indicated by a number of market analysts, will see an increase of market volatility for the foreseeable future.
The TSX Venture, as many have seen by it's significant decline from the 840's to the very low 600's, is an entirely different animal and has a life of it's own. Those investors that find themselves attracted to the start-up companies and juniors that are listed on the exchange have to have nerves of steel and a cast-iron stomach in order to handle the ups and downs, sometimes violent, of the share prices on these companies. Investors have to expect, going in to a speculative buy that they could loose their investment in a worst case situation. They also have to go in to their investment expecting that it could be several years before one of these junior begins to see a positive revenue stream and that what ever revenues they generate gets plowed back into the company to expand the business, develop prototypes of equipment and processes, an industry network and so on and so on. Young companies often find it necessary to continually return to the market to raise capital to continue to finance the business and that this tends to result in a greater dillution of shares much to the shagrin of some investors. These factors all come together under the catagory of 'growing pains'. Eventually, however, some of these companies claw their way out of the primordeal mud and evolve into profitable and productive companies with consistantly strong, healthy, balance sheets and reward their investors with a climbing stock price and growing dividends. Others of these juniors get obsorbed into larger companies through mergers or aquisitions while a few whither on the vine and die away.
Investors must understand that the recreational MJ industry, in Canada, is still in it's infancy and there is going to be volitility, not just as a result of the current volitility in the overall market but, also as a result of companies and governments feeling their way along and, no doubt, running into unanticipated hurdles that could not be foreseen until the industry was up and running. Remember, the industry was just born on October 17, 2018 and is just learning to walk and it will continue to stumble at least for a couple of more years.
Canopy Growth just spun-off Canopy Rivers a short while ago and it is going to have it's ups and downs for a while. Investors also have to understand that Canopy Rivers is still to closely associated to Canopy Growth and has not had time to develop an identity of it's own so it's share-price tends to rise and fall with the fortunes and share-price of Canopy Growth. I suspect, that also because of this close affiliation with Canopy Growth that a number of investors bought into the Canopy Rivers IPO and in the days following with the assumption that the share-price would takeoff in those first days and climb to double digits and continue climbing. I suspect that a number of the more inexperienced investors may have bet the farm and bought large positions in the company without considering the risk that they could loose badly if their hoped for gains did not materialize. Of course, this just didn't happen and the more fickle investors began abandoning their positions as day traders off loaded their holdings, having made their money and moving on to greener fields, and seeing the share-price errode. Further to this, the last couple of weeks, in the over all market, have not been kind to investors, especially on the TSX Venture and the CSE as a large number of listings continued to be in the RED and share-prices continued to decline. Canopy Rivers has not remained unaffected by this.
Soon, we shall also be in tax loss selling season, again. So for this next generation of investors, BEWARE. Until the middle of December share-prices, in a majority of equity markets, whether it be Canada, or the United States, Mega-caps or micro-caps and juniors. is going to make these last couple of weeks seem like a mild case of the flu as more seasoned investors sell off their losers and rebalance their portfolio holdings to take advantage of capital loses or capital gains come tax time. Come January, barring any unforeseen circumstances, political or otherwise, the markets will hopefully stabilize and share-prices begin to climb again as the new US Congress and Senate get down to business, Brexit gets closer to being sorted out and China and the US decide that the actually need each other, at least as far as trade goes and the new USMCA is hopefully signed off, on, by the US Congress. In the meantime, Canopy Rivers will find it's way. It just takes time.