Welcome to Numbers Narrative: Thoughts and Analysis on Investing and Wellness!
This page has three sections:
Introduction
This site is designed to be a blog and platform to present thought provoking analysis and content on investing and wellness, for the benefit of investors, consumers and the industry. The initial scope is Cannabis, an industry that faces multiple challenges in spite of the fact that it makes valuable contributions by alleviating the physical and mental suffering in the world. This is an underdog sector of the investing world, plagued by misinformation, bias and ignorance. It is also one of the most disappointing sectors for retail investors, and a cause of significant destruction in shareholder value. Through numbers and narratives, I seek to add clarity on cannabis investing and give investors in this sector valuable information to help them in their investing decisions.
The following three quotes should give you an overview of this blog:
“Without data, you're just another person with an opinion.”
– W. Edwards Deming
“The most powerful person in the world is the storyteller. The storyteller sets the vision, values and agenda of an entire generation that is to come.”
– Steve Jobs
“Valuation is a bridge between stories and numbers, and for young companies, it is the story that drives the numbers, rather than the other way around.”
– Aswath Damodaran
Aswath Damodaran, who is sometimes called the “Dean of valuation”, is a Professor of Finance at the Stern School of Business at NYU. This blog’s title, NumbersNarrative, was inspired by Professor Damodaran’s blog Musings on Markets and his book, available on Amazon:
Please note that Professor Damodaran has not been involved in creating this Blog’s content. He is a teacher I admire and I have included his videos where relevant for educational purposes.
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Data, numbers and fundamentals are the foundation for this blog. But for many investors, these are like looking at the sun, too intense to look at. But just as the light of the sun can be viewed when it is reflected on the moon, I have used narratives to make the data easier to understand. My goal is to present the data with narratives, so that you can learn and think for yourself, and make your own data-driven decisions. The approach of presenting a hybrid between numbers and narratives is also used in the pages where I have used analogies presented with analysis. An aptly chosen analogy is easy to remember and effectively explains the insights derived from the analysis. Across the blog I have tried to incorporate Mr. Spock's Vulcan logic.
This blog was launched in June 2022, when stock markets had a pullback in many sectors including Technology and Cryptocurrencies. Many Cannabis stock prices were at 52 week lows and stock valuations of several good quality Cannabis companies make them worthy of due diligence and analysis. I have not published this blog with the recommendation that you invest in any of the stocks covered here. I am not a qualified advisor.
I have presented a variety of analyses on the sector and individual stocks, with scenarios and potential outcomes based on different metrics and assumptions. In the ANALYSIS category, I present analysis for multiple scenarios using Bull Market assumptions as well as Bear Market assumptions. The STOCKS category also includes Bull and Bear scenarios for selected individual stocks. The accuracy of the analyses and success of the methodology used will only be known in the years to follow, as the investment thesis for Cannabis should be thought of in years and decades, not weeks or months. At a minimum, the investment horizon should be 2026 or beyond. I am bullish on the Cannabis sector as a long-term investment (2026 and beyond), provided stocks/ETFs are carefully picked based on data-driven due diligence. But in the short term, the prolonged Bear market is likely to persist. This is primarily because the investment community continues to ignore the fundamentals, to focus excessively on US politicians and the lack of promised cannabis friendly reforms. The content in this blog elaborates on these topics and was published to bring some balance by highlighting data, numbers and fundamentals.
Guide
The following is a guide on how to navigate the blog. The structure is designed to present numbers and narratives to provoke thought and learning. This is done via a series of topics leading to more advanced topics built upon the foundation set in previous topics.
In the ABOUT category, we have:
This page, Introduction and Guide
About Adastra, where I provide some details about myself and explain the purpose of this blog and means to achieve this purpose.
Investment Methodology, where I explain an investment methodology I use that I based on my experience investing in the US and Canadian stock markets.
The INVESTING category has a series of six articles I have written about investing in the Cannabis sector:
This first article provides an investment thesis for the Cannabis sector and gives an overview of why this could be one the great investment opportunities of the 21st century. I draw upon the parallels between the Twentieth century’s end of alcohol prohibition (1933) and the Twenty-first century’s ongoing end of cannabis prohibition. I also estimate the market size for cannabis and explain trends in growth and consumption.
This second article covers risks and mistakes made by companies, governments and investors in the past. It explains the need for due diligence while investing in the sector and highlights some factors to monitor and analyze further.
This third article analyzes the retail cannabis, Licensed Producers (LP) and other sub-sectors within the cannabis sector. I explain using fruits as an analogy that it is not about comparing apples to oranges. It is more like apricots (retailers), plums (producers) and apriums (vertically integrated hybrids of retail and production). A fourth category is apples, as there are some that are cannabis technology companies. And a fifth would be tomatoes (cannabis pharmaceuticals) which are technically fruits but often used as vegetables.
The fourth article uses the Roman Senators and Gladiators as an analogy to highlight the premium awarded to stocks listed on the Nasdaq/NYSE (the Senate) vs the dog-eat-dog OTC exchange (the Colosseum). I estimate the premium valuations awarded to Nasdaq/NYSE listed stocks based on the valuation metrics (PS) seen in the cannabis bull markets of 2018 and 2021.
The fifth article uses the analogy of nerds who came to the party early, to describe current cannabis investors who focus on fundamentals, numbers and data. I share some ideas on the timelines for the next cannabis bull market. I also explain the importance of stocks uplisting from the OTC to Nasdaq/NYSE and the importance of having institutional investors participating in order to have a sustainable cannabis bull market.
The sixth article explains the importance of looking at the big picture when it comes to investing in the Cannabis sector.
The ANALYSIS category builds upon the foundation set in the Cannabis INVESTING category. It contains multiple pages updated regularly based on my analysis using an Excel file I built to track the sector. Multiple scenarios are presented for bull market and bear market scenarios. The PS Ratio driven scenarios include a baseline (PS 5), three bull market scenarios (Moon PS 10, Mars PS 15, Stars PS 20) and three bear market scenarios (Koala PS 2, Panda PS 1, Polar PS 0.5)
This page presents a data-driven analysis to identify the best Cannabis stocks from a list of many of the largest stocks (by revenue) in the sector. The analysis uses a point system to rank the stocks and incorporates various different analyses, each with their own page:
This page presents a valuation analysis using PS Ratios for cannabis stocks in multiple Bull Market scenarios
This page presents a valuation analysis using PS Ratios for cannabis stocks in multiple Bear Market scenarios
Cannabis ETF Analysis: Cannabis Stocks with highest % of Market Cap Owned by the large Cannabis ETFs
This page presents an analysis using the holdings data of six Cannabis ETFs:
AdvisorShares Pure US Cannabis ETF (Ticker MSOS), ETFMG Alternative Harvest ETF (Ticker MJ), AdvisorShares Pure Cannabis ETF (Ticker YOLO), ETFMG Alternative Harvest ETF (Ticker MJUS), Amplify Seymour Cannabis ETF (Ticker CNBS) and The Cannabis ETF (Ticker THCX).
The analysis identifies Cannabis Stocks with highest % of Market Cap Owned by the ETFs. This factor indicates which stocks can benefit the most when funds flow into a sector (i.e. sector rotation)
This page presents an analysis of cannabis stocks using revenue growth based on quarterly revenues starting Q1 2020
This page presents an analysis of cannabis stocks using Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (AEBITDA), an industry recognized metric often used by analysts to calculate price targets
This page presents an analysis of historical bull market valuations of prominent cannabis stocks using PS Ratios from 2017 to 2022
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The STOCKS category builds upon the foundation set in the Cannabis INVESTING and ANALYSIS categories. It includes the following pages with thoughts and analysis on building a portfolio and investing in individual stocks or ETFs.
This page presents thoughts on creating a Cannabis Portfolio built on the methodology and analyses in this blog.
The following stocks mentioned in the cannabis portfolio have a page with an investment thesis. Each thesis includes a revenue growth tracking and forecasting table. Also presented is a scenario analysis of market cap and share price based on different potential scenarios. As time permits, I might add more stocks with a dedicated page. For now, these showcase a few companies that my analysis identifies as worthy of due diligence and inclusion in any cannabis portfolio.
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The analyses presented in the ANALYSIS and STOCKS categories and the analogies used in the INVESTING category are original and done by me independently. Any similarity to analyses posted elsewhere is a coincidence that I was not aware of at the time I launched this blog (June2022). This Introduction and Guide page will be updated as I add new categories and pages of content.
Content Partnerships and Affiliates
I am seeking to partner with some companies in the Cannabis sector for a combination of content sharing, interviews on results/developments, news coverage, affiliate marketing and other ideas that I have. There is a need to bring together investors, influencers and the industry through knowledge sharing; a need this blog/platform was designed to meet. A company may have excellent fundamentals, with impressive growth, strategy and execution, but will continue to trade at low valuations if not many people are aware of it. Such success would be no different that achieving a great feat in sports, when nobody is watching.
Information is an asset that grows (and does not diminish) when it is shared. I am also open to collaborations in the Psychedelics sector and potentially others in Technology and other sectors. Although no longer an investor in the Psychedelics sector, it is a sector I believe in and think will make valuable contributions to alleviating the global mental health crisis. If you are a representative of a company that would be interested in partnering with me, please feel free to connect via the Contact page or Twitter.
To avoid speculations and false accusations I want to make it clear that I have received (as of last update date of this page) ZERO funding for this blog from any of the companies featured in this blog. In fact I have received zero funding whatsoever and this blog is the product of my time and expenses. Cannabis related content, in spite of adding value to society, is prohibited on Google AdSense and other services that most bloggers can use to monetize their content. This is unfair and discriminatory, but so is life. Hence you will see affiliate links from merchants who saw value in my content and agreed to collaborate with me.
This blog has several affiliate links to products and services in the Health and Wellness industries, including nonpsychoactive cannabinoids and nutritional supplements, with the goal of spreading awareness and monetizing this blog’s content. These have been provided through Amazon and the ShareASale Affiliate Marketing Platform. Feel free to check them out. You might find something that helps improve your physical, mental and/or spiritual wellness; and you would be supporting my analysis and content publishing in the process.
FABCBD affiliate links are featured prominently on this blog. The products are very high quality with excellent reviews, and their CBD oil is ranked Best Full Spectrum CBD Oil (2022) by Forbes. I categorize this as Cannabinoid company, because they sell several compounds from more than a hundred compounds (called cannabinoids) found in Cannabis and Hemp plants. The non-psychoactive cannabinoids include the well known cannabidiol (CBD), and other cannabinoids gaining in popularity, including cannabinol (CBN), cannabichromene (CBC) and cannabigerol (CBG). Research is showing that Cannabis is indeed a miracle plant and each cannabinoid has health benefits. The products include oils, gummies, softgel capsules, creams, dog treats and superfoods. Their complete cannabinoid softgels having equal parts CBD, CBG, CBN, and CBC is a product well worth checking out. The company has provided a 20% discount coupon "NUMBERSNARRATIVE" for this blog. If you are in the US, feel free to click on the links to explore products, and don't forget to use the coupon to get the discount!
In addition, I have included affiliate links and products with one Cannabis accessories (or Headshop) merchant, Smoke Cartel. They are one of the most popular Cannabis accessories ecommerce sites in the US and have a very large selection of products available at competitive prices. The company has provided a 10% discount coupon "NUMBERSNARRATIVE" for this blog. If you are in the US, feel free to click on the links to explore products, and don't forget to use the coupon to get the discount!
Please note that FABCBD and Smoke Cartel are merchants owned by High Tide, one of the companies featured in this blog. High Tide gave me no preferential treatment for the "NUMBERSNARRATIVE" discount coupons provided. These are available for qualified affiliates via the ShareASale Affiliate Marketing Platform.
As explained in my About Adastra page, this blog is the product of significant personal resources, including time and expense. If you find any article here worth sharing, please share via the social media share options. Instead of publishing this blog as a book, and monetizing with royalties, I have decided to publish the content for free. I am like the musicians playing in a subway station. If you find this Blog worthy of your support, you can support me using the affiliate links and via Patreon.
If you are interested in connecting, you can do so on Twitter (@numbersnarrati) and Stocktwits (@AdastraYOLO). To support, please check out the affiliate links (especially CBD and other cannabinoid products) or become a Patron via the Numbers Narrative Patreon Page.
Disclaimer: All content and analysis on this Blog/website is information shared for educational and entertainment purposes only. The content creator(s) of this Blog are not financial advisors and the content is not intended to provide advice or recommendations for any security, investment product or any other product or service mentioned on this Blog. You should not use this Blog to make financial decisions and you should instead seek advice from professionals who are authorized to provide investment advice. Although best efforts have been taken to keep the information on this Blog accurate, this Blog may contain errors and inaccuracies. You alone assume the sole responsibility of the risks associated with the use of any content on the Blog. In no event shall any of the content creators be liable for any damages in connection with the information contained in this Blog or links provided.
Disclosure: I (username Adastra) am an investor not a trader. I am bullish on the Cannabis sector as a long-term investment (2026 and beyond), provided stocks/ETFs are carefully picked based on data-driven due diligence. Of the 16 stocks covered in the Best Cannabis Stocks analysis, I have invested only in my top 3 picks: High Tide, Green Thumb and Curaleaf. But my analysis indicates (without any guarantees) that there is a potential for impressive gains in investing in the stocks best ranked in the analysis, including WM Technology, and Trulieve, which have a dedicated page with detailed analysis in the STOCKS category. I reserve the right to buy or sell at any time any of the stocks mentioned in this blog. I do not short stocks and never will short any stock in a company that makes the world a better place. I do not have insider knowledge of any company covered in this blog. All data used for analysis is from public sources. I have received (as of last update date of this page) ZERO funding for this blog from any of the companies featured in this blog.