I’ll keep this brief, since my thoughts haven’t changed since last week.
The market hit a rough spot this week, and so did gold, but gold finished strong, and I expect gold to have a strong week or two coming up. Why? It’s down, but it’s in an uptrend, so we should see strength in coming weeks. Also, “golden week” in China is ending, and as I understand it, it’s like a vacation week where nothing happens, so no gold is purchased, which depresses the world wide place. By the end of next week everyone is back to work, so I assume that will give gold a bump.
Or not. What do I know?
I am also continuing to raise cash, because cash is king, and I would like to have a lot more cash in my pocket than I do now, so I continue to sell my non-gold holdings on strength.
That’s the plan; see you next week (if I have anything intelligent to add).
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Have the pot stocks fallen so much that they are now a buy?
by JDH on October 12, 2019
Fortunately for me, I began the liquidation process on my pot stocks many months ago, so I was spared most of the recent carnage. The pot stock market is down around a third this year, and that’s a lot.
TGOD.TO – The Green Organic Dutchman has a brutal looking chart:
It closed on Friday at $1.19, and up 8 cents from it’s Thursday close of $1.11, the lowest it has ever been. That ain’t pretty. Their problem is that the financing that they thought they had in place to complete their growing facilities is no longer available, so their expansion plans are now on hold, and that’s a problem for investors.
That begs the question: if the stock was a buy at a market cap of a billion dollars, is it an even better buy at $300 million?
I don’t know.
My best guess is that they will have to do another equity raise, so presumably they will hope for a bounce in the price, and then try to raise enough equity to complete their projects.
I’m already out of the stock, and I have no plans to go back in, but if you are a gambler, perhaps now is the time.
Or not.
If they do need to do an equity raise, I would prefer to have cash on hand, so that when they do it I can get stock and a warrant, if that’s what’s offered.
So, for now, cash is king.
The smaller players will have trouble raising capital, so being an observer is the safest option.
Happy Canadian Thanksgiving; more next week.