As we warned, time and time again, 18 months ago…
Incannex Healthcare Limited (ASX:IHL) is turning into a titan of the cannabis sector.
Since our founding post on 7 March 2019 (here), IHL’s share price has gone gangbusters. Our $50k portfolio challenge recently tapped over $500k, when the share price was at 18.5 cents. Although the stock price has come off a little (now at 15.5 cents), we still think it’s significantly undervalued and is set to – at least – double from here.
A question that might be on your mind: Where have we been all year?
It’s a good question.
What’s happening with Trading For Millions?
Removing the Trading for Millions persona for a tick, unfortunately, I had a stroke last year. I’m reasonably fit and approaching my mid-30s, so it caught me by surprise. In fact, I didn’t know anything about strokes at the time or, even that I was having a stroke.
The short story is, I was travelling the world and trading at the time. I started Trading For Millions as a hobby blog and passion project.
My wife and I planned a six-week trip around the world – Asia, Europe, and the US – before returning to Australia. But, unfortunately, I had a stroke on day one of our trip, in Bangkok.
As mentioned, I didn’t know what a stroke was at the time, and that I was having one…I had full movement. That said, while I instantly went completely mute and couldn’t text or write, we thought I had heat stroke. We thought my speech would return in the next couple of days (my mother-in-law was also with us and it happened to her brother around my age).
His speech returned within two to three days.
So, we jumped on a plane to Portugal five hours later. When we arrived, my wife knew something was seriously wrong and took me to hospital. That’s where they confirmed the stroke and kept me there for five days. For most of that time, I was mute…I was texting and writing some words, but my spelling was (and still is) atrocious (thank goodness for spell check!).
At the time of discharge, the medical team wouldn’t allow me to fly for another five days. So, at least I got to see some of Portugal, eat great food and drink delicious wine (for better or worse).
When we set off home to Australia, I had a TIA (mini stroke) on the plane ride home. I was on oxygen for most of the journey to Qatar. There, they hospitalised me for three days before allowing me to fly.
Cutting to the chase, when we finally arrived in Australia, I was rushed to hospital (again) and they performed more tests and diagnosed my stroke. I had a large hole in my heart (called a PFO), which was closed in 2020, and Factor V Leiden deficiency – a hereditary disorder that increases the chances of blood clots.
My stroke definitely turned my world upside down.
But I’m taking small steps, little by little….
In 2020, I was in and out of hospital all year and doing lots of therapy.
It’s not all bad, mind you.
I’m back to writing now!
And my speech has returned…somewhat…recovering around 85–90% to date. I can have a conversation with anyone, but my words don’t come out perfectly like before, which is a real shame. Before my stroke, I often thought my ability to communicate and banter was one of my gifts.
Sadly, no more…
I have apraxia and aphasia of speech, which affects my fluency and my ability to plan my words – especially when talking to someone off the cuff. I’m getting better, mind you. And I hope that I can make a near full recovery in the next six to 12 months.
The best news: Now that I feel that my life’s slowly getting back on track, we’ll get Trading For Millions back up and running.
Our plans for the blog haven’t changed…
Remember, the deep-value investing $50k challenge focuses on identifying potential turnaround targets ahead of time on the Live Trading Blog. The portfolio has done reasonably well, thanks to IHL, and we’re nearly at a position to introduce a second deep-value stock. Our main focus is growing our readership, and talking about one stock doesn’t do us any favours.
On the readership side, incredibly, we have doubled our number of members this year – despite not writing one post.
Let’s see what a couple more stocks and posts could do for our website.
We’re still deciding what to do with the short-term trading blog – either 1) mini posts/updates that support the stocks on the Live Trading Blog, or 2) starting another mini portfolio challenge, with, say, $10–50k. The idea would be to compound the portfolio towards the million-dollar mark – the exact blueprint we showcased in Trader University, our free trading course.
The bottom line: We’ll continue putting our money where our mouth is on the blog, researching and writing about companies we believe offer mouthwatering returns. We understand that we can’t please everyone. But we will do our best to help others and get the word out about stocks we believe in. So we would appreciate your support in sharing our blog links around to help us grow.
Prior to sharing our latest thoughts on the company (the market has really woken up to the story, however it still has much more to understand), we want to give you a position update. We’ll also share a standard disclaimer before diving into our latest thoughts on the company.
Small portfolio challenge: Position update
When we founded our blog on 7 March 2019, we decided to start a small portfolio challenge alongside it. We weren’t sure how much money to play with at the time. But the blog’s goal has always been to turn a small amount of money into a million bucks plus. So, we decided to stick to a nominal amount of $50,000 to keep things interesting.
The Trading For Millions portfolio is held in a nominee account for privacy purposes and is filtered to only show IHL. Here’s the latest position update, dated 22 December 2020:
The blog’s shareholding might not seem like much compared to your position. But we’re happy with how our small portfolio challenge is going. Our initial $50,000 investment has turned into ~$403,000 – not a bad return. We also hold significantly more stock across numerous other accounts.
And while some people call us baggies because we don’t own and talk about other stocks on the blog, why would we? The easiest thing to do is nothing and keep holding IHL, while it surges to new highs.
Remember, our low-end share price forecast of 23 cents has nearly been hit. In August 2019, when we made that forecast, we didn’t know the company’s business plan would be derailed because of COVID-19. That said, we did say: “That estimate assumes broader markets hold up, mind you.”
IHL’s share price is clearly heading past 23 cents very soon.
Remember, we also mentioned in our August 2019 post that “our best-case share price target remains at 33 cents plus”.
Focus on the word “plus” in that sentence…
The real story is starting now and we think IHL is going to the Moon. Of course, we own a lot of stock, so take our words with a grain of salt. But at least we have put our money where our mouth is for the last two years. With that in mind, prior to sharing our latest thoughts on the company, please read the standard disclaimer.
Standard disclaimer: Do your own research
This disclaimer section is extremely important, as we don’t have a financial licence. So, unlike other financial sites, we choose to put the disclaimer up the top. We want to hide nothing about our intentions.
You should perform your own research on every company profiled on Trading For Millions. Our analysis is skewed to the positive side, as we hold shares in each company on the blog. Trading For Millions will disclose whether we sell any shares in a company.
We don’t get paid by companies to write research. The incentive is to make good money from the stocks on the blog and hold ourselves accountable.
If you invest alongside us, you do so at your own risk.
Remember, we own shares in companies previewed on the blog, across multiple accounts. For this reason, it’s quite possible, I could be selling every rally with my other accounts. But the above position update is a nominal amount for track record purposes to keep us accountable.
Although we could sell shares in our other accounts, if we earn a poor reputation for picking bad companies, we won’t have many readers! The live tracked portfolio holds us accountable. Plus, with any deep-value investment, we tend to look for massive triple-digit gains.
Trading For Millions will only grow its readership by buying good companies with potential, where you can see the story play out in real time. The goal is to hit multiple home runs in order to grow.
We’re also not in the business of providing formal stock recommendations or financial advice on Trading For Millions.
We are focused on building a track record for now.
If you want to know when to buy or sell a company, you’ve come to the wrong place. Start learning how to trade stocks by reading our free course ― Trader University!
To read the rest of the article, you need to sign up to our blog (for FREE). You can do this below. Becoming a member will give you access to our FREE trading course, Trader University. You will also receive email updates from our Deep Value Investing blog, documenting our live trading journey and the future small portfolio challenge.
Let’s get stuck into the company’s latest story…