So as many of you know Medical Marijuana Inc. has taken investors for quite a ride this last month. Starting out at around $.24 and rising up to $.50 before falling back to in the 20 cent range. There have been many outraged and naive investors refusing to hear any negative news on the company, and at the same time also many pretentious ones presenting opinion and predictions as fact while dismissing the company's relevance. The truth is…this is the OTC PINKS for you ladies and gentlemen! The PINKS are not regulated by the SEC, which any one who invests in them should already know. Without strict criteria for financial reporting and auditing, speculation can run wild. Because of this, people are able to publish articles without any evidence making outrageous and slanderous claims like a company is "cooking the books," and so forth because no one truly knows one-lick about what's going on. Unfortunately without a concrete foundation for companies to stand on, unsubstantiated claims and speculation can be published practically anywhere on the Internet, by anyone who owns a keyboard, and their babble can subsequently rock a companies share price. Stock prices in the PINKS are highly speculative and movement is closer tied to volume. How news affects the regular stock market, multiply that by 10-100 and that's how it affects the PINKS. When investor confidence is strong volume and price go up, and vice-versa. This is what we got to witness first hand this month.
Medical Marijuana Inc. has done nothing but built a solid successful business, which has been able to pump out impressive revenues, and maybe small, but positive cash flows at a relatively young age. In reality they have done nothing negative themselves, its all been investors. Investor slander, and investor overconfidence. The term "Pump and Dump" has been thrown around. Yes MJNA fell victim to this. However it's not on its own accord. Massive volumes and positive company news caused investors to buy, as they should have. The price might have become a bit inflated, no one can say, and anyone who tries to like it's a fact… slap them, look at them in the eyes and say "you aren't a prophet." What is certain, is that if it wasn't for the questionably slanderous post that surfaced last week, and then the subsequent negative articles riding its coat tails, MJNA would not have seen its 50% plus dip that some of us are pulling our hair out over as we speak. What WOULD HAVE happen was investor confidence would have remained unscathed, people would have continued to buy and the price would have continued to rise. It would have hit a higher price, that would have been undoubtedly inflated, and then it would have started a decline until the market CORRECTED ITSELF. THAT would have been a real "Pump and Dump" not the tainted, manipulated, and borderline criminal one we all had the pleasure of watching, which subsequently left poor MJNA lying on the floor mangled after getting roofied and violated by negativity.
Some of the negative contributors should in fact be resented, especially if their actions were done to manipulate the market, as opposed to their inflated egos tricking them into believing they could tell the future of a company with un-audited financials. I'm going to insert a personal message: If you short a stock and produce negative information that is speculative for your own gain, you are scum, you are a thief, and cause damage upon people. The market is big enough for everyone to prosper, don't mess with other people's money.
The PINKS are not for the faint of heart. They are arguably the riskiest investments you can make. I can't think of a single investment that would claim standard deviations higher than PINK stocks. So head caution when investing, and also don't feel like it's your duty to "save" anyone by expressing your uncertainty. It's the darn PINKS!!! Of course there's uncertainty!! If your looking for certainty, go invest in Coco-Cola and collect dividends. By trying to save people with information that goes hand in hand with PINK stocks, you will only scare uninformed investors, cause the price to go down, and in turn hurt more people than you saved. On the flip side of that coin, the second you start hearing negative rumors on the PINKS, its time to get out. At least for the moment while the jokers and thieves work out their problems.
For lack of better terms, there are always haters. The fact is we are in the midst of something special that only comes around maybe once per generation. We are in the midst of a new industry, or at least the development of its market. Yes boys and girls I'm talking about the reefer…pot, weed, dank, nug, skunk, kill, bud, dope, sheeba, buda, devil's lettuce, sweet sweet sensi. Anything with that many names has to be popular. Historically it's got a stigma to it, due to tight butt homosapiens, so the birth of this industry will probably see more haters than most, but it's inevitable. I'm writing this from Texas, one of the most conservative places on earth, and its clear to me it's coming. This industry's potential is almost unprecedented. It'll be like corn, you can use it for everything; recreation, health, medical, textiles, clothing, food, fuel, industrial hemp, and more. Now is the time to start investing, but wisely.
In my personal opinion, MJNA is a darn good company. Those are some smart stoners over there let me tell ya. They're highly diversified, and seem to have good management to have made it this far. They have a firm foot down on ground zero. Their profits will already continue to grow, that's inevitable, but as legislation perpetually lifts on all forms of processing, they will be in a better position to capitalize on opportunities, than people who waited until everyone else said it was ok. Moments like these are what people in finance dream about. This has the potential to be bigger to than cotton, tobacco, and corn. Even opponents of marijuana who deny that are borderline delusional and probably have some issues they need to resolve. Its up to you to do your due diligence and invest in the right companies.
MY PLAN & disclaimer: First off I'm a few weeks away from being a Dean's list graduate finance major. I'm through the thick of it so if any nerds want to test my knowledge go ahead. I've become well versed in the public marijuana affiliated companies and I plan to hold a few in my portfolio. MJNA is certainly one of them, however I'm waiting to buy after all this smoke clears. I understand it's a risky investment and that a week after investment I might be in the red, but what about a year from now? 3 years from now? I'll take that bet any day. I'm going long, and will be watching for pumps and inflation, to pull and re-buy if need be. Last pick of mine was Sprint, before a soul was talking about back around 2 bucks, you guys can look into how that went. Its still a good pick too, personal recommendation of mine. May you invest wisely and prosper. And if you're thinking about purposefully manipulating the market for your own gain, do us all a favor and wipe with sandpaper next time…about 40 grit or so.