Ex-Hedge Fund Manager to Investors: Hold Out for Cannabis Stocks, Instead of Bitcoin ‘Speculation’
- Whitney Tilson joined the PreMarket Prep morning show.
- Siding with previous comments of Warren Buffett, Tilson finds Bitcoin to be a much more dangerous investment than cannabis stocks.
Whitney Tilson used to be a hedge fund manager before joining the PreMarket Prep morning show this Monday. At this point, Tilson has gained a lot of information about the way that the market works, which is why his recommendation to stick with cannabis stocks holds so much weight. During the discussion, he spoke about the differences in speculation between cryptocurrency and cannabis.
Are Cannabis Stocks A Better Investment than Cryptocurrencies?
As Tilson sees it, the legalization of cannabis is a long-term trend that the world will continue to engage in, allowing the stocks to continually gain momentum as countries and states change their laws. However, at their current valuation, it is difficult to invest in them. He advised, “Do the work in the cannabis sector, but wait for the bust, because a bust will be coming.”
Last year, when the Tilray Inc. stock rose to $300, Tilson had told Yahoo that the stock would see a drop of about 90%. Sure enough, about six months later, Tilray was trading under $40.
The cannabis producers in Columbia, as Tilson says, will end up having significant power in the market around the world, considering that they have such low production costs compared to Canadian producers.
Bitcoin (BTC) is A Highly Speculative Investment
While Canopy Growth Corp and Aurora Cannabis are not exactly hot spots on Tilson’s radar, he has been bullish about Northern Swan, saying:
“I was very impressed with what I saw from Northern Swan and its CEO Kyle Detwiler.”
In December 2017, Tilson had sent out an email to subscribers when Bitcoin had reached its all-time high around $20,000. When it subsequently crashed in 2018, the Grayscale Bitcoin Trust has risen by 152% so far in 2019. Still, Tilman seems to agree with Warren Buffett’s belief that Bitcoin is “rat poison squared,” adding:
“Bitcoin is a pure speculative investment. There is no intrinsic value or fundamental value.”
If investors are going to speculate regardless, Tilson believes that the cannabis space is a safer bet, since it has firmer long-term potential for profit and earnings.