Marijuana stocks are hot again.
As share prices rise, the crowd gets more excited. Once again, the belief is spreading that all one has to do is to buy the hottest marijuana stocks and cash in.
This could not be further from the truth. Investors are forgetting that marijuana stocks can be very volatile. When I wrote “How to potentially become a marijuana millionaire, albeit carefully,” the most important word in the headline was “carefully.”
Some will make millions in marijuana stocks, but many more will lose their shirts. Let’s examine this issue with the help of a chart…
• The chart shows when the Arora buy signal was given. Using Arora Trade Management Guidelines, the average buy price was $4.21. Hindsight shows that the buy signal was given close to the bottom. Aphria is trading at $10.67 as of this writing.
• The reason the chart compares Aphria with Tilray is that the Arora call was to buy Aphria and sell Tilray for the medium term. Please see “Buy the previous ‘don’t touch’ marijuana stock and sell the darling.” At that time, Tilray was the darling and everybody was selling Aphria. My call was an unpopular contrary call.
• The chart shows that the contrary call made a 143% performance difference in a short time.
• Aphria is moving up on hopes of a higher buyout offer.
• Cronos CRON, +13.26% is one of the strongest marijuana stocks as of this writing. Interestingly, The Arora Report made a call to buy Cronos just before it received a major investment from cigarette maker Altria MO, -0.71% This call produced large gains in a very short time. The call to buy was made at…
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