Hey guys I wasn't even supposed to make this video today, it's not on our production schedule, but it's very important so I put everything else aside to make this video and give you a warning. What are the Top Pot and Marijuana Penny Stocks?A lots been talked about lately about marijuana and pot penny stocks. These companies that are producing marijuana or involved somehow with marijuana either directly or indirectly. Share prices have been going up a lot and a ton of people are coming along and asking me questions about well their financials look horrible but should we be investing in penny stocks that have to do with marijuana because things are changing and marijuana is going to become probably legal coming up so shouldn't these companies do well. I need to give you a warning, just bear with me for a couple minutes.
This is going to really help you avoid taking losses on these stocks.
Check this out! What's happening is that companies which are related either directly or indirectly to anything to do with marijuana are increasing in price. Some of them have doubled or tripled in price recently and people are saying well doesn't that make them a great investment. Sure in the short term in terms of the actual price activity of the shares, but the underlying companies are destined, most of them to go completely bankrupt. These are financial train wrecks and when the whole marijuana craze got big the first time and then investors got wiped out, then again the second time investors again got wiped out.
This is just the third iteration of the same thing. People think it's a good idea take a few hundred bucks and invest in a marijuana company because they think that things will get better for these companies when marijuana becomes more widely accepted. Here's the thing. The rules of running a business have not changed at all and they won't change. If you are running at a loss of tens of millions of dollars, you have barely any revenues to support your operations, you're destined for bankruptcy. These companies are getting hyped up just because of the simple concept of ok marijuana might become more popular so it's a good investment.
People who invest that way and don't think deeper than that, they always get wiped out. These stocks are coming back down and people are going to lose a lot of money on them, because you know when the last time the craze happened some companies, old defunct mining companies, they just put the word cannabis in their company name and changed it, the price of the shares instantly doubled because of the craze. There's an investor mania going on, a stampede right now. There's a lot of emotion. People are telling you that the thing to do is invest in these marijuana companies. A lot of this is pump and dumps. These companies some of them were valued at half a billion dollars during the marijuana craze when they have a handful of employees, maybe five or six employees.
It was ridiculous, it was unsustainable it ended the same way it always does. These stocks are coming back down and the faster they rise the faster they're coming back down. You need to avoid almost all of these marijuana companies. They're all overvalued right now, the prices have been driven up and driven up by investors who think it's a smart idea to get into marijuana trade. The reality is just like in the turn-of-the-century I always use the example of how there was more than 1,800 car companies automobile manufacturers in the United States at the turn-of-the-century. People forget that or they didn't know that. The vast majority, 99.9 percent of these companies all went bankrupt. This is the same thing that's going to happen with these little mom-and-pop marijuana companies are making rope out of hemp and all that kind of stuff. They're bleeding cash, they're losing money.
There's no good investment, there's no angle here. You can't come along now, invest in a marijuana company and expect it to keep on going up. They're pretty much maxed out. They're a lot closer to a top then a bottom. Just because the concept is pretty exciting people think it's the next new thing. Don't lose money involving yourself with these types of companies. Protect yourself, invest in high-quality companies that have growing revenues, proven management teams, expanding market share and strong financial ratios. These marijuana companies are financial train wrecks. They're not even just bad, they're horribly bad. You will lose your money if you put money into these companies. How much can you lose, what they're only trading at $0.50 or $2.00 dollars. I can't lose that much, no you can lose 100%. You can lose every single dollar you invest in these companies. You probably will, most of these companies won't be around a few years from now. When marijuana does become more commonplace and legal, you're going to see big companies with lots of cash just step in and wipe out the whole industry just like every other time anything's happened with you know social changes.
The big companies with hundreds of millions of dollars are going to come along and squash these mom-and-pop shop marijuana companies, so regardless of what you're reading on the internet, or you're hearing about in whatever newsletter or pump-and-dump article. Avoid these marijuana companies, they're a bad investment you'll lose money and that goes for 90% of them at least. I'll make a blog entry with some examples and reviews of the actual specific companies, which you can check out at www.PeterLeeds.com. It'll tell you which companies are good and which companies are not good and I'm telling you right now spoiler alert, almost all of these companies are extremely dangerous to you as an investor. Stop believing what you're reading in these "Pump and Dump" articles and all these people who are promoting the concept. So that was a little bit long-winded. Sorry for that, and we weren't even supposed to be making this video, but I feel like I needed to. I hope this helps on what the Top Pot and Marijuana Penny Stocks are. If you have any questions about this whatsoever, please just reach out to my team and I in the comment fields immediately below this video and we will get back to you right away. Please subscribe to the channel if you haven't already. I look forward to helping you guys, you guys are awesome! Thanks so much, take care.