Bill Cara

Change in plans re portfolio structure and trading

The broad market is changing in a way that makes me uncomfortable. Typically when that happens, I exit. I almost did that near the end of May but then went back in and suffered my only loss in 15 months — a bad one — that requires a change of strategy and tactics.

Let’s first discuss Cannabis, Biotech & Oilers.

I recently discovered through one of you that the Clever Leaves Dec 2025 $11.50 warrants (CLVRW) have an exercise price limited by $18.00 stock price, so the maximum price on the warrants will be $6.50, which is well short of the 10x upside I first saw. I did make a considerable gain in a couple of weeks in January, as published. Today, my cost basis is nearby the market price, but I hold too large a portfolio weighting now that I understand the smaller upside, so I will probably be selling some over the next 30-45 days.

I do have a large gain in my second Cannabis holding, Village Farms (VFF), and will likely double the weighting in the same time frame. Village Farms received approval to double their large operation in Vancouver, and the company is a profitable grower.

Over the next couple of months, I will likely add a couple of multi-state US Cannabis dispensary stocks that are also profitable and growing rapidly. Because of advances in cannabis legislation in several States, I have been monitoring them for months and ready this Summer to invest.

When fully invested, I will likely go to an 8% portfolio weighting for Cannabis.

I will try to do the same for Biotech (4 stocks at 2% each) and Oilers (the same).

Because of changing market conditions, I need to deploy say 40 well-diversified, smaller holdings (up from 24 and over-weighted to Gold, Silver & Copper) and move like a guerrilla in and out of the market. Investing for a year or more in a company’s fundamentals like revenue, cash flow, and earning’s growth is no longer enough. To remain profitable in today’s volatile market, investors must trade frequently based on technical and quantitative analysis.

Presently I have zero Biotech and Oilers, but with Cannabis, Biotech, and Oilers at 24% in total, these will help offset the Gold, Silver & Copper over-weighting. Clearly, I believe the market will favor G,S&C going forward, but to the extent that I feel it will not, then I plan to further replace some of those with Uranium and Cryptominers. I am monitoring three of these each.

These would be fully invested weightings. In every stock, whenever I determine a downtrend, I plan to sell 90%. So, the strategy is now to hold more stocks but smaller positions and to use hit-and-run tactics. Call it guerrilla warfare against Humongous Bank & Broker (HB&B).

Like my Cannabis plan, I have plans for the Biotech and the Oilers.

With the assistance of baz22, I intend to monitor just ten Biotechs, but these will be in one of four industry segments: (i) CRISPR, (ii) CNS ( Central Nervous System ), (iii) RNAi, and (iv) mRNA. From each segment, I will trade one. If necessary, I may make a temporary (or possibly longer term) exchange of one of the ten that I am tracking for one that I believe is a better trade.

With the Oilers, I believe that Western Canada is the most hospitable jurisdiction and one involved in conventional drilling. As long as the netbacks and the price of Western Canada Select oil are suitable, and they are today, then their future looks good and this is where I will invest. I have seven Western Canada Oilers averaging US$4 Billion being monitored, and will trade four.

I will likely not move into these new positions quickly as I believe there is a 50% probability of a broad market pullback in 4 to 6 weeks that will exceed the typical 8% sell-off, but not exceed 16%. I have too many wide-ranging concerns about the broad market to believe that prices will continue to escalate without a reality check.

Longer-term, I believe that factors like pandemic control and re-opening of the global economy will lead to higher prices in a continuing Bull market, one based on improving earnings and cash flow. So, following a spike down within two months, I expect to be fully invested in as many as 40 stocks, which I intend to actively trade and write about.