Commodities and Gold

Bigger Isn’t Better

Big Cannabis took a critical turn this week, with the major cultivators I track rebounding 13 percent. They still have a long way to go before reversing all the summer’s losses, but this is a step in the right direction.

The catalyst, ironically, was industry giant Aurora Cannabis Inc. (NYSE:ACB) deciding to exit its 10 percent stake in relatively tiny Green Organic Dutchman Holdings Ltd. (TSE: TGOD).

In theory, the investment gave Aurora the right to buy 20 percent of Green Organic Dutchman’s crop at wholesale prices. This would boost its overall capacity at a reasonable price, while keeping the door open to a full-fledged acquisition.

But the reason markets are cheering is that cashing out now demonstrates that Aurora’s management recognizes that boosting production is not the goal. This is a commodity business. More supply is not good.

Sometimes you need to give demand time to catch up with supply. For Aurora, there’s evidently enough cannabis flowing through the system now. They don’t need more.

And since Aurora bought into TGOD early, they’re exiting the relationship with roughly a 70 percent profit. Other investors who believe in TGOD as a going concern can take over from here.

What turned the Big Cannabis stocks around this week was the simple admission that they’ve gotten too big. It’s time to get smaller.

Likewise, we’ve steered clear of all but the best Big Cannabis cultivators in my Turbo Trader “Marijuana Millionaire Portfolio.” The stocks are too big for their business models.

I think it’s time to get a little smaller. Companies like TGOD may be where the real future of this industry will play out.

After all, the FANG stocks of Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google, more formally known as Alphabet (NASDAQ:GOOG), have run out of steam. It’s time for the baby tech stocks to take their place. That’s true in any mature industry. Cannabis is no exception.

P.S. Don’t forget, my new 2-Day Trader service has started with a perfect 10 for 10 record of profitable trades. To learn about this unique trading service, click here now to watch my presentation about how you can profit, too.

Join me at The MoneyShow Philadelphia!

The MoneyShow is heading to Philadelphia for the first time ever and I’m excited to join some of the country’s smartest professional investors and traders at this complimentary, three-day event, Sept. 26-28.

I will be analyzing sectors and trends, as well as sharing with you time-tested strategies for profiting in the markets. I also will be joined by investing experts such as Bryan Perry, Bob Carlson and Dr. Mark Skousen in discussing stocks, exchange-traded funds (ETFs), income investing, real estate investment trusts (REITs), commodities, trading strategies and much more!

To register, click here or call 1-800-226-0323 and be sure to mention my priority code of 048290 to receive complimentary admission.

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. The Financial Times describes Ms. Kramer as “A one-woman financial investment powerhouse” and The Economist distinguishes her as “one of the best-known investors in America”. Ms. Kramer is often quoted in publications such as the Wall Street Journal, New York Post, Bloomberg, and Reuters. She is a frequent guest commentator on CNBC, CBS, Fox News and Bloomberg, providing investment insight and economic analysis. Ms. Kramer was an analyst and investment banker at Morgan Stanley and Lehman Brothers. Ms. Kramer founded and ran a long-short hedge fund and has been chief investment officer overseeing debt and equity portfolios. Since 2010, Ms. Kramer’s financial publications have provided stock analysis and investment advice to her subscribers. Her products include GameChangers, Value Authority, High Octane Trader, Triple-Digit Trader, 2-Day Trader, IPO Edge and Inner Circle. Ms. Kramer, a Certified Fraud Examiner, has also testified as an expert in investment suitability, risk management, compliance, executive compensation, and corporate governance. Ms. Kramer received her MBA from the Wharton School at the University of Pennsylvania and her BA with honors from Wellesley College. Ms. Kramer has provided testimony regarding investment policy to the U.S. Senate and is a frequent speaker on the markets, portfolio management and securities fraud and compliance. Ms. Kramer is also the author of “Ahead of the Curve” (Simon & Schuster 2007) and “The Little Book of Big Profits from Small Stocks” (Wiley 2012).