[bdub]

I really wish you would because I do enjoy a good debate!

Hopefully you are buying stocks based on these metrics you speak of but dont care to share.

These aren't tech stocks and this isn't speculation. These stocks aren't for everyone, but they are for me.

My favourite Warren Buffet quote: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”


Sounds good, I appreciate a friendly debate to discuss and share differing points of view.

I will start by focussing on the medicinal side and how I would think about it from the point of view involving the weed producers and the pharmaceutical companies involved in the field and then tie it into how I would think about their valuations.

From the weed producer aspect, I would question how much demand will come from the medicinal side. Is there enough demand for weed that supply will be crimped? I don’t think so. Looking back in history again (it’s a pretty good teacher), we could look at something like the invention of Aspirin. At the time the active compounds were produced from willow bark. (I am not aware of any big speculative fever at the time that sent the prices of willow trees into bubble territory.) And before long scientists developed other sources besides willow bark to produce Aspirin from. And not to long after that they found other compounds that worked better to compete with Aspirin. So from the producer side I have a hard time making a case that the medical demand for weed will cause supply issues. Weed is only an easy to grow plant, much like willow.

I completely agree that cannabis may have many benefits to mankind on the medical front. As an investment thesis on the pharmaceutical side, I would then compare the companies in the weed space to other pharmaceutical companies and value them off of metrics involving sales, cash flow, debt, efficiency, liquidity, discount rates, value of intangibles, management ability, the companies pipeline and so on. I would also have to consider political, legal/regulatory, social risk, competitive risk, macro-economic factors, demographics, and so on and weigh the risk/reward.

I love your Buffet quote at the end, unfortunately it is rather hard to follow in practice. Most investors follow the exact opposite approach and that is the cause for bubbles in the first place. The human brain is hardwired to buy high and sell low unless you can keep the emotions of fear and greed under control.