Jason Wild’s Fund Is Over 70% in Cannabis, How About Yours?

What I Learned from Talking with Jason Wild of JW Asset Management

Jason Wild of JW Asset Management has averaged 27% annualized returns after fees for over twenty years. I wrote a post two weeks ago asking why so few were following Jason and his amazing track record. I followed that up with a spotlight on Canopy Rivers (Canada: RIV, OTC: CNPOF), which when its most recently announced transaction closes, Jason and his fund will own 24%.

Jason is also the Chairman of Terrascend (Canada: TER, OTC: TRSSF). And as of right now, has over 70% of his over $2 billion under management invested in cannabis.

I spoke with Jason recently and I want to share my thoughts and highlights from our discussion. (Jason has agreed to a follow-up interview late next month or in early March as well).  

1.     “I don’t run my fund to raise money. You have to invest your money like you don’t care what your investors think,” Jason told me. This is a superpower! One of the things that is hardest to deal with in my experience as a money manager is investor feedback and expectations. I cannot emphasize how important it is to invest without fear. Jason told me he learned from his entrepreneurial father not to be afraid of failure in whatever you do.

2.     Money managers have to be able to stomach volatility and not be afraid to be down if they want to outperform. In 2019, his fund was down 22% and it wasn’t the end of the world for him. He wasn’t worried and rebounded by soaring 140% after fees in 2020. There is no way you are going to outperform in the long run unless you are really comfortable with volatility and not worried about occasionally underperforming in any one year.

3.     Jason, just like Fred Liu with Hayden Capital believes in concentration and concentrated positions. In fact, Terrascend now represents the majority of his fund’s assets and cannabis in general is over 70% of his fund. Again, I think the lack of conventional thinking and lack of fear of volatility leads Jason to make outsized investments that have compiled a long-term track record that is one of the best of recent memory.

4.     He is not afraid to make decisions and then change course. A great example is that from 2014 to 2018 he was an early and fervent investor in Canadian cannabis companies. When he saw that Canada was not shaping up to be the great opportunity he had hoped it would be, he sold out of most of his Canadian cannabis stocks. And in a 180-degree turn he started investing in U.S. cannabis companies. Jason also took this insight to lead Terrascend, which was only focused in Canada, to expand into the U.S. He was decisive and this quick action has led to recent eye-popping returns.

5.     So many investors get stuck in their ways or define themselves by a style, a stock or an industry. I wrote my thoughts on identity and investing. Great investors evolve and go where the opportunity is, not where it was. And Jason is a great investor. In retrospect, Jason has identified four distinct periods in his twenty-two-year career. When each period ended, he realized that the way he made money previously was over. He embraces the need to evolve to take advantage of the next opportunity. His shift from Canadian cannabis to U.S. cannabis is great example.

6.     “I’m wired that I can’t sell a stock if it is going up, as long as the fundamentals remain strong, and I often buy more higher.” He is a big believer in relative strength and thinks that the biggest mistake investors make is to hold to their losers and sell their winners. I wrote about my thoughts on this in a post on Power Law Dynamics.

7.     Jason thinks U.S. cannabis companies will be allowed to trade on US stock exchanges in the next twelve months or so, much sooner than expected thanks to the recent election results in the state of Georgia that handed the Senate to the Democrats.

I’m really looking forward to talking to Jason again and learning more from him. You can follow Jason on Twitter and be on the lookout for upcoming interviews from Jason with Howard Lindzon and RealVision.

Now excuse me as I have to go back to researching cannabis stocks…