Barefoot Investor Scott Pape reveals the stock he won’t invest in after Aussie loses everything

The Barefoot Investor has revealed the one stock he is glad to have not invested in despite being encouraged by his friend. 

Scott Pape made the comment after a concerned reader wrote in to explain he had lost a great deal of money investing in medicinal cannabis companies.

‘Do you know what is happening with the medical cannabis companies?’ Andrew wrote in a column published in the Daily Telegraph.

Andrew volunteered he held stocks in cannabis sellers AC8 and CGB, but both had been delisted from the Australian stock exchange. 

‘Others are only worth 1/100th what I paid for them! Should I be freaking out?’ he wrote.

In his response Pape could not resist a number of puns as he delivered a harsh downer.

‘Dude, it sounds like you’ve been well and truly smoked,’ he wrote.

Pape said a few years ago it seemed everyone was ‘getting high’ on cannabis stocks.

A comedian friend had even tried ‘super hard’ to convince Pape to have a ‘toke’ on a medical marijuana investment, but the finance guru resisted.

This was despite Pape believing there was  ‘a huge market for medicinal marijuana’ as well as for just plain recreational use.

He cited a National Survey on Drug Use and Health study that showed more Americans smoked dope each day than drank alcohol.

‘Still, the reality is that traders blew up the valuations of these start-up businesses way too much,’ Pape said. 

‘Now the market has come off its high, and there are a lot of marginal businesses that aren’t worth anything like the prices investors paid for them in the boom.’

In answer to Andrew’s question about whether he should be worried, Pape told him ‘the time to freak out was a long time ago’ before his money had all gone to pot.

Earlier this year, Australian Securities Exchange suspended the shares of pioneer medicinal cannabis producer Cann Group after an auditor reported ‘insufficient evidence’ of future funding for the next 12 months.

Cann Group was the first company to be issued with a cannabis research licence by the Australian government’s Office of Drug Control in 2017.

It invested $49 million in a medicinal cannabis glasshouse on the outskirts of Mildura and employed about 40 staff.