My Worst Trade Ever - Cronos Group $CRON
"How low can you go" - good saying while playing Limbo, not when investing...

That is the feeling I have towards $CRON, my worst trade ever. We'll get the pain out of the way up front and address the elephant in the room:
  • Initial Position: -68.7%
  • Average Cost Basis: - 64.3%

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So how did we get here? It was the summer of 2020, I was consuming as much investing content as I possibly could. I had developed a few favorite resources I was frequenting, one of which was Investopedia. Don't get me wrong, Investopedia is a great site that provides a lot of value that I still interact with almost daily. However, taking stock advice from them wasn't my best decision.

I remembered reading one Investopedia article about marijuana stocks and $CRON was a name mentioned. I saw the price was low (under $10 per share). I got stuck in the trap of thinking "all it needs to do is go up a little to make a huge gain". On the other side, it only needed to drop a little bit to be a huge loss.

I bought 20 shares across 4 separate lots from 7/6/2020 through 10/5/2020.

This is still only a "paper loss" as I have not sold any shares yet. I am trying to maintain my 3 year minimum holding period. We are quickly approaching 3 years of holding this company and will be looking to sell in my July portfolio rebalancing.

Although this experience has been mostly bad, it has taught me to add companies that pique my interest to my watchlist first and track. Utilizing a watchlist allows me to do the leg work required to initiate a position and make better decisions. This is also one of the bad position decisions that pushed me towards implementing my Birthday Buys and being more calculated in starting new positions.

Dis-honorable mentions were $COIN and $CHWY. Those stories are for another time.

How do you handle enticing new opportunities? What is your minimum holding period? I am interested to see if any others have been caught in a trap like this.
Todor Kostov's avatar
@scorebdinvestor Thanks for sharing! Did you do an additional research of the industry before entering the position?
Scoreboard Investor's avatar
@kostofff no, I did not. Definitely a lesson in due diligence
Todor Kostov's avatar
@scorebdinvestor It's always worth the efforts.
Joey Hirendernath's avatar
The strategy of first adding to your watchlist is in my opinion an prudent preliminary step before initiating a position. I find that it gives me the same feeling as actually starting a new position as I feel more invested to follow the company closely. Thanks for sharing
Scoreboard Investor's avatar
@joeyhirendernath you’re welcome! Definitely was a learning experience for me
Nathan Worden's avatar
I didn't know Investopedia had so many articles about individual companies. Feels a little like the Motley Fool where at the end of the article they have a service to check out:

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Scoreboard Investor's avatar
@nathanworden yeah, they have a lot of individual information. Also highlight the same specific companies in their quarterly sentiment surveys
Conor Mac's avatar
The 3 year minimum holding period is an interesting one; what are the exceptions that would allow you to break it?
Scoreboard Investor's avatar
@investmenttalk that’s a good question and I don’t really have an answer. Honestly, I only started actively managing my investments 3 years ago this coming April.

The only thing I can think of is I sold some small bond fund positions last year because I felt I was over diversified there



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