By Charles Roques
Sometimes the most difficult plight of new investors in the cannabis sector is to know where to start learning and what information to trust. If you are planning on investing long-term, it is important that you learn as much as you can about the companies.
With current cut-and-paste technology, compiling a file about a company is easy, so start with basics, add on from there, and you may be surprised at how fast the information grows. There are a number of websites reporting news and developments in cannabis research and investment; however, they are not totally unbiased, but your knowledge search should be, so read several sources to start choosing companies to investigate.
Warren Buffet has said to never invest in a company you don’t understand. That axiom could extend to knowing the product as well. So what if you already know the product? Many long-time users may take for granted the benefits of cannabis, seeing as it’s something that they have always accepted, yet serious study is going on that expands our understanding of these familiar benefits.
One revelation that many long-time advocates may have is that they’re already quite knowledgable about this plant. The long-time discreet users and advocates may have become experts about their product without even knowing it. Many of the recent scientific discoveries about the benefits of cannabis have long been embraced by users.
In spite of a lack of legalization, experimentation has continued over the years and a counterculture has thrived and evolved, along with new information. Users and advocates have devised interesting and innovative means to consume their beloved cannabis plant.
Assuming you continue to expand your knowledge and study about other important factors of the companies, you may find this an excellent building block to propel your learning about what some of these companies actually do. You might also see it as a slight advantage in that you already know some of the possibilities of this plant. You may even discover you understand what they are talking about in more scientific explanations of medical developments.
The possibilities that cannabis holds from a medical standpoint could easily reflect the potential investment possibilities. So don’t underestimate the limits of your expertise or the benefits of the bud—you may be well-versed. Belief in a product has created many companies. It could create a large base of investors too.
What might be underestimated in this sector is how diverse it may be. The plant seems to be spawning as many ancillary companies as it has medical discoveries. To only read and judge by the numbers will prevent you from learning about some interesting products and services related to the sector.
You should never assume that because you are an expert in cannabis that you will be one in investing, but at least you are starting from a valid and important premise, so now you need to fill out the rest of the picture. The premise is not wrong, but incomplete and needs more information. Part of long-term investing is belief in the potential of a company. If there were ever a product with potential, cannabis is certainly it.
There are plenty of books and online information about investing based on historical and traditional factors. But for a sector as new as this, there really isn’t much of a history yet so you will not find many, if any guides. You are recording that history as you compile it. You are your own guide book at this stage. And if you really want to learn, become your own expert.
This sector is evolving and so is the information about it. If you are confused, you are not alone, but this should not dissuade you, only make you more cautious. You know the product so learn about the company. Even companies with great products have to be well managed to grow and achieve profitability.
Knowledge grows along with the company and long-term investing implies in its name that any information about the company needs to grow as well to help keep your understanding up to date. You shouldn’t expect long-term earnings from short-term learning. Most products or services evolve with modification and improvement. Let your information and the evolution of the company be your guides and let them evolve together, building the history.
At this beginning stage, never assume any of the companies you are starting to research are worth investing in, no matter what a chart may display. Make your knowledge the reason you start to invest and give yourself a learning period, a valuable commodity in this early stage of inexpensive share prices that won’t last. You’re in class, not on the trading floor. That is important now in this unpredictable sector. Investing wisely is not just about money invested, it is about the time you invest in learning as well.
The possible paradox of long-term strategies reaping short-term benefits once legalization passes is one of several unique elements of this sector; however, a potentially large field of new investors who may already be “experts” about the product may be one of the most intriguing elements.