What the Market Volatility Means for Marijuana Stocks


2021-08-13 22:30:30 PROFIT


Once again, there’s uncertainty in the market. With the COVID-19 delta variant beginning to frighten investors, we’re seeing some renewed panic in the market. But what does that concern mean for marijuana stocks? Well, if we look to the past, this could potentially be bad news for stocks. That’s because, just like at the outset of the pandemic, we saw volatile industries—like marijuana—become the first to see huge investor flights. And, to an extent, that’s a perfectly reasonable response. After all, marijuana stocks that are volatile in normal market conditions are even more likely to see rapid fluctuations and rapid declines in times of economic worry. Investors are more than happy to incur higher risk in their portfolios when economic outlooks are positive. But with COVID-19 putting the global supply chain in a stranglehold, investors naturally began to worry. They wanted to find safe investments that would be able to weather the storm. This drove investors away from volatile markets—especially the marijuana market, considering it’s one of the more unstable ones. This move away from pot stocks sent share prices tanking during the first stages of the pandemic. Now that we’re once again concerned about a pandemic resurgence, are pot stocks likely to tank again? In other words, are we doomed to repeat the past if the pandemic once again induces economic slowdowns? Well, it’s hard to say. Yes, history shows us evidence that marijuana stocks will fall. However, this is a very different time. In the early days of the pandemic, people were understandably panicking. No one had any idea of how bad this was really going to get. I mean, I even wrote about how I thought this would all blow over and we’d be back to normal in a few months. (There’s a reason I write about stocks and not virology). This panic caused massive market overreactions, especially among marijuana stocks. We saw shares prices fall more than they should. And that later led to a fairly strong recovery during the market correction that began in late 2020. People realized that, yes, things were bad, but it wasn’t the end of the world. Pot stocks largely began to climb back. While many haven’t regained their 2019 heights (and there are more reasons for that than just COVID), others have rallied back stronger. Chart courtesy of StockCharts.com So now, with the gift of hindsight, we know that even if markets stall for a bit, there’s a good chance that they’ll be able to regain their momentum before long. With that knowledge, investors may be more willing to wait out another downturn, or at least not be as concerned and flee as quickly to haven markets. But either way, it’s not a great sign that we’re seeing uncertainty in the market again surrounding the potential of the pandemic worsening. Now, I acknowledge that my track record isn’t perfect in this regard. However, with vaccination rates high in many developed economies, I don’t believe that things will be as bad as they were the first time around (fingers crossed). But even if we get to the worst-case scenario and things are as bad as they were in early 2020, does that mean that marijuana stocks are no longer a good buy? Quite the opposite. Even in this worst-case scenario, marijuana stocks will actually become even better buys. That’s because there are usually over-corrections that send share prices further down than is warranted, which has always been the case in the marijuana market. These drops have always been followed by strong rallies, presenting investors with cash sitting around. As a result, this gives them the ability to hold these shares long-term until the correction subsides, which is an opportune moment to reinvest in pot stocks. These buys on the dips can yield massive gains down the line. And more often than not, you don’t even need to wait that long. Rallies typically occur within a few months after the drop (although sometimes these drops can last longer). So you can follow the instructions of the age-old adage of buying low and selling high. But this takes us to an even more important point. The marijuana stock market, while it does offer day traders a bevy of opportunities to see gains, is really more suited for buy-and-hold investors. That’s because the week-to-week and month-to-month performance of our top marijuana stocks is hard to predict. However, the market’s trajectory is really only going one way—and that’s up. More markets will open, legalization will become widespread, trade and experience will develop more efficient production methods, and the black markets will diminish. In other words, time is on the side of marijuana stocks. So whether you buy at the zenith or the nadir in 2021, the simple fact is that the top marijuana stocks have not yet reached their peak. Far from it, in fact. Day traders can make money on these shares again, but the issue is trying to time the market just right. And when you have a thing like COVID-19 still stubbornly hanging around, trying to time the day-to-day fluctuations correctly becomes all the more difficult. Instead, you’re better off investing in a still nascent industry that is nowhere near to fully saturating the market yet and reaping the benefits that are all but certain to come in the succeeding years and decade. While the market’s volatility right now is due to COVID’s uncertain situation, marijuana stocks may be in for a bumpy ride. But long-time readers know that market volatility is an issue the marijuana industry has experienced before. And each time, it has come out stronger on the other side Granted, a global pandemic is certainly unique, but that doesn’t change the reason we’re so bullish on pot stocks. Marijuana is a globally in-demand product that is legally available in vanishingly few countries. Once that situation is rectified, we’ll see gains across the board.
市场再次存在不确定性。随着新冠肺炎德尔塔变异毒株开始吓到投资者,我们看到市场再次出现恐慌。但这种担忧对大麻库存意味着什么? 好吧,如果我们回顾过去,这可能对股市来说是个坏消息。 这是因为,就像疫情开始时一样,我们看到动荡的行业--如大麻--成为第一个看到巨额投资者出逃的行业。 在某种程度上,这是一个完全合理的回应。毕竟,在正常市场条件下波动不定的大麻库存,在经济担忧时期更有可能出现快速波动和快速下跌。 当经济前景乐观时,投资者非常乐意在投资组合中承担更高的风险。但随着新冠肺炎让全球供应链陷入困境,投资者自然开始担心。他们想找到能够度过难关的安全投资。 这驱使投资者远离动荡的市场--尤其是大麻市场,因为它是更不稳定的市场之一。在疫情的第一阶段,这种远离大麻股的举动导致股价暴跌。 现在我们再次担心流行病的死灰复燃,大麻库存可能会再次暴跌吗?换句话说,如果这场流行病再次导致经济放缓,我们注定要重复过去吗?嗯,这很难说。 是的,历史向我们展示了大麻库存会下降的证据。然而,这是一个非常不同的时代。 在疫情的早期,人们感到恐慌是可以理解的。没有人知道事情会变得有多糟。我是说,我甚至写了我认为这一切都会过去,我们会在几个月内恢复正常。(我写股票而不是病毒学是有原因的)。 这种恐慌引起了大规模的市场过度反应,尤其是在大麻股票中。我们看到股票价格下跌得比他们应该的要多。这后来导致了2020年底开始的市场回调期间相当强劲的复苏。人们意识到,是的,事情很糟糕,但这不是世界末日。 大麻库存开始大幅回升。虽然许多人还没有恢复到2019年的高度(这不仅仅是COVID的原因),但其他人已经反弹得更强了。 图表由stockcharts.com提供 所以现在,有了后知后觉的天赋,我们知道即使市场停滞了一会儿,也很有可能在不久后恢复势头。 有了这一点,投资者可能更愿意等待另一轮低迷,或者至少不会那么担心,不会那么快地逃离市场,去避风港。 但不管怎样,这都不是一个很好的迹象,表明我们再次看到围绕疫情恶化潜力的市场不确定性。 现在,我承认我在这方面的记录并不完美。然而,随着许多发达经济体的疫苗接种率很高,我不相信事情会像第一次那样糟糕(祈祷)。 但是,即使我们达到了最坏的情况,事情像2020年初一样糟糕,这是否意味着大麻库存不再是一个好的购买? 恰恰相反。 即使在这种最坏的情况下,大麻库存实际上也会成为更好的购买。这是因为通常会有过度修正,导致股价进一步下跌,这在大麻市场一直是如此。 这些下跌总是伴随着强劲的反弹,让投资者坐拥现金。因此,这使他们有能力长期持有这些股票,直到调整消退,这是重新投资pot股票的最佳时机。 这些逢低买入可以带来巨大的收益。很多时候,你甚至不需要等那么久。反弹通常发生在下跌后的几个月内(尽管有时这些下跌会持续更长时间)。 所以你可以遵循低买高卖的古老格言。 但这让我们想到了一个更重要的问题。虽然大麻股票市场确实为日内交易者提供了一系列看到上涨的机会,但它确实更适合买入并持有的投资者。 这是因为我们最大的大麻库存的周与周和月与月的表现很难预测。然而,市场的轨迹实际上只有一条路--这是上升的。 更多的市场将开放,合法化将变得普遍,贸易和经验将发展更有效的生产方法,黑市将减少。换句话说,时间站在大麻库存一边。 所以无论你是在2021年的顶峰还是最低点买入,简单的事实是,顶级大麻库存还没有达到顶峰。 事实上,远非如此。 日内交易者可以在这些股票上再次赚钱,但问题是如何正确把握市场时机。当你有一个像新冠肺炎这样的东西仍然顽固地徘徊时,试图正确地计算每天的波动变得更加困难。 相反,你最好投资于一个还没有完全饱和市场的新兴行业,并在接下来的几年和十年里获得几乎肯定会到来的好处。 虽然目前市场的波动是由于Covid的不确定情况,但大麻股票可能会经历坎坷。 但长期读者知道,市场波动是大麻行业以前经历过的问题。每一次,它在另一边都变得更强 诚然,全球流行病肯定是独一无二的,但这并没有改变我们如此看好大麻股票的原因。大麻是一种全球需求的产品,几乎没有几个国家可以合法获得。一旦这种情况得到纠正,我们将看到全面的收益。