Canopy Growth

In a nutshell, this is why it is dangerous to short companies on the basis of valuation – something over-valued can get even more over-valued:

Many people lost their financial lives shorting .com stocks in 1998-2000 due to their valuation. Many people will be losing money shorting cryptocurrency and marijuana stocks (if they haven’t already). Timing this is nearly impossible, but whoever gets it right will become quite rich.

No positions in WEED (now nor likely ever).

3 thoughts on “Canopy Growth”

  1. Would love to get your updated thoughts on Vancouver (and Canadian) housing. 5yr bond rates are at ~4 year highs at 2%; mortgage rates are 60-70bps higher than 12 months ago with ~50% of mortgages renewing this year; OSFI B20 rules in place; likely a 3rd rate hike by March; some additional supply finally hitting the market (21k units completed in metro Van in 2017 / 42k units under construction).

    Thanks!

  2. I’ve long since given up predicting housing price trends in Vancouver. All factors you’ve mentioned are unfavourable to upward pricing but noticeably absent is any analysis of Chinese foreign capital influx into the market (which swamps the domestic side of things).

  3. Purposely didn’t mention but fair point, that I also agree with / believe in. I don’t expect BC gov’t to do much in that regard (bare trust “loophole” will be gone, maybe the 2% “speculation” tax).

    What may be a factor: CAD/CNY back at ~2014 levels; based on NY luxury condo market and Australia RE markets, Chinese outflows have decreased significantly last few months, which reconciles with Van detached market (Van may still get flows from Middle East, India, others of course); NDP seems to be tackling money laundering; US bond yields ticking up so there may be some alternatives to real estate (even bitcoin haha), but this is minor.

    Even if those things make an impact on new flows, there’s already billions of dollars in the system that has entered since the 80s. So I’m in the same boat as you – “who knows”.

    Thanks

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