Today, I will be covering how emotions can kill your gains and how I also went wild with my emotions while investing. Hope you enjoy today's video. GameStop, AMC, Tilray, Canopy Growth and Aphria, these are the few stocks that have appeared in WallStreetBets where weed stocks seems to be the hype recently. But definitely, you need to have an exit plan or else the stock prices will drop even before you can sell it. Reddit have seen some people still holding onto GameStop even though they bought it at it's highest point and currently as of 19 Feb 2021, the price is at US$40.59.
Locally in SG, DollarTriumph wrote a very good 2-part series article that I hope everyone will read, I will put the link in the description below. He was very honest which I feel that most people including myself sometimes only post about profits/good news but actually it is the losses that make you learn the most. In his 2nd part, he wrote about how he got burnt buying GameStop. For me, I bought into AMC and then Aphria although at very small amounts, they are both currently in the red.
AMC Entertainment Holdings Inc (NYSE:AMC)
AMC Entertainment Holdings, Inc. is an American movie theater chain and they were impacted by the pandemic as closure of all of its theaters was required. They faced many difficulties due to restrictions and that they might deplete all their cash by end 2020 or 2021. During the 2021 GameStop short squeeze, AMC's stock experienced rapid price increases.
As mentioned in my previous video, having a plan when investing is important. For me, I will have to admit that I went off-course for a moment and put some of my money into reddit stocks to make money. But my purchases into them have proved to be losses so far. One stock that I bought into was AMC, what made it worse was that I bought it in when it was around it's highest, I remember opening my reddit app and reading up on what they were going to buy next and when I saw AMC, I went on to buy 2 units each at a price of US$19.90 through tiger brokers. Then things started going downhill as markets open and currently as of 19 Feb 2021, AMC is priced at US$5.70. Currently having quite a loss but since I only bought 2 shares, the most I would lost is about US$40.
Aphria (APHA)
Another stock that I bought in based on reddit was Aphria, I first heard of weed stocks and saw that Tilray and Aphria might be merging. Tilray is a Canadian pharmaceutical and cannabis company, incorporated in the United States while Aphria Inc., headquartered in Leamington, Ontario, is an international producer and distributor of medicinal and recreational cannabis. Hearing that Aphria is one of the largest cannabis companies in the world as well as being listed on the Toronto Stock Exchange and NASDAQ, I was naturally interested in it. With news as well on the merger with Tilray in December 2020, I did see a lot of hype on it on reddit. But I went in when it was at it's high.
I saw a comment by a redditor and it really jolt me up. He said something like once its big on reddit, it is either people are ready for a pump and dump because if it isn't big yet, it wouldn't be on reddit. I would have to say that also because I was chasing after returns by not even checking the things I am buying into. Also, due to the no comission trades on Tiger Brokers, I just recklessly put my money in. So I bought 1 unit of Aphria at US$30.96 and currently it is valued at US$20.25.
Gambling? Too focused on short term gains, get rich quick method
As I hold on to the 3 units which I thought was a small amount, it slowly added up as I felt like I was aimlessly putting my money into random stocks that I thought would go to the moon. It was definitely different from my plan and I should not be continuing on. I have to admit that when I bought these 2 stocks, I wanted to get rich quick and flip my money and get it to a 10X or maybe into a 100X. I was so consumed with getting the quickest growth that I was just reading through reddit and so many supporters were roaring for the growth that I was too swayed by emotions. I let my emotions take over and just press the 'buy' without much thought.
I was so engrossed in reddit about these stocks that I had to log on a few times each night hoping to catch the news. Eventually, I realised that this defers so much from my original plan of investing which is to have a regular savings plan and with the extra cash aside, continue to buy stocks that I am familiar with and have conviction that over the long term, they will grow.
With that said, as always invest with a plan and appreciate if you subscribe to my channel and like my video if you enjoy the content that I am putting out!
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References:
https://en.wikipedia.org/wiki/Aphria_(company)
https://www.marketwatch.com/story/tilray-stock-loses-steam-as-analysts-say-company-not-compelling-as-stand-alone-business-look-to-aphria-deal-11613674314
https://en.wikipedia.org/wiki/AMC_Theatres
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