How I Invest in Tilray
Over the years, Tilray's stock has significantly decreased in value, now sitting at around 1% of its all-time high. So, why do I continue to hold the stock? While its price has fallen, the company has actually grown in terms of assets and revenue. I originally owned Aphria before its reverse merger with Tilray, purchasing shares at around $5 each. Over time, I’ve followed the company closely, listening to the quarterly conference calls led by CEO Irwin Simon. After each call, I always felt more confident in the company’s strategy and direction.
At first glance, it might seem like I've lost 75% of my investment, but that’s not how I view my approach with Tilray. I maintain a core position and trade around it. Over the years, I’ve used a strategy of dollar-cost averaging (DCA) — buying at $5, then continuing to purchase more shares as the price dropped. When there were positive headlines, like Joe Biden winning the election, I would sell the shares I’d bought for under $5, while keeping my core position intact.
Unfortunately, Tilray's stock price continued to decline, so I kept buying more on the dips, which increased my overall position. This dollar-cost averaging strategy meant I invested more capital, but it also gave me a larger position that could potentially see greater upside when the stock eventually rebounds.
The tricky part of this strategy, however, is that once a stock breaks key support levels, gains can quickly evaporate. In my case, the volatility has meant that if the stock drops too far, I could lose all my trade gains in a matter of days.
As of today, my average price is $1.69, and I’m currently dollar-cost averaging at $1.38 in an attempt to lower my overall average cost. With political uncertainty high and the company’s annual meeting scheduled for November 21st, I’ve also bought a put option at $1.50 for $0.09 per contract as a hedge to protect against further downside risk.
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