Spotting Euphoria: Quick Trade (TLRY - 9/21/18 $50 Puts)

30 Ogo 2018

No description needed; this cannabis stock is up ~160% since Aug 14th. It trades at ~156X forward sales. RSI shows extremely overbought levels hitting at high at ~87.

I opened the 9/21/18 $50 Puts 5min before the close yesterday. Up about 15% right now, but I think more room on the downside is coming. If I were you, I'd follow along. This one is pretty simple.

Euphoria is easy to spot.

31 Ogo 2018

Nota

As with any euphoric movement, overshooting in both directions is quite common. Nothing has changed, this stock is overbought/overvalued, I'm adding to my position. If this continues to move higher from here, I think it only enhances probability of a more severe correction.

I'll provide periodic updates if anything changes in my thesis.

Cheers!

4 Sep 2018

Nota

As I mentioned last week "As with any euphoric movement, overshooting in both directions is quite common"

This short to me is only getting juicier. Adding.

6 Sep 2018

Nota

TLRY reminds me of Bitcoin in Dec-17.

Back in Dec, it was all about the crypto bubble, today it's all about the cannabis bubble. Just like Bitcoin, this rally in TLRY over the past couple of days was due to nothing more than retail investor enthusiasm and FOMO. Absolutely no consideration is given to anything fundamental/technical.

TLRY went public at $17 about 6-weeks ago and since then has gone up in a straight line hitting a high of ~$97 before pulling back.

TLRY has P/S ratio of ~290: in the most recent quarterly earnings, Tilray only generated 9.7M in revenue with losses of 12.9M. This company delivered more than $1 in losses for every $1 in revenues. This is a high ratio of loss to revenue (rare and not good).

Short selling firm Citron gave reasons why this is a $26 stock (youtube.com/watch?v=Arm5wNYAsDw), but many analysts say this is too high given current and future expected growth.

My position was definitely too early (currently down ~50%). But just as I mentioned below in the comments - I first said to short Bitcoin at 17K seeing the same things and we all know it hit a peak at 20K before crashing down current levels around 6K (likely headed to much lower as well).

I'm very confident that this stock is going to implode. However, I'm not saying this is a bad company, the price just got ahead of itself.

I will be looking at $80/$90 Puts as my next position. I do want to see if there's still a lot more FOMO that needs to be flushed out before stepping in.

If this stock goes over $100 soon, this will be my largest short position ever. I would triple down (unless something changes in the overall narrative, never marry a stock or idea).

An important note is that shorting a stock is a lot harder than going long, so I understand if many do not follow my trade here, in fact, only those who can afford to have this go against them should follow.

I have the capital and I'm not afraid to be wrong on this one; so far the only thing I've been wrong on its timing and underestimating investor spirits in the weed space. It's like crypto late last year all over again.

The day of reckoning is coming. Be prepared.

I'll post position(s) as I open them. Stay tuned.

Cheers!

7 Sep 2018

Nota

Going long the 10/19/18 $70 Puts. Technicals are showing a major breakdown and RSI is still heavily overbought. I will add one more short position if this stock hits the mid-$90-$100 over the next couple of weeks.

Again, this is a very risky trade given the amount of FOMO involved. Risk what you can afford.

Another way to play this short idea is to go short CRON. Puts are much cheaper. I may open a position on this next week.

I'll keep everyone posted.

Have a nice weekend!

12 Sep 2018

Nota

Just like Bitcoin in Dec-17, this will most certainly play out the same way.

Adding to short position -- 12/21/2018 50.00 Puts.

This trade is not for the faint of heart.

12 Sep 2018

Nota

This was my short call on Bitcoin and the stock RIOT which both went extremely parabolic. As you can see, both went higher after making the call, then they both crashed hard.

We will see how this plays out.

Cheers!

13 Sep 2018

Nota

Ladies and gents, I'm confident that this is going to end catastrophically.

My colleagues and I have been trading the markets for a very long time and we've 'never' seen a stock act like this (amazing): +10%-15% moves every day just isn't healthy or sustainable for any stock and highly increases the risk of a 'major' crash/correction.

This stock is up +500% and went public just 2 months ago. The market cap of this company is now +11B on 9M in sales and -12M in losses. That's a joke that's not really funny, it's kinda sad. Have to admit that this is worst than Bitcoin, I suspect it will end worst as well.

My last purchased Puts expire in Dec-18. I'm actually going to buy more and let those ride.

At this point, again, unless you have the capital and can tolerate the risk, I'd suggest not following me anymore (guessing many already gave up). I understand.

"Tilray's Stock Is Simply Out of Control Right Now"
thestreet.com/investing/stocks/tilray-stock-is-simply-out-of-control-right-now-14710813?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

Following this stock closely, will provide updates periodically.

13 Sep 2018

Nota

Puts finally saw some green action today and TLRY is down about ~7% after hours due to this release:

report:politico.com/story/2018/09/13/canada-weed-pot-border-783260

seekingalpha.com/news/3390222-pot-stocks-poop-canadian-weed-investors-may-barred-u-s

I don't place much importance on after hour movement, but this could be the catalyst for the impending crash. Candidly, I hope this get's bought and we see this go a bit higher ~$150, before collapsing to a least $20-$35 area.

I want more Puts. ;-)

18 Sep 2018

Nota

"Tilray’s parabolic rise has given the company, which had only $28 million in sales, a market cap higher than 93 companies in the S&P 500, according to research from Pension Partners. With a market value of around $12 billion, it’s now bigger than established brands like Polo Ralph Lauren and Juniper Networks."

Let me be clear - I was early, which means I was wrong on this trade. Important to know when your wrong and learn from it. You can't get them all right. The goal is to stay net positive in your portfolio. If you've been following all my trades thus far, you've made a substantial gain. This short isnt going to eat away at those gains overall. I'll post the math at year end to show what you would have made if following along my trades.

Clearly, this euphoria extended a lot higher than I originally anticipated. I underestimated just how much this stock is loved (a lot of this is driven by a short squeeze, but I'm not done. There's no way this stock can sustain these levels (nothing goes up in a straight line this and doesn't crash), but until the lock-up expiration, no point in chasing this. This stock has reached the $150 level, but I going to look to add to my short position as we approach the lock-up.

At this rate, it may take a while for this thing to explode. I'm going to be patient to add to my short.

This is probably one of the most fascinating stocks to watch right now. I'll post my next move.

More to come here -- and definitely congrats if you went the opposite way and went long.

19 Sep 2018

Nota

This is the most epic short squeeze probably in the history of the stock market. Just do a google search on this name and see what everyone is talking about. Not to mention the SEC came out as warned investors about cannabis stocks in the same way they warned investors about cryptos (same language).

Again, I've been trading for a long time, never seen something like this. However, interestingly, my Dec-18 Puts are only down 20%. While I don't recommend anyone follow me, I will be buying more Puts at some point as we approach the lock-up.

This is a house of cards. The collapse will also be epic.

Stay patient.

24 Sep 2018

Nota

TLRY has now given up all of last weeks insane gains (unsurprisingly). I expect more downside ahead and will likely cover between $40-$60. I suspect this stock could bounce here given the speed of the sell-off, but I would use that as an opportunity to load up on Puts.

Maintaining my Oct-Dec short position. I may add if we see another one of those +10% bounces.

Again, I was just early with my original call. The overall thesis is correct.

Euphoria is easy to spot.