Warrants & Weed

SYNOPSIS

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With nearly 80% of stocks overall declining trend-wise, it was only a matter of time when the cannabis stocks, stubbornly fighting that trend, would succumb to lose their lustre. For us, that just means stepping out of that thematic marketplace for now, until both the general market and cannabis companies in particular show signs of recovery. We’re happy to be mostly in cash! No gains to be made, but no further losses either.

Day by Day… The S&P 500 ended unchanged over the week, while the S&P/TSX Composite Index managed a small gain.

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PTP… Our PTP APAR score dropped a little more last week to 112%. But both the S&P 500 and S&P/TSX Composite Index scores improved a bit, even though they are clearly still negative.

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On the trading front we sold one position and replaced it with another. Otherwise we’re happy to be mostly in cash for now.

PTA Perspective… Warrants & Weed
We were going to take a break from focussing on the cannabis companies for a while, but we can’t ignore the sell-off that began the day before Marijuana Legalization Day on Wednesday, October 17. But, as it turns out, our alternative topic for this week was going to be a revisiting of a poorly understood equity derivative class traded on major stock exchanges. We’re talking about share purchase warrants. As it turns out, this asset class has been making a come-back within the ongoing series of cannabis company IPOs. So we have a chance to educate you on warrants, while still dipping into what’s happening after the first few days of cannabis legalization in Canada.