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3 Biggest Investing Disappointments of 2018

At the start of 2018, one digital asset and a pair of tech stocks appeared on investors’ radars and offered great promise. However, with the year coming to a close, things did not turn out as expected. Many were dismayed that the three assets turned out to be the year’s biggest disappointments.

Fall of a digital asset

Canada is regarded as one of the Western countries with a strong Ethereum blockchain ecosystem. This second-generation open source software platform was even invented by Toronto-based Vitalik Buterin. Unfortunately, the crypto market went on a tailspin.

Ethereum (ETH) was not spared from the wild cryptocurrency price fluctuations in 2018. Hopes of generous windfall were shattered. The price at the beginning of the year was $993.99, and then soared 74.76% to $1,737.10 in 12 days. From then on, it was a roller coaster ride. By the end of the first quarter, the price was $488.01.

A series of wilder spikes and dips ensued until Ethereum crashed to below $300 in early September. After that long stretch, it tanked to its lowest last week on December 14 to $115.73. It’s very difficult to predict its price or assess its real value.

Hard lessons were learned by investors who invested in a new breed of asset classes they don’t fully understand. Many simply rode on the Bitcoin craze. The relevance of Ethereum is in question. In terms of losses, Ethereum lost 94% in 2018 compared to Bitcoin’s 83%. This crypto asset definitely failed to live up to expectations.

Shaky cannabis e-commerce platform

Many were expecting Namaste Technologies Inc. (TSXV:N) to be the Inc. of weed. The global cannabis e-commerce platform boasts of more than 30 websites in over 20 countries and a wide assortment of products, including CBD variants, vaporizers, accessories, and of late medical marijuana.

It remains a puzzle why ever since the price jumped to $3.74 on September 24, the stock reversed its course. Namaste closed at a low of $1.20 at writing. There are fears that Shopify Inc. and upstart online retailers are the real threats in 2019. Namaste needs more than just strong sales on Thanksgiving Weekend.

The latest is that the company acquired 49% stake in Pineapple Express, a cannabis delivery company. The move will allow Namaste to offer same-day delivery services in Toronto and expand further throughout Canada. At least there’s a bit of good news.

Incredible loss of value for the tech stock

Maxar Technologies Ltd. (TSX:MAXR)(NYSE:MAXR) is one of the biggest letdowns in 2018. Expectations were high when the stock price surpassed the $80.00 mark toward the end of 2017 and stood at the same price on January 4. Technology shares plunged in the recent market selloffs, but Maxar’s fall was unbelievable, to say the least.

The most telling was the 44.54% one-day drop from $35.49 on October 30 to $19.68 the next day. October was a rough month for Maxar after unsatisfactory news on some accounting errors and multi-million impairment losses. What could save the day and appease investors is the higher dividend yield. In summary, the year ahead looks bleak for Maxar.

Free investor brief: Our 3 top SELL recommendations for 2018

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Stock #1 is a household name – a one-time TSX blue chip that too many investors have left sitting idly in their accounts, hoping the company’s prospects will improve (especially after one more government bailout).

Still, our analysts rate this company a firm SELL.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. Maxar and Shopify are recommendations of Stock Advisor Canada.

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