During times like this, there is one thing I want you to know…

Editor’s Note: Trading was halted for 15 minutes today (March 9) after the S&P 500 index dropped more than 7% in the first few minutes of trading. In the report that follows, there is one important thing Executive Director Don Yocham wants you to know.

I don’t have to tell you that, with over 100,000 reported coronavirus cases (COVID-19), investors are worried about risk right now.

That’s because risk is technically a future event with an uncertain outcome. Most people hate uncertainty.

It’s causing investors to sell their stocks because there’s no way of knowing how much the coronavirus will impact businesses. Car companies. Hotels. Airlines. They are all affected by what is happening right now.

And rather than waiting for an earnings report or a company update to see how COVID-19 has impacted the bottom line, investors are trying to gain a sense of control by selling stocks.

They may sell stocks and stash their money away until there is more clarity. Or they may be looking to buy silver and gold.

I get it.

And I don’t want to take away the seriousness of what’s happening.

But throughout my 25 years of investing, this is the biggest lesson I learned…

Keep Calm

With COVID-19, no one knew it would come into existence.

Now, one response to that statement would be that “a pandemic like this was inevitable, it was only a matter of time.”

Well, yes. A virus that turns into a pandemic was inevitable.

It’s happened before. It’s happening now. And it will happen again.

But pointing out the inevitable is not a prediction. To be a prediction, one had to know when it would start, how far and fast it would spread, and how long it lasted.

I could say that a fish will jump out of the lake and into a boat. But unless I provide some specifics, like whose boat, which lake, and when, it’s an empty statement that’s impossible to act upon.

And even now, three months after the first case, it’s impossible to predict what course the disease will take with any meaningful level of certainty.

It could burn out as quickly as it started, or economic activity could get cut in half for months.

Who knows?

I’ll tell you who knows. No one.

But this is the one thing I’m certain of – letting panic drive your actions only creates more opportunity for those who keep their heads.

“If you can keep your head about you, while everyone else is losing theirs and blaming it on you…you will be a man, my son.” Rudyard Kipling, If-

You can’t bury your head in the sand and wait for it all to pass.

In fact, it means quite the contrary.

Keep your head up and pay attention.

Take care,

Don Yocham, CFA

Executive Director, National Institute for Cannabis Investors


Comments

22 responses to “Keep This in Perspective During the Coronavirus”

  1. Thank you for that Don, I’ve never invested in stocks up till a couple of months ago (about three weeks prior to the Coronaviris incident ).

    I only owned mutual funds. So this is what they call the ‘wild world of the stock market‘. Heard about it but never experienced it. What I do and it’s easy for me to do. I don’t know why I don’t know why. When the stock market is in freefall on a
    ‘temporary’ basis, I pay no attention to my investments. In fact, I haven’t even looked at them for at least two weeks now….. When the virus has been eradicated, I’ll log in….

  2. I’m a little bummed. I had a stop-loss order on one of the recs and I was too late in removing or lowering it today. All of my stock completed their short-sale cycle around the sun, automatically… I’m not doing too well on the recs I’ve chosen, and unfortunately cannot afford to pick more than 2 or 3. On the other hand, this the whole point of limit, or stop-loss sales. I put in the numbers to protect myself from too harsh of losses. I guess you have to draw the line somewhere or what’s the point? Blort.

  3. Good advice Don. Taking an action in panic is like gambling. All we can do is invest in good companies and let the market do its thing. Perhaps with all the anxiety our Cannabis demand my increase! Bob

  4. I Started my Cannabis portfolio about 6 months ago after retiring a year ago. Of course those stocks are now worth less than half the price I paid for them. I am now taking advantage of the recommendations you folks are making recently and grabbing up the bargains. I am planning on waiting at least 5 years for fruition. I assume that current POTUS will be re-elected and at least a few more states will turn green in November. I also assume that the Left will again take it’s turn in the White House 5 years from now with a potential for the whole country to finally embrace legal cannabis. Any chance of getting some insight on the highest risk stocks that were previously brought to our attention by NICI?

  5. Don, I would be interested in your thoughts regarding which of our portfolio stocks you would be targeting first for purchase when this whole thing bottoms out. Thanks.

    • I’m long on CBD. I think it will boom in 3-5 years. Therefore, I think Charoletts Web (CWBHF) is a good bet when it bottoms.

  6. Remember you don’t lose your Money until you sell! Hope you can weather this down market and purchase some bargains along the way. HAPPY INVESTING!!

  7. I don’t understand why people panic, about something that has nothing to do with the stock market. What a virus is going to completely drain the stocks. It’s rediculous, should be buying is what everyone should be doing. If they did that the stocks would rise.

  8. I have been investing in cannabis stocks with you since October of 2016. I have been through “Phase I” as you refer it as. I’ve seen my ups (October 2018 and March 2019) and then I’ve seen it’s downs (basically since March 2019). I have ridden out this and got rid of my “dogs” which there were quite a few. I have exited “most” of the cannabis market and other stocks (from Nova-X Report) in mid February of this year, holding 80% in cash. My 20% has taken a hit, but I know it’s just on paper. So I think I’m in a good position now to see the long-term advantages of your recommendations and can’t wait until this virus rids itself of our world and the market. I have about a 8-10 year wait until I start taking out of my portfolio for retirement. Best thing I can recommend is buy through this downturn little by little and you will dollar-cost-average all of your buys. You will not regret the move(s) and can’t wait for “Phase II” because it’s knocking on our doorsteps! Best to all of you and keep the faith.

  9. This is only paraphrasing but remember what Warren said: be fearful when others are confident and be confident when others are fearful! I’m grabbing as much as I can afford now! It’s all on sale!!!

  10. Thanks for the quick pep talk. I am a natural risk taker and I see a silver lining in jumping on values right now, but do you see any worth taking advantage of?

  11. It is always the smart thing to place a stop-loss. Stocks can plunge rapidly and take a long time. If ever to come back. There are many traders who wished they had one.

  12. Totally lost it last night. I became so full of fear I was dumb struck and dysfunctional. My stocks and my income from Abnb both, cancelling out and I freaked. However, I found your words comforting and spot on. Had my little powerless fit, it’s over and I’m glad I got that out of the way. You brought me back, thanks!
    K

  13. Can you please comment on what is going on with Dixie and a reverse takeover?
    So much happening, with numerous firms at risk of going broke, like TGOD. We need you to keep us updated, so we minimize impact.
    Please keep us updated!!

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