[ 3 / biz / cgl / ck / diy / fa / ic / jp / lit / sci / vr / vt ] [ index / top / reports ] [ become a patron ] [ status ]
2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance

View post   
File: 83 KB, 1167x576, Capture.jpg [View same] [iqdb] [saucenao] [google]
6072550 No.6072550 [Reply] [Original]

How grossly overvalued are weed stocks right now? Estimating that cost/revenue will be similar to tobacco (which it's not obviously, but what else to compare to), then wouldn't this one company need a revenue around $1 billion just to have a div yield around 2%? This is roughly estimating compared to Altria's 25 billion revenue.

i'm scared for a crash, do i sell my stocks before the first quarterly

>> No.6073047

>>6072550
How much are tobacco stocks?

>> No.6073112
File: 9 KB, 225x225, 1511474129997.jpg [View same] [iqdb] [saucenao] [google]
6073112

>>6072550

>What is speculative value and market cap

CGC is poised to be a market leader in an industry that within 10 years will eclipse tobacco in terms of profit, yet it's market capitalisation is 27 times LESS than PM. Let me explain how markets work, markets move based on information, the information that something WILL make a profit is equivalent within a market to actually making that profit. The appropriate valuation is therefore the total sum of the future profit multiplied by a variable related to the risks that those profits wont pan out (hence the speculative aspect). Consider the following hypothetical, a company think it has the cure for cancer, a company confirms it has the cure for cancer, a company is actively producing the cure for cancer. The value of the company producing the cure and the value of the company that has discovered the cure and is about to start producing the cure is the same because every investor knows that getting the cure is the hard part. Likewise people are buying weed stocks because they know that in 5, 10, 20 years they will be absolutely raking in money. Imagine if you had an opportunity to invest in a tobacco company or a tea company back when those companies were just starting, you'd pay 10x their worth just to get your foot in the door.

In short, don't evaluate how overbought a stock is until you learn more about how markets work. It's not very often in our lives that something goes from illegal to legal.