I address the situation with Sunniva which everyone knows has been falling more rapidly than most in a generally declining cannabis stock market. Believe me I have spent many hours in the past 48 in contemplation of what to do next. I have asked myself all the questions you have asked and more. I have also spoken to and exchanged emails with management. In addition, I have carefully reflected on previous occasions in which a stock badly underperformed my expectations.
Most of you know that in my investment decision making, management always ranks at the top. Sunniva is no exception and this is an excellent example why it is such an important asset for investors. When things do not work out as expected, I am comforted by the fact that people like Dr. Anthony Holler, Leith Pedersen, David Negus and the others I have met are going to work every day. I know they are going in every morning, probably earlier during these difficult times. They are working to progress the Business Plan. And many days of the week they are probably staying later than usual.
Some of you may recall 18, months ago, when Organigram got caught up in the myclobutanil contamination problem. The stock was a recommendation of mine and it was falling in price in a generally strong cannabis market. Although many didn’t, I stuck with management and remained positive. Investors who didn’t sell out then are very happy today. In fact, I just read that Organigram is one of the few cannabis stocks that is up in price since the recent peak in cannabis stock prices in January.
Am I unhappy the stock has gone down in price? Of course I am. I am pissed. Am I sorry I recommended the stock? No I am not! Many people have asked over the years why I do not typically own shares in companies I recommend. It is for times like this. It allows me to assess situations like this with far less emotion clouding my decision making.
There is only one question you need to ask yourself about Sunniva today. Will management successfully follow through on their business plan? If your answer is yes you should continue to own your shares and buy more if it suits your circumstances. If your answer is no, you probably shouldn’t have purchased the shares in the first place. And if you don’t own Sunniva yet, now is a great time to initiate holdings. I remain confident that as long as management continues to build the company, shareholders will be rewarded.
There are signs of panic selling in Sunniva’s stock. People seem to be selling because the stock has been falling and they are afraid it will keep falling. As investment gurus say during trying times like this, two emotions drive the market – fear and greed. We can all learn a valuable less from Warren Buffett who said, “Be fearful when others are greedy and greedy when others are fearful.” The Sunniva market is driven by fear right now and it is a great time to be buying.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.