Don't Be Part of the 99%
Follow the money... Some of the world's biggest firms are moving into one growing industry... It's time to pay attention to cannabis... 'I didn't pull my punches'... Don't be part of the 99%...
Editor's note: The Stansberry Digest team is in Bluffton, South Carolina this week for our annual Spring Editors' Conference.
Every year, our analysts and closest business contacts get together for a few days to share their top ideas and newest research. Discussions at these events have been responsible for some of our most successful recommendations and most popular new services over the years.
While we're away, we're featuring a special series from our colleague Dr. David "Doc" Eifrig.
As regular Digest readers know, we recently held Stansberry Research's first-ever Cannabis Investing Event. And given his vast experience in both finance and medicine, Doc's own shifting opinion on this industry has been a major reason why.
In today's essay – excerpted from Doc's free daily Health & Wealth Bulletin – he explains why he has recently become interested in the cannabis industry for the first time.
We hope you enjoy it. We'll return to our normal fare later this week. Here's Doc...
His face was hidden in shadow, but his words were clear...
"Follow the money."
This cryptic advice from the legendary Watergate informant "Deep Throat" sent journalists Bob Woodward and Carl Bernstein in the right direction. Soon, they followed money transfers that unveiled the corruption in the Nixon administration.
The phrase is from a scene in the 1976 political thriller All the President's Men, about the real-life Watergate scandal that brought down President Richard Nixon.
Today, "follow the money" is a mantra for journalists and investigators all over the world. When reporters start an investigation, they want to locate a paper trail.
As smart investors, we tend to do the opposite of following the money...
We stay away from what we refer to as the "dumb money." We're not following the herd.
We're contrarians. We often take the other side of those bets. We've explained before in the Digest why being a contrarian is profitable.
But I (Doc Eifrig) believe there are times in investing when you do want to follow the money. Take insider buying, for example.
Legendary fund manager and author Peter Lynch describes it best in his book One Up on Wall Street...
There's no better tip-off to the probable success of a stock than that people in the company are putting their own money into it...
There's only one reason that insiders buy: They think the stock price is undervalued and will eventually go up.
Following the money after a few executives buy large amounts of shares of their own company is usually a smart move. After all, nobody knows the company better than the folks who run it.
Today, we think it's a good idea to follow the money, but not from company insiders – from corporate America.
A few of the biggest firms in the world are moving money into one growing industry... and it's intriguing.
We're talking about legal cannabis.
Over the past few months, major blue-chip companies have made bets on the future of marijuana...
The deals have been big, too, with an attempt to consolidate the industry.
It started in August 2018, when beer giant Molson Coors Brewing (TAP) announced a partnership with Quebec-based cannabis grower Hexo (HEXO-TO) to develop cannabis-infused beverages.
Two weeks later, alcohol conglomerate Constellation Brands (STZ) shelled out $4 billion for 37% of Canadian marijuana grower Canopy Growth (CGC).
And finally, in early December, cigarette maker Altria (MO) got into the game. It paid $1.8 billion for a 45% stake in leading cannabinoid company Cronos (CRON). This firm primarily invests in Canadian medical-marijuana companies.
All you have to do is follow the money to know that cannabis is more than a wild speculation...
These major alcohol and nicotine companies are pouring in billions of dollars to get a piece of the action.
Similar to how it's a wise idea to follow suit after insiders buy their own shares, these alcohol and tobacco companies know the cannabis space better than most. They're very similar companies. They operate under similar regulations and have successfully navigated them for years.
If these giants are moving money into the marijuana industry, it's time to pay attention.
There's also no doubt this industry is still in its infancy and has plenty of room to run...
According to Grand View Research, medical and recreational cannabis sales are projected to skyrocket to $146.4 billion by the end of 2025. It may eventually surpass both the soda and tobacco industries.
And think of all the possibilities for growth...
It may not be long before cannabis-infused beverages could become mainstream. We've even seen beauty products using cannabis. One day, we could see companies like Grubhub (GRUB) or Uber Eats delivering cannabis to your doorstep.
With that said, I'm usually conservative when it comes to investing...
Some of the folks here at the office even tease me about it.
But this "sleep well at night" approach is my way of delivering fantastic research that helps you make money, understand investing opportunities, and have a better retirement.
For months, readers have asked for advice on how to make money in the cannabis industry.
But I'm no cannabis expert...
Instead, when it comes to cannabis, my publisher Stansberry Research patiently waited for both the right time and the right talent to give you the biggest advantage in this still-very-new market.
It has the potential for big gains... but also big risks if you don't understand how to invest safely.
And I'm glad we made the decision to wait...
Back when cannabis stocks were going "vertical" last year, it was clear to us that these stocks were in a full-blown mania. And as you well know... whether it's tech stocks in the late 1990s, housing in the mid-2000s, or bitcoin in 2017, all manias end the same way...
Disaster.
Regular Digest readers will recall that my colleague Justin Brill wrote an issue back in September, which explained that it was exactly the WRONG time to buy. As he wrote...
Unfortunately, we can't know in advance just how long (or how far) this mania will run in the meantime...
It could continue for several months... or reverse tomorrow. But if we had to bet, we'd guess it ends sooner rather than later.
The steepness of the rally in many pot stocks, and the suddenly extreme public bullishness toward the sector, is reminiscent of the "crypto" mania in early December. The prices of most of these assets topped within weeks.
Since then, bitcoin has fallen nearly 70%. Most other cryptos have fallen more... And many have disappeared altogether.
And sure enough, soon after that, plenty of these high-flying cannabis stocks came crashing down. We've been keeping a close watch on cannabis ever since...
We knew a time would come when prices would level out... the industry would begin to boom in earnest... and the worthy cannabis companies would start to rise to the top.
Today, thanks to our newest recruit, we have reason to believe that time is now...
After six months of searching, we've hired a senior analyst who is one of the most impressive people I've ever interviewed... Thomas Carroll.
Thomas' background is in health care. As regular readers know, I spent years on Wall Street and in the medical field. So I didn't pull my punches...
I can tell you that Thomas is one of the smartest analysts I've met over my more than 30-year career. If I was going to personally invest in a market like cannabis, Thomas is the exact analyst I would turn to for the best insights.
I am confident we have found the right analyst to lead this effort, and that now is the right time to begin offering this information to our readers.
Thomas has my complete trust and support. I encourage you to give him your full attention and listen to what he has to say.
According to Thomas, we're about to see an incredible shake-up in the world of cannabis investing. And 99% of Americans could miss their best chance to invest in cannabis before the biggest gains are gone.
Don't be part of that 99%.
Editor's note: Last week, during our first-ever Cannabis Investing Event, Thomas detailed the historic opportunities in cannabis... why now is finally the right time to begin investing in the industry... and what you need to know to profit today.
Unfortunately, we can't share a replay of the event in its entirety. But through this Wednesday, you can catch a full recap of what happened – including clips from the night of the event – right here.
New 52-week highs (as of 3/29/19): Automatic Data Processing (ADP), BHP (BBL), Hershey (HSY), Ionis Pharmaceuticals (IONS), Ingersoll Rand (IR), McDonald's (MCD), Nuveen Municipal Value Fund (NUV), PepsiCo (PEP), Procter & Gamble (PG), Starbucks (SBUX), and W.R. Berkley (WRB).
Several more subscribers weigh in on the recent cannabis "controversy." What do you think about our firm recommending cannabis stocks for the first time? Let us know at feedback@stansberryresearch.com.
"We have heard from almost all of the Stansberry editors lately, (actually again, since it seems to come up every several years in one form or another) trying to explain to some subscribers that financial education and enriching subscribers' own bank accounts is their main purpose. It appears you are receiving multitudes of mail from disgruntled members concerning 'pot stocks'. Are you getting enough to start a socially responsible stocks newsletter? One that will not make their bank account feel good but will make their hearts happy. My advice to them is to stop potificating (pun intended) and use the valuable education and resources they have received from Stansberry to guide their own investing. Stop waiting for SR to tell you what to do with your own investments. They are offering to guide us not coerce us." – Paid-up subscriber Dennis L.
"Dr. Eifrig, as a subscriber of your Advanced Options and Retirement Trader advisories, I wanted you to know how much I enjoy your knowledge, wisdom, and opinion.
"I am appalled that other readers would judge and criticize you regarding your recommendations regarding cannabis or any other recommendation you make to involve politics, etc. We are all adults, (for the most part) and should make our own individual decisions that serve us best. Please don't let any ridiculous letters curb your enthusiasm for what you do for your subscribers. To our detriment as a society, we have allowed agendas to wussify our children, masculinity of males, and the main sheep society as I call them. I sincerely enjoy your work and can decide on my own how I choose to proceed but great advice is the start of that process.
"Last, I am enjoying learning to trade options through your services but am not very good at it yet. Although a fairly simple concept and am above room temperature IQ (past jobs, engineer, airline pilot) I still struggle. I will keep trying and hope it all settles in my mind correctly soon. Thanks for all you do Doc!" – Paid-up subscriber Bob G.
"I have been wanting to share my story but never really knew how. With this time in the rise in natural medicines, suppose this is good as any time.
"I have for years been plagued with pains, seemingly from another planet sometimes, since 1997 when I 'broke' my back while serving in the military. It's been a long 20+ years to say the least. I have been to more doctors than most, some said I would be in a wheelchair within 10 years of the incident... I was discharged in 2003. After multiple years of therapy and no real solutions they had me on nine different medications with a few doses up to three times a day. My mind and body were a complete wreck.
"In 2017 I had moved multiple states away to a state with a better climate to a home we were lucky enough to buy at auction. Setting up a doctor prior to the move was useless. When I arrived I made my calls to the doctors for an appointment I wasn't even in the system. Sad to say it took a year and a half to get me an appointment with the VA.
"Without medications for that period, I had agreed to let my new neighbor be my natural herbalist and tried [cannabis]. For the last year I am happy to say that my symptoms have been manageable. I can actually feel my legs again, I'm still walking, not without pain, but walking none the less. I sleep better and longer, I eat better because I have an awareness about what I put in my body now. Research what you are putting in your body! After realizing what the easy fix medications were doing to me, I made a choice and will never go back to just taking whatever they prescribe to me." – Paid-up subscriber B.H.
Regards,
Dr. David Eifrig and Justin Brill
Bluffton, South Carolina
April 1, 2019