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The Skill Bubble of ACB, CRON, CGC, APHA

I recently did a video where I talked about how there has been very little skill required to make money trading stocks such as ACB, CRON, CGC, APHA, and TLRY. I apparently did not do a good enough job of explaining for everyone, so I wanted to do a follow-up video and show some actual data. This data demonstrates just how much skill was NOT needed in order to make money. In any other “normal” situation, behaving like some traders did in these stocks is not going to end well, yet… due to the skill bubble in these stocks, these bad behavior traders still were able to make great money.

The video that really caused some anger. Watch it HERE

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Transcript:

Now before anything else,before you start typing in the comments abouthow much of an idiot I am or whatever,please read the title, Skill Bubble,meaning this is not a bubblethat I'm referring to in the sense ofthese companies are gonna go to zero and not exist anymore.I admit I'm on board,I realize that the whole marijuana thing,it's not going anywhere,so that's not what type of bubble I'm talking about.The bubble I'm referring to is a skill bubble,meaning from these stocks,has it really taken any skill to make money?Or because there's a bubble right now in them,is that one of those where you just kinda buy,hope, wait, oh alright, I made money!Yes, it has been that,and that's the type of bubble I'm referring to.So if you are an investor,this video does not pertain to you at all.Let me say that again.If you are an investor and you're saying, hey,I bought ACB, I bought fill in the bankin one of these Canadian pot stocks,for the next 20 years this video is not for you.I'm doing all this because I did a video a few weeks ago,I'll put the link below,and people,it got to the point where I had to go backand watch it a few times because I was thinkingdid I not explain myself right?Because people kept coming backto throw on all those fundamental,look, marijuana is not going anywhere,so how can you call this a bubble?Because that's not what type of bubble I'm talking about.Skill bubble, a skill bubble.And this comment here just kinda summarizesexactly what I was, I thought I was clear on.I wanna be fair, a lot of people nailed exactlythe point I was trying to make,but there were quite a few peoplethat really missed the point,and here is just one comment that shows that."Bailed out?"It's very very early in this."What do you know about the government in Canada?"What a waste video."I'm sorry."Bitcoin and marijuana stock"is absolutely zero comparison."Again they are a total comparison.Bitcoin during the big bubble parktook no skill to make money.You just bought and held and waited,and all of a sudden, hey I made money.You bought, you held, you waited,all of a sudden you made money.That's the exact same thingthat's been going onwith these marijuana companies.You buy, you wait, and all of a sudden it goes up.Now I will fully admit that from a fundamental perspective,they're not the same type of bubble,because I personally think,not cryptocurrency, not blockchain,but Bitcoin is probably headed to zero.But as I already disclosed,I don't think any of these marijuana stocksare headed to zero,but what I do think is gonna eventually level off and popis the skill required to actually make money from them.And I get it at this point you're thinking,well no, it does take skill.Alright that is why I wanna go backand look at a few examples from ACB in particular,but you could apply this to any of the Canadian pot stocks,that's why I have multiple of them in the video title'cause it applies, the general premise applies,but I decided 'cause I was thinking,well, how can I better explain thisbecause a lot of people clearly missed the point.Why don't we just go back and look at actual data points,look at actually how these stocks have traded,again ACB in particular,that really shows there's been no skill required?When you can act and conduct yourself in the waythat I'm about to illustrate to you and show,illustrate is a bad word because that implies kinda theory,when I show you like these are actual data points,this is the past history,when you conduct yourself in this way as a traderand then still make money,that's not how the market actually works.That requires no skill,and the market requires a lot more skill,trading requires a lot more skillthan conducting yourself in the way thatyou could have conducted yourselfwith these trades that you're about to seeand yet had still made some really good money.So let's go to my desktop and you'll see what I mean.Welcome to my desktop.Before I get into the specific exampleswhich are only gonna be a few,I bring that up because just keep in mindas I go through these few specific exampleshow much of this kind of action do you seewhere the price is just absolutely all over the place?And kind of put what I'm gonna talk aboutinto all these other different situations,and it'll come about just that much more aboutwhere skill really wasn't and hasn't been requiredat all to make money.The only thing that's been required to make moneyon ACB and a lot of these other Canadian pot stockshas been bad habits.The bad habits of holding, holding,and hoping and hoping and hoping.That is what has made money on these stocks,not skill, bad habits.And I'm gonna show you exactly what I mean.So here we have the breakout,and this is actually when ACB was still a penny stock,but it goes up, the volume surges,so potentially some people are watching it.And then that next day the price goes upand hits a high of 89 cents.So it hits a high of 89and that line will just kinda represent,and let's just say people bought up at 89.People chase, bad habit number one,people chase the price up, bought at 89.Sure they could have bought at 85, 86,but they bought up around the tail portion hereof the upwards move.And then let's see what happens.Well, not only on that same day does it collapse,but it collapses some moreall the way down to a low of 60 cents.That implies you heldthrough a movement of 33% against you,or in other words 1/3 of your account,1/3 of whatever you put into the trade,as far as an unrealized loss was concerned was gone.1/3, 33%.Bad habit number one, chasing.Bad habit number two,literally holding holding holdingand letting a position move 33% against you.But because these are just in a big bubble right now,skill bubble,you can see that, look at that recovery,remember the green line represents,and look at that,people would be back in the green,and then look at that beautiful move.And once again people could be saying,I am great, look at all this money I have made,look at that huge move.And you know what?Congratulations on the money that's been made,but let's keep in context what actually ledto that making of the money.You chased the price and then you heldthrough a 33% decline against your position.Yes, I realize the end result was some very nice money,but is this what's normal?Are you allowed to usually chase,let a position go 33% against you,and then come out making potentially 100 up percent?No, that is not normal.Same chart, ACB, let's look at another example.So again you've maybe made that first trade,I'm awesome, I'm a great trader.Oh look, this thing is starting to come to life,again buying kicks in,so the next day you go up thereand once again you buy up at the high of $2.96.So let's put that blue line up thereand that'll make sense as we go further,'cause as a little spoiler,it's gonna be a while on this one,but 2.96.Now I get it, well, I've never bought the top.That's not what I'm trying to convey,I'm trying to convey chasing.So whatever you bought it,2.60, 2.70, 2.80, 2.90,the point is that is chasing,that is not how you trade,that is not how you get good entry points.So don't look at it as, well, you're just taking extremes.No, I'm just trying to illustrate the wide window.But if you're anywhere within the rangeof these windows that I'm talking about,for example the previous one, 33%,okay, let's say you let a position go25% against you, 20% against you, that's crazy.To chase and then let a position go20% against you is crazy.Any professional trader is gonna say you did what?Yeah, no, that's not how you trade.So don't look at the extremes,just look at if you're anywhere close to these windows.But for this, like I said,it went up and hit a high of 2.96.So let's see how this one played outbut I kinda spoiled it,but yeah so just keep in mind where that blue line is,and let's just keep on going.So this is the daily chartsand now we're looking at months,we are holding and holdingand hoping and waiting and waiting,and now that blue line is gone.So let's just keep on going,and literally the weeks and months continue,continue, continue to go by, to go by,and like I said, literally,look at all this time,look at all this time,it just continues to go by.And here you go, things start to wake up again.So let's put that,we'll call it the blue line tradein the back of our mind.And let's get another trade,so another group of people,maybe they're brand new,maybe they have made some other trades or what have you,but again they see, oh look, volume is kicking in,and the price is waking back up,so they'd go and the next day they go and chaseand they get an entry point up here, oops, at $2.65.So they buy and then of course that same day it collapses,so they chase and now they're holdingand letting the price go against them.But let's see how this continues to play out.So now those people, big old pullback is occurring.And remember don't forget about the blue line traders,those people, talk about a tease,they got up kinda close to where they werebut then no good and it's pulling back on them again.So just the price falls and falls and fallsand falls and falls and falls and fallsall the way down to a low of $1.40.So at this point the blue line tradershave literally not only chased,not only just held and held and held and held,but now they've let it go literally 53% against them.So they chased, held forever,and have allowed it go 53% against them.What about those pink line traders?They've allowed the price to go 47% behind them.Now I guess in this case the pink line tradersare a little bit better because, hey,they haven't held for nearly multiple monthslike the blue line traders,they've only had to hold and hope, hold and hope,for just a matter of a few weeks,and it's only gone 47% instead of 53%.But keep in mind these two traders,I mean one is 53%, the other 47%,they both chased,but let's see what happens.Things start to come back to life.Little pullback there.There is that pink line coming back into play.Pink line, oh, and look at that,just like that, boom!Oh I got, look at, oh,I have so much skill as a trader.Look at all this money I'm making.Oh my goodness.And up it goes and now all of a suddenthey have potentially madewell over 50%, 60% on the trade,and they're just I'm such a good trader,I'm such a good trader.Yeah maybe I didn't get the best entry pointbut I'm such a good trader.Keep in mind, trader,I'm not talking about those that are investing,but I am talking about those people that went into it,and you know in your heart of hearts,you know if you're being honest,if you went into it and say,okay this is a trade,and then all of a suddensomehow you rationalized it intooh no I mean this is an investment.That's not how you do it.If you tell yourself somethingthat it's a trade when you go into it,it better stay a trade,because a trade that you are wrong aboutand then you justify not wanting to take the losses,well, actually it's an investment,or I'm gonna turn this into an investment.That's amateur stuff right there,and don't take my word for it,ask anybody that's traded for a long time,professional trader.Is this good if I tell myself something is a trade,but then I see that I'm wrongso then I just rationalize it and tell myself,well no no, this is now gonna be an investment?Like I said don't take my word for it,go ask anybody if that's how you're supposed to trade,allowing, quote unquote, "trades"turn into, quote unquote, "investments."Now like I said if in your heart of heartsyou know going in that you're likeno, this was an investmentand it's an investment here on out,then fine, you are not who I'm talking about.But you also know deep downif you told yourself something was a trade,and then all of a sudden you allowed itto turn into an investment,and here you go, oh look at this,it worked out great, I'm a trader.And it's amazing how those people would sell there.I thought wait a second, but I thought it was an investment.Amazing how trades go to investmentsand then investments also are gonna turn back into trades.Like I said, for some of youif you're being honest with yourself,you know exactly what I'm talking about.And to kinda finish the moral of that story,you can see it went up even morebefore starting to pull back once again.Let's go through another one.Here you're saying, you know what,if it can break through these highs,I wanna get in.First off from a trade perspective,okay, I see your logic.You're looking for a breakout trade.That's fine.A breakout trade.Okay, I see the rationale.I mean I'm not gonna argue against that.So right there the breakout happensand you buy the breakout.So here you didn't even chase,you bought the breakoutbut then all of a sudden,uh-oh, not looking like the breakoutwas actually a true breakout,and that's okay, nothing is guaranteed.Just because a price breaks a certain leveldoesn't mean it's for sure gonna be a breakout.However so there's no chasing in this one,there's just you bought according to a planof I wanna play the breakout,but then it doesn't really break out anymoreand it starts to fall,and now all of a sudden it's, well,actually this is an investment,I'm just gonna hold and see what happens.So let's see what happens.And yeah that breakout fails and it fails some more.And then it just rolls back on over and down it goes.And you're holding and holding and hoping.Remember it was just supposed to be a breakout tradeand now all of a suddensomehow some traders are still in this thing.And down it goes more and down it goes more.And down it goes even more and down it goes even more.So right there a low, let's see, what was that low?4.05.And here we are again.You let lies, a logical trade plan at the beginning,I'm gonna buy the breakout all of a sudden turned intoyou have now let the position go 49% against you,and sure this one is, quote unquote,"only been a few weeks"where you've had to held or holdcompared to that blue line trade,but still.The orange line traders started off well,I wanna play the breakout,but then all of a sudden,is there any skill here?No.A trade plan that failsand then holding and holdingand holding and hoping,that's not a skill,that's a very bad habit,that's gonna eventually get you burned.But as you're about to see in this case,well, I think you're gonna figure out what's gonna happenjust because these stocks have not been normal,they have been the skill bubble,and these are what skill bubbles look like,where they allow somebody to buy a breakout tradethat not only doesn't break out,it absolutely collapses to the tune of 49%,but because they've deployed bad habits and hold,look at that, now all of a sudden they're making money,and they're making a good amount of money,I mean they just made once againa great percentage on that tradeespecially it keeps going up and up and up,and now we have our final trade.So these people go or these,the momentum is going, it gaps up,that's certainly gonna get people excitedwhen it gaps up that morning run,and then some people buy up thereright around the 12.50 mark.So again we're back to people getting hyped up.That morning you're watching the level two's,oh wow this thing's gapped up,I guarantee you social media and the message boards,everybody is all excited about it,so you get caught up in the hype and you buy.And you know what,there's nothing wrongwith getting caught up in the hypeas long as you admit quickly,oh crap, I got caught up in the hype,I better just bail because I totally chased,I got caught up in the hype, so shame on me,but at least I kept the loss minimal'cause I shouldn't have been hyping it upor I shouldn't gotten caught up in the hype and chased.So again now you don't wanna get caught up in the hype,but it's okay to get caught up in the hypeas long as you quickly realize and admit to yourselfI just got caught up in the hype,that's not how you get a good entry point,because this is a trade,so I need to just get out.That'd be a good habit.We're talking about bad habits here.So again people got caught up in the hype,uh-oh it pulls back.And what are people thinking?Okay, well it's come back every single timeso I'll just hold and wait.And here we go all over again,the collapse happens and down it goes,and down it goes some more,and then it gets below of, let's see,right there which was, what is that low?$4.58.This represents allowing the positionto go against them by 63%.They got caught up in the hype,they chased and now they've held for multiple weeksand have allowed it go against them for 63%.So let's just keep on going hereand I'm gonna speed this one up.So now that line is gone.There is a move up.And this is present day right here.Those people are still inas of the recording of this video right nowwhich is March 25th of 2019.So this will also be kind of a real life case study.What has happened since here?Did these people, did the yellow line traders,did they ever get bailed out?Did those bad habit people ever get bailed out?Or are they finally now reaping the consequences?I have no idea.It very well, like I said,these stocks still seem to be in that skill bubble,so maybe it will bail those people out.That magic line for them is again up there at $12.50.So we'll just have to wait and see how this all plays out,but as of right now those peoplethat got caught up in that hype,got caught up in all that,they have been holding,they have allowed the priceto go against them by 63%.Sure it's no longer 63% against thembut you get the idea here.What are their habits?What kind of, quote unquote, "strategies"are being deployed to make money?So we'll have to see what happenswith this going forward.Like I said, the recording of this videowas on March 25th of 2019,so maybe when you're watching this,you can go back and seedid these people get bailed out or not.So we'll go back to me in person to wrap up this video.So there you have it.I mean really holding throughthose sorts of percentages moves?33% 50% 60% against you,and then all of a sudden you make money still?Those aren't good habitsand that is just not how trading actually works.And as we ended, as of the time of this video,that one group of traders, they're still sitting there.And to be fair, maybe they'll get bailed out again,but that's just gonna go and further prove thatthere's still the skill bubble that exists,and that right now people are building a lot of,they're getting a lot of confidence from faulty mentalities,because when you can, like I said,conduct yourself in this wayand yet still make money like you saw,that is just not how things actually work.So be very careful of the skill bubble.And please don't go in the comments sectionand start talking about fundamentals.I have already disclosed,I've already admitted that from a fundamental perspective,there's no bubble where marijuana is just gonna go awayand all of a sudden all these companies are gonna zero.That's not the type of bubble I'm talking about.A skill bubble, and like you just saw,that doesn't take any skill to make money.And that's a wrap.If you are out there trading alone currentlyand maybe you are in the marketlooking for a community to jointo assist you in your tradingor to just help you give you another set of eyeballs,then I do have a private trading communitywhere you can trade alongside meand other experienced traders.So what you see popping up on the screen right nowis both an information link,so if you click on the inner circle one,that is gonna take you to the pagewhere I explain all the detailsof what exactly come with the communityboth the chatroom and the newsletter,and then the other image that has popped upis a behind-the-scenes tourwhere you can see exactlywhat is going to be contained within the community.I take you through, like I said,a behind-the-scenes tour of everything,and that way you'll know preciselywhat you are getting when you join.So definitely check that stuff outif you are interestedand thinking about wanting to join a community.And let me know if you have any questions.

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