I'm Hoda Mehr, founder and CEO of Stock Card, and on this blog and the accompanying YouTube channel and Podcast show, I share detailed fundamental analyses and interesting investment stories. The rise and fall of cannabis stocks is a classic story of investors running wild after the next big thing, pushing the prices to levels completely disconnected from the economic reality behind the companies and stocks in that sector. Then suddenly and violently, everything comes down crashing. Almost all similar stock market stories start with a new shiny sector and end with investors losing almost all their capital.

I own a few shares of Canopy Growth in my portfolio, shining red hot at the bottom of the biggest losers. I purchased those shares in 2018 with a few justifications:

1. It was the leading company in the market.
2. Revenue was growing steadily.
3. Was a founder-led company at the time.
4. It received a $6B investment from the alcoholic beverage company Constellation Brands to create and distribute a line of cannabis-infused drinks.

Those were solid reasons to take the bet and buy 65 shares at $30 apiece. My investment almost doubled, with the company hitting an all-time high of about $50 and then crashing down to $1.5 per share the day of recording this video. I didn't sell at the top, nor have sold when I lost almost 94% of my investment. Losing the value of your investment if you don't need the cash isn't a good justification to sell. Only panicked investors do things like that. As a fundamental, long-term investor, I need to ask myself whether I see a reasonable path to recovery and whether I should buy even more. 
As Uncle Buffett puts it, if the price of hamburgers goes down, you don't stop eating them. You may even eat more.

Now, how can Canopy Growth recover, grow and even thrive in the next ten years:

1. The overall cannabis market may grow rapidly, putting wind behind this almost sinking ship.
   
2. It can find a path to grow revenue. After all, we've seen nonalcoholic beverage brands such as Celsius setting record-breaking growth. Canopy Growth can and should be able to do similar.
   
3. Or, the company can find a way to run its operations efficiently, turning into a cash-generating and profitable stock. 
   

In the next few minutes will go through all three options and discuss whether any of the three routes is possible for Canopy Growth.​

For example, an ETF focusing on the cannabis industry with low or reasonable management fees and large enough assets under management can be a good choice. 

Most investors are familiar with Alternative Harvest ETF, ticker MJ. It's not a bad choice, with $230M in assets under management, 37 holdings, and more than seven years of operations history. But, with a 0.75% management fee, it is an expensive ETF. 

Alternatively, Global X Cannabis ETF, ticker POTX or Cambria Cannabis ETF (Ticker TOKE) can be good choices, too.

I prefer Cambria Cannabis ETF because of its low 0.45% management fee and exposure to pharmaceutical companies active in the cannabis research space among its top 25 holdings. It is run by Cambria ETF Trust, a company by Meb Faber, a very logical, steady, and value-driven investor. I trust his judgment. 

The risk with Cambria Cannabis ETF is that it has a very low asset under management around $11M, which adds the risk of running out of money and liquidation if the prices do not recover soon. 
 
I choose to sell my CGC shares, use the loss for tax loss harvesting, and then buy a few shares of Cambria Cannabis ETF to bet on the cannabis market's growth rate in the coming years. Reminding you that this isn't investment advice. 

Now it's your turn to do your research. I leave a link to MJ's ETF Card and CGC's stock card on our platform so you can research them too. Also, don't forget that you can get a full list of all stocks in the cannabis industry by typing cannabis in the show notes. I leave a link to that list in the show notes too. If you have a better strategy to bet on the cannabis industry, share it in the comments so we can all learn from each other.

I'll see you next time. 

Watch this episode on YouTube​

• The Federal Reserve is considering tapering back it’s economic support soon, and the market dropped in response.
• Both Lowe’s (LOW) and Home Depot (HD) posted earnings this week, but share prices have gone opposite directions.
• A new development in gene-editing technology gave investors the conviction to double down on gene-editing stocks.

The Federal Reserve is considering tapering back its economic support soon, and the market dropped in response.

The market indices ended the day in the red once again.

We discussed the remarks by some Fed officials about the tapering of some favorable monetary policies. We received more concrete evidence for it today. The market's slide today is mostly due to the Federal Reserve’s July meeting transcripts that were released today. It shows that some members of the Fed were looking to reduce its asset-buying practice sooner rather than later, possibly as soon as this year. These members used the price stability and employment numbers as examples for why the government could ease off on supporting the economy. In response, stocks took a noticeable dive today.

Both Lowe’s (LOW) and Home Depot (HD) posted earnings this week, but share prices have gone opposite directions.

Today, I was browsing the list of winners on Stock Card and Lowe’s Companies (LOW) caught my eye. Lowe’s is the second-largest home improvement retailer in the world, so I wondered what could have moved the stock 10% in a session. Before today, the stock was at its lowest point in nine months. It seems that it was sliding quickly based on Home Depot’s (HD) subpar earnings report from two days ago. Investors looked at the HD's disappointing same-store sales growth and assumed Lowe’s would share the same picture.

Fortunately, Lowe’s had decent earnings and a good financial outlook today, which was enough to please the pessimistic investors. Home Depot’s CEO had blamed inflation such as lumber prices for its impacted sales, and while that certainly affected Lowe’s as well, its management is taking a more optimistic approach. Home Depot didn’t give a financial outlook due to rising COVID cases, yet Lowe’s raised its forecast for the rest of the year despite acknowledging that there was uncertainty.

Lowe’s Stock Card is a nice 3-greener. Home Depot has similar ratings, but its stock price is a little more expensive, and it has posted a worse return on investment over the past year, or three, compared to Lowe’s. If you are trying to pick between these two home improvement giants, Lowe’s is looking like your better bet. I don't own either of the two. 

A new development in gene-editing technology gave investors the conviction to double down on gene-editing stocks.

As part of my market research today, I noticed the number of gene-editing stocks that ARK Invest picked up yesterday on its trades tracker on the ARK website. It got me curious as to why Cathie Wood and her team decided to scoop up so many genome shares this particular week. 

Some of you who follow my portfolios on Stock Card know that I’m a big fan of the future of gene editing. It’s a megatrend that will be shaping much of our future! A while back, I split $10,000 between 10 gene-editing stocks and I’m planning to hold them and go long.

Back to ARK, according to ARK Invest's latest newsletter, there’s been a great breakthrough from the researchers at Harvard and Howard Hughes. They call the new technology “prime editing,” and it’s going to help us treat a wider range of conditions, and do it more effectively. The main advantage to prime editing is how much neater the process is when editing a strand of DNA. Prime editing allows researchers to “copy” new information onto DNA without risking damage. This is another step towards gene-editing that can benefit our entire society. That perfectly explains why Cathie and her team got a stronger conviction about the future of gene editing stocks. 

While I picked 10 gene-editing stocks to ride the wave, it's also possible to buy gene-editing-focused ETFs and simplify your process. Here’s two I like:

• First off, Cathy Woods has an ETF specifically for this reason. Type the ticker “ARKG” into the search bar on Stock Card, and get ARK Genomic Revolution ETF (ARKG). 
• On the other hand, you can also check out the Global X Genomics & Biotechnology ETF (GNOM) as well by searching its ticker, “GNOM” on Stock Card. This is a similar fund that aims to benefit from advances in genome science and biotechnology. 

Let me know in the comments if you’re joining me as a shareholder of the megatrend that is gene-editing!

Stock Card partner Brian Feroldi breaks down Shopify (SHOP) in his newest video.

Folks, you know that here at Stock Card, we like to partner with successful investors who can share their research, stock picks, and analysis with you. Brian Feroldi & Brian Stoffel run a YouTube channel where they break down and analyze stocks we all want to own.

Yesterday, they released a video where they dug into Shopify (SHOP) stock. I would highly recommend that you check out their video! 

Also, both Brians are intelligent investors who share their portfolios on Stock Card on the Stock Picks page. Brian Feroldi runs two: a Quality Checklist Portfolio and an interesting Anti-Portfolio, which consists of the stocks he reviews but doesn’t think quite stack up. Brian Stoffel also has two portfolios:  Fragile Portfolio and Anti-fragile Portfolio.

Make sure to follow them both on Stock Card to be notified when they add a stock to their portfolios.