# Biggest cannabis IPO of the year: Emblem Corporation (EMC)



## familyman (Apr 6, 2015)

Besides oil stocks, apparently the hottest thing out there now is cannabis stocks. With the pending legislation of marijuana, I wonder what are people's thoughts on this new industry? 

The biggest IPO in marijuana this year is Emblem Corporation (EMC), which just came on the market Dec. 13. The CEO is the same dude that released Oxytocin, and even though they haven't really started showing profits and such (estimated to be within 9 months), apparently they're supposed to be the hottest thing in town. I wonder how many people are following this industry and what are people's thoughts on where this is going? I don't know much but just started researching and apparently the official legalization is supposed to be in Spring of next year, and things should really take off from there...

http://countingpips.com/2016/12/why...ext-big-thing-and-why-emblem-is-our-top-pick/


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## Just a Guy (Mar 27, 2012)

This market is "hot" because of fad investing. People know something is going to happen, think internet in the 1990's, so are throwing money at anything to do with the industry (remember how changing your name by adding ".com" to your name could double your value overnight?) and hoping to make money.

This isn't investing, this is gambling. When the music stops, you'd better have your money off the table (refer to the "dot bomb" meltdown of the millennium).


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## Mortgage u/w (Feb 6, 2014)

Most people are worried about the real estate market. I'd be more concerned with all the money that is being thrown at these marijuana companies which currently have no value. Truth is, there may be some merit to investing.....but the question is which one will be THE company that will survive and become the next tobacco giant? That's called gambling, not investing. If the law is ever passed and a pot company becomes profitable, there will be plenty of time to invest and still make money. No need to rush in right now.


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## Oldroe (Sep 18, 2009)

I sold for good profits when I met my goals.


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## familyman (Apr 6, 2015)

But isn't that the point, to invest _before_ something is going to happen, to get the biggest upside? If you invest once it's all said and done, the biggest profits are already past you, no? And I disagree with these companies having no value. Morningstar rating of Emblem is at $3.15/share, and now that they've gone public, they have the capital to reach profit levels very quickly...Basically what I'm curious is how different people reach the stage where they consider a company to be an "investment" as opposed to a "gamble", especially with legalization pretty much a given in the next few months...


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## Just a Guy (Mar 27, 2012)

It depends on your investment personality. I, for example, am a buy and hold value investor. I need to buy my stock cheap, and be able to hold it for a long time. I don't like to follow the stock market on a daily basis, I don't like to watch the news looking for the time when the stock's direction is about to change. I need to know, fundamentally, that the stock I own is basically safe long term, not a fad.

For this reason, I'm an excellent real estate investor as it fits my personality. It's also the reason I'm not a day trader. While I understand the lofgic of what they do, my personality doesn't allow me to do it well. I've tried other investing styles, even fad investing, while I understand how they work, I've never been very good at them because they don't work the way I like to work, so I'm already trading at a disadvantage.

Now, there are gamblers out there, professional ones who make a living doing it. I'm not saying you can't make money doing what you propose, what I'm saying is most people don't have the skill to recognize which companies will actually go up (not all will) nor the discipline to sell at the appropriate time. In fad investing it's really hard to sell when the stock is quickly or steadily going up, because of greed, the fact that it's been going up steadily, the news is always positive, etc.

Unfortunately, when the fad bursts, the stocks can quickly go to nothing, while the media (which generally runs behind reality) keeps saying everything is fine. It's best to research some history of similar markets, the internet boom of the 90's for example. There are always a few who make a killing at these times, however the majority of people usually end up being killed.

An investor is someone who consistently makes money with their strategy. A gambler is someone who may make a lot of money, but can't do it on a consistent and repeatable basis. They rely on luck to make money, while they may hit the jackpot once or twice, they can't consistently repeat their success...in the end, the house usually wins.


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## familyman (Apr 6, 2015)

Well I definitely agree with what you wrote, that if you can't make consistent returns, you're pretty much gambling. On the value investing note, I think if you buy a company that has pretty solid startup, that's not over-valued, in a market that is just about to get pretty big, AND you plan to hold for quite a while, I would almost dare to say that could also fall under the value investing category. Of course, the challenge is always trying to find that one company. Personally I think Emblem should do pretty well among the current marijuana companies, but I guess only time will truly tell...


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## Oldroe (Sep 18, 2009)

I buy stuff like this occasionally. 

Supreme Pharma I bought at .46 before the IPO, it didn't pop enough so I held until it went to .98 and sold.

What SL had was a complete green house facility beside the Bruce Nuc plant that was a bankrupt vegetable grow opp.

Now the crazy money has showed again. Be careful!


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## Just a Guy (Mar 27, 2012)

I think you confuse value investing with something else. Value investing is buying a known quantity when it's on sale, not a potential, unproven, company when it may or may not be cheap. For example, buying a Canadian bank during the financial meltdown of 2007. BMO, Canada's longest paying dividend stock fell from nearly $60 to around $24 while paying a $2.80 dividend. Canadian banks are, ultimately, backed by the government (unofficially of course). I can't remember the exact p/e or book value of that time, but they were very high (heck, they were fairly good when the stock was at $60 a few days earlier). That was a value buy.

Some unknown company, without earnings, entering an unknown market is not, by any definition, a value play. Value investing is all about taking known quantities.

Same in real estate, the last place I bought was a $70k two bedroom in the same complex where 1 beds are selling around $100k and where I expect to get around $1250/month in rent. As opposed to a $300k presale place where I may get $2k rent. Both may make money in is economy. The second property may, because it's brand new and in a new area, have a faster capital gain. Then again, we don't know. From what I know of the real estate market, and I believe a huge correction could occur (something already built into the price of the $70k unit), I bought the 1st place and avoided the second like the plague.

Of course, on this board, there are plenty of people who post "deals" like the second opportunity for comment all the time thinking they've hit gold. Maybe they have, anyone can predict the future but their success rate is what's important. I could be just as wrong as anyone else, the difference is, if I'm wrong, I'll still benefit unlike the other "investor". 

Value investors can still lose money, and miss out on several opportunities to make money quickly, but they tend to be protected from both up and down markets. They are also, to some extent contra investors, its hard to buy into something like Canadian banks when the headlines are preaching the end of the financial world. Buy low, sell high isn't as easy as it sounds, most people can't do it.


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## familyman (Apr 6, 2015)

Makes a lot of sense what you say. Words of wisdom  I will definitely keep an eye on the sector as this could be quite an amazing opportunity in the future


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## Just a Guy (Mar 27, 2012)

For what it's worth my cannabis play, which I implemented a while ago, was to buy Phillip Morris. I got in a few years ago, because I could see the writing on the wall and figured big tobacco was ultimately where things would wind up. Who better to produce cigarettes? How could small companies compete? PM has all the equipment, distribution, brands, etc.

Of course nothing has happened so far (despite several hoax articles that say the opposite) but the stock has also gone up nicely since I bought in and pays a dividend. Philip Morris was spun off from the parent company and has access to the entire market outside of the USA (including Canada) while the parent company has the USA market (which only has four states where its legal). There is also talk that they could recombine at some point (why would they do that if the USA is in a declining market, unless there was something they may test world wide that would increase market share domestically).


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