Trade: Canopy Growth Compan (CGC), Disney (DIS)

On October 19 I filled another third of my expected position of Canopy Growth Company at $48.50.  At the time I placed the order, the stock was showing a strong floor in the $45 - $48 range and was really struggling to get below $48.  Given the stock had recently run up to the mid-50s and Canada's prohibition ended two days earlier.  I felt the amount the stock pulled back seemed reasonable on the sell the news situation and dove in.  We now know that choice was rather early, given the stock is now in the 38s after having hit as low as the 36s.  Given the current market conditions and overall chart health, I'll be sitting back for a bit to see when/where this stock stabilizes before I think about filling my position.  $35 is certainly a price area of interest, but I've also read that the stock could get down into the 20s.  It's important to remember that a huge portion of this company's value is in cash from investment from Constellation Brands.  That money will go into further investment in the company as it buys up those that fail to do well in this surge to serving the pot market.  So the value is there and the amount the stock has dropped is a bit surprising, given this.  One can only be surprised for so long, though, and discipline needs to come through to provide me a chance to be profitable in this speculation.

On October 24, I took advantage of a broad market selloff to buy up some Disney shares at $115.25.  This is the second third of this position as well and while I thought I was being smart, getting the stock multiple percent above recent high level, little did I know what was about to happen shortly after the purchase.  While I was aware that I was buying above my cost basis, the stock had shown strong resiliency during a time others were getting beat up.  Seeing the stock down this much seemed like the opportunity to take, given that strength.  The stock proceeded to get back down into the $111s the next day and currently sits in the $113s.  I do anticipate the stock pulling back again and am looking at prices around $110 in order to fill my position.  In relation to this, I also infused some funding to help me through this down market - mainly because Cedar Fair (FUN) has been beaten into the $40s as a result of this market selloff.  The company reports on Tuesday and I expect this will give me the knowledge I need regarding selling immediately or waiting.  At this point, though, it doesn't make sense to sell at these lows.

The markets are tough right now and I think the lesson is that I may need to buy smaller positions at times like this.  It seems hard to do when you have to deal with transaction fees on these small amounts, but if you buy too much of a position in volatile and generally negative times like this, you could also really hurt your cost basis.

Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

Nothing on this site should be taken as advice, research, or an invitation to buy or sell any securities.  All views expressed are solely of my own and I am not a professional money manager.  Please consult with your financial adviser before taking any action in your own portfolio.