If you’re watching graphs, you’re doing it wrong: The changing face of investing

Over the last few days, I’ve dived into a bunch of newer platforms for investors to mess about.

I went on Twitch and watched guys streaming their screens as they bought and sold ETFs. I dug into ‘gurus’ like Timothy Sykes, who has a steady following, and the Wolf of Weed Street, who has a big following of his own. I went into Facebook investing groups and followed Twitter touts. I stacked opinions and tools and predictions and inside gossip and who was releasing news and who was raising money.

And then I watched what actually moved.

Today, some smaller weed deals went on a tear, and that tear was preceded by Facebook discussions.

Namaste Technologies (N.C), which has been beat up like a Trump fan at a gathering of sane non-racist people, ripped upwards today. Yesterday, I was asked by an investor in one of the Facebook groups I recently joined what I thought about the stock. “Undervalued,” I said. “I want to see a big quarter of financials from them but the stock is dirt cheap.” Others talked about the stock, some had already bought in, others were tempted, and today it lifted off, up 41% on big volume. No news, just a small group of guys who decided they were all in as of today, and a market that noticed and jumped on the back of their ride.

The other company mentioned in the same discussion that saw Namaste run was PUF Ventures (PUF.C), which has had a good run of late but that I don’t personally hang with. That ran up 37.5% today, with similar volume.

In another Facebook group, with several hundred members, the discussion went to Canabo Medical (CMM.V), which I rate highly and think the market doesn’t understand at all. I said it was in my top three. Up it went, 13.5% higher.

In another still, the talk went to Cannabix Technologies (BLO.C), and how it has slid a little of late and, maybe it’s time was coming. 1 million shares traded several hours later.

Which is not to say that the way to run a stock up is to go on Facebook and spam it. What’s happening here is, groups of investors are starting to find each other. You used to have to all be on the same broker list, or follow the same $1000 per year newsletter to know where the crowd was moving, but now you can see it happening around you, like a flock of terns darting about the sky.

The talk isn’t about fundamentals and balance sheets. It’s about what’s moving, what should move tomorrow, who’s holding and who’s dumping, and which promotional outfit is working one deal or the next.

This is the Greater Fool strategy writ large. Everyone follows everyone else in the belief that they won’t be the guy left holding the bag when it turns.

You see it on sites like Tommy Humphreys’ CEO.CA chat site, where insiders and analysts and newsletter guys spar over what drill results matter and which missed their mark, and what is said there is passed around elsewhere. “Rick Rule said he loves XXX.V, I have to add to my holding…” “Eric Coffin says YYY.V’s results are ass – I’ve got my sell order in.”

I was stunned to see folks on Twitch, which I only know about because I use it to watch others test play games before I spend $60+ on them, using the platform to live stream their daytrading. Totally ignoring that these guys are allowing others to front run their trades, the bigger interest appears to be the anywhere from five to 1500 people who are chatting about their trades as they happen.

Twitter’s trade touts are the worst, in terms of how see-through they are. Senor Wolf doesn’t hide his motives much when he calls out a stock – they’ve paid their money and he’s going to talk about it, and the fact that he’s talking about it makes it a buy because 15,000 other folks are going to hear the relentless drumbeat for the coming few weeks. You don’t buy because it’s good or because you’re smart but because the tribe has spoken and, for a while anyway, this ship is sailing hard.

At Equity.Guru, we’re part of this new world order. I’m not going to say we only talk sweet about companies that sponsor the site and take our marketing programs under their arm, because sometimes we don’t. The article posted before this one is very frank about how Cruz Cobalt Corp (CUZ.V) is unlikely to drill a damn thing, though it holds some eight cobalt properties in its portfolio.

I’m sure Cruz would rather we yelled about the glory of all things cobalty and swore blind they’ll explore hard, but that would be telling you something we don’t believe. The company has been profitable for investors and then some, but that doesn’t come from the likelihood they’ll produce a pound of ore any time soon, it comes from the knowledge that they will bring in buyers and the price will be volatile and a close watcher can profit on that.

Investing in the pennies, right now, is about who else is investing in the pennies right now. When you see a company has joined our client list (now over 30 companies, in just one year of operation), you know they’re actively promoting their business to investors and that makes them worth noting, even if their fundamentals aren’t yet where you’d like them.

Liberty Leaf (LIB.C)? They have an LOI. But when that LOI turns definitive, you know that we’ll be discussing it, along with others, and that makes LIB interesting even if you don’t think they’re going to turn a key and turn the lights on in a facility some time soon.

Calyx Bio-Ventures (CYX.V)? When we started writing about them, it was a $0.015 stock moving to $0.03. Then $0.05. Then $0.11. Hell, we even said, we have no idea what they’re doing, but someone is buying, and that led people to buy more. We still don’t really know what they’re cooking up in Roger Forde’s code factory, but they’re expanding office space and hiring coders at speed and are very quiet on the news side, which leads gamblers to gamble that it all means something.

We did a podcast with Cobalt Power Group (CPO.V) last week and the stock flew hard for the next several days. Was it suddenly a greater deal than it was a few days earlier? Hells no – but they were talking now, and talking through our platform, so people got in front of it in the expectation others would follow.

Call a broker, any broker, and ask them about the new weed deal going public, and the first thing they’ll say is, “Everyone is in on it, it’s going to fly. I’m getting so many calls.”

As an investor, especially as a new investor, you need to understand what’s going on here. It used to be, investors in resources would follow executives from company to company because they wanted a steady hand at the tiller. Now they’re following promoters and deal makers. What’s Howe and Bay putting together this month? What’s Core Capital talking about on Twitter? How many heavy hitters are in on TGOD? What shell is the new Giustra deal rolling into? Why are the Twins in Calgary? What’s Fabrice selling?

You can talk all day about how great a business concept Canabo Health is, and I think it’s a fucking pearler, but it’s a dead loss until someone gets on the dance floor and says “I’m all in,” and that person could be me to an audience at a conference, or it could be five guys on a Facebook investing group who have decided to all go in on the same undervalued, long forgotten plaything.

Canabo is IN PLAY, not because it shouldn’t have been two months ago, but because a handful of guys have decided to be first into it, this week. The next bunch will be in second, based on that move, and they’ll do well, and the bunch after that will be watching charts and thinking “oooh, what’s this?” and maybe make some money, maybe not, because they’ll also be the last ones out of a downturn.

My point is, by all means look at those fundamentals and tell me how great Patriot One (PAT.V) is as a company, but I’m going to pay a lot more attention when I hear others telling that same story, and when guys like me are putting them front and centre because they’ve spent some money on some coverage, and media, and advertising, and IR, and all the social media channels are all PAT, all the time (which was the case just before it went on a berzerko run last month).

You can see when a run is being readied. You just have to stop looking at your watchlist and start listening in to conversations around you.

After all, investors are like cockroaches. If you find three having a chat, there’s thirty more hiding under the fridge.

To that end, Equity.Guru is going to be doing more to get our content out to more places in the coming months. We’re building a studio that we’ll be using for live streaming, podcasting, video, production of regular series, the works. And that’s going to be going out to all the places you live, rather than keeping it on our own site in the expectation that you’ll come back every day. We’re moving into Instagram, Twitch, YouTube, our podcast is in iTunes, and we’re now covering energy metals, mining, and tech like we have traditionally covered weed. More reporters, more insight.

Also, we’re putting together a women’s investing group that we hope will be as successful as our push to gather millennials was in 2016. More on that soon. 2017 is going to be a big year for EG.

— Chris Parry

FULL DISCLOSURE: Every company in this piece with the exception of PUF is an Equity.Guru marketing client. Because we’re straight up killers, yo.