Selling More
Back on August 13, when the broad market was strong and marijuana stocks were even stronger, I took partial profits in our four strongest stocks (which were also our four largest positions) because they looked very extended to the upside. In the week that followed, all four peaked, and since then I’ve recommended selling twice again. Our portfolio now sits 35% in cash.
And now I’m recommending selling more, for the simple reason that the charts tell me to. The Canadian stocks in particular are weaker, and while some of our U.S. stocks are holding solid at support, we are overweighted in them and they are at risk of falling off that support. Additionally, the health of the broad market has deteriorated in recent weeks, and given the big advance from March through August, the chance of this correction running longer and going lower is substantial.
So, here’s what I will do now.
I will sell half of both Aphria (APHA) and Canopy (CGC), because money is clearly still coming out of Canadian marijuana stocks; peer Aurora (ACB) released a terrible report yesterday and is down big today.
I will also sell one-third of our positions in Curaleaf (CURLF), Green Thumb (GTBIF) and Trulieve (TCNNF). The first two stocks are holding at support, but we are overweighted, and Trulieve has seen some heavy selling in the past week and has no support level in sight.
After these sales, the portfolio will be roughly 49% in cash.
On the bright side, Cresco (CRLBF) saw some big buying yesterday (for no obvious reason, which is good); GrowGeneration (GRWG) remains impressive (and it remains our largest position), and Innovative Industrial Properties (IIPR) continues to amaze, having pulled back minimally from its record high last week.
On the fundamental side (not that it affects my investment decision, but it’s interesting to know), the U.S. House of Representatives last week decided to delay a floor vote for the Marijuana Opportunity Reinvestment and Expungement (MORE) Act until after the November election.
So I was wrong about that. Politics is not my game.
FYI, our portfolio is now up 12.4% YTD while the Marijuana Index is down 15.9%, and my goal is to keep as much of this profit as possible, while preparing for the next uptrend.