Growth Portfolio (Let’s Roll The Dice)

We wrote about our defensive stock portfolio recently and today we want to look at the other end of the spectrum: speculative and high growth stocks. We caution that with high growth comes high risk so keep that in mind when deciding whether to invest. Of course, this is true of any equity even for ones considered “safe” investments, anything can change at any given moment to cause losses to happen.

While most investors are looking at tech for growth, we see opportunity elsewhere. We have been monitoring the high growth of stocks in the marijuana sector. These equities mostly trade in Canada but from most of these stocks inceptions, they have grown considerably although many of the stocks have declined recently we wanted to take a look.

On November 24, the Motley Fool reported that Sundial Growers (SNDL) would be initiated a share buy back program. And there was this little gem too:

The company’s Q3 numbers showed Sundial coming off a record-setting performance where it posted an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) that topped CA$10.5 million, versus a loss of CA$4.4 million just one year ago.

Motley Fool

We were impressed with the recent numbers so we opened a position in the equity and will hold long term.

There has been growing acceptance and demand for alternative medications to treat various ailments and we think that trend will continue. During Covid, people were opting to take parasite medication (Ivermectin) instead of the various vaccines available is just an illustration of how alternative medicines will continue to grow in use over time.

As the American and global population continue to age it will grow more dependent on medications of all varieties to maintain a good quality of life and treat various illnesses and ailments from cancer to depression to chronic inflammation and beyond. The most interesting new developments, in our view, however are in the treatment of depression and psychiatric disorders using substances derived from mushrooms such as Psilocybin.

We opened positions in some Psilocybin stocks including CYBN and MNMD given they trade fairly cheaply and have huge potential for growth if their efficacy pans out so we’ll keep you informed. It

RISKS

Before you invest, you should be aware of numerous risks with these stocks. First, governments around the world can easily change their mind and take something legal and make it illegal and political parties change all the time during election season. In this scenario, these stocks could easily end up worthless. Second, there is also the chance that the use of these drugs falls out of favor for more conventional medicines. In either case, these stocks may become worthless.

DISCLOSURE: Econonaut member(s) have positions in SNDL, CYBN, and MNMD.