Most of the time, things happen when you do not plan to. Although I have decided to invest in equities, I did not know where to start, and did not have a plan on it.
One day at the beginning of 2017, one of my friends was talking about the pot stocks. Since Canada is working on legalizing the use of marijuana through Bill C-45 in 2018, lots of Cannabis related stocks are increasing dramatically. He got multiple stocks on different cannabis related companies and he suggested me to get into Aurora Cannabis Inc. (TSX Symbol: ACB) because it will be the next Amazon in Cannabis stock. At that time, although Aurora was trading in TSX Venture, I still thought that might be a good investment.
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- After the Cannabis Act is passed, there will be lots of people consuming it and the supplies will be increased dramatically;
- ACB was only trading around $3 Cad. There was still lots of rooms to get higher price.
- ACB just passed its highest price recorded ($3.29 Cad) the week my friend told me.
Due to the simple reasoning above, I decided to start investing in ACB for my first attempt.
Disclosure:
I bought 1,720 shares on ACB in April 12-13, 2017 between $2.86 and $2.89 Cad per share in an average of $4,982.10 Cad in total including trading fees.
After I performed more study and research, I realized how stupid I was at the time to make the decision without analyzing any company information and financial. I bought the shares just because what my friend told me. Today, I call this action Gambling, and not even Speculating or Investing.
From the Fundamental Analysis, although the revenue of ACB is increasing, the operating income is still negative. Also, ACB is focusing more on investing and expanding its market capital. Since the operation revenue of ACB is still depending majorly on passing the Cannabis Act, it is not a good investment from my own Growth & Value analysis.
Due to ACB does not meet the requirements of the Growth & Value analysis I set, I sold all my shares in November 6, 2017 when it was rising at about $3.38 Cad per share. In this transaction, I made around $800 Cad. Although I did not lose any of my principal, I considered this transaction a bad investment, and I was just lucky.
As of today January 10, 2018, ACB is trading at more than $13 Cad per share. I could have made a lot more if I did not sell in November. However, as I said previously, to become a successful investor, you have to be more disciplined on how you are investing. Since I decided to become a Growth & Value analysis investor, it is a good practice for me to control myself on not keeping in my mind that I could have made way more if I still kept ACB. I have to force myself on only making decision from the company’s fundamental and financial standpoints, and not from the fortune I have previously.
See detailed analysis in – Analysis – Aurora Cannabis Inc. (ACB).
Continue to – Setting Up an Investment Account.