Marijuana investors don’t have to idly sit by as the sector consolidates — there’s big money to be made
Will we finally see a rebound in marijuana stocks in 2020?
That’s what cannabis investors are wondering after a rough second half of 2019.
Below is the 1-year chart of the popular marijuana ETF, “MJ.” It’s the Alternate Harvest ETF. Since this ETF contains dozens of stocks that are engaged in the legal cultivation, production, marketing or distribution of cannabis products, it’s a loose proxy for how the broader marijuana industry is performing.
Below, you can see MJ pulling back 43% in the last 52 weeks. Of course, the loss is even greater based on the sector’s high in March.
But there’s something else this chart is showing — something very encouraging. And it suggests we’re closer than ever to that rally we’re waiting for.
***Carving out a bottom in the marijuana sector
For details, let’s turn to Matt McCall, InvestorPlace’s resident marijuana expert.
Matt has been tracking the marijuana sector and making his readers money in the space since 2014, long before it was popular. That’s why he’s earned the name “The Original Marijuana Stock Bull.”
Yesterday, Matt updated his Cannabis Cash Weekly subscribers with a bullish angle on the chart above.
When analyzing the chart of a stock, index, or anything else that has been in a downtrend, it is important for it to find a base. There will be rallies even within downtrends, but these often result in short-term pops that reverse and lead to lower lows.
A base, like what I’ve marked below on the ETFMG Alternative Harvest ETF, is a sign that the sellers are exhausted, and buyers are starting to make their way back into the stock.
This is exactly what we are seeing in the cannabis sector — the selling is subsiding and the buyers are coming out of hibernation.
Forming a base increases the likelihood that the eventual rally will last longer, and I expect that to be the case with cannabis stocks.
***Beyond this base in the charts, there’s reason to be bullish about marijuana based on the increasing odds of federal legalization
If you remember, in late November, the House of Representatives’ powerful Judiciary Committee voted 24-10 to advance the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act.
This was an historic vote — the first time ever that a congressional committee approved a bill to end federal marijuana prohibition.
If eventually passed, the MORE Act would remove marijuana from the federal Controlled Substances Act. This means individual states would be free to enact their own cannabis laws without any fear of federal interference or repercussions.
Building on that, tomorrow, a House Energy and Commerce subcommittee will debate two bills to federally legalize marijuana, one of which is the MORE Act.
The second bill is the Marijuana Freedom and Opportunity Act, sponsored by Rep. Hakeem Jeffries (D-NY). It, too, would federally de-schedule marijuana from the controlled substances list.
This is further evidence of the pressure mounting on public officials to make meaningful marijuana legislative reform.
Given this, we continue to believe federal legalization is inevitable — it’s just a matter of when we’ll reach the final tipping point.
In the meantime, as we wait for this reform legislation, the marijuana sector continues to consolidate … but that doesn’t mean you can’t generate huge returns today, even with stocks trading sideways.
***If you’re a marijuana investor waiting for the sector to turn, why not generate big income in the meantime?
That’s what Matt has been doing with his Cannabis Cash Weekly subscribers.
He’s using a powerful income strategy that can help you earn outsized income — multiples greater than the average dividend yield.
Here’s how Matt put it back in the fall:
… thanks to a once-in-a-decade anomaly in the business world, there’s currently an investment offering 100%+ annual yields.
That’s not a joke and it’s no typo.
Believe me. I know it sounds crazy.
I wouldn’t believe it if I didn’t see it with my own eyes and earn huge yields with my own money.
Again: 100% annual yields.
***Now, if you’re like me, you see “100% annual yields” and get suspicious
Given this, I checked the Cannabis Cash Weekly closed trades report, and here’s what I found — the complete list.
Please note, the below returns are all annualized.
Combined, these trades are averaging an annualized return of 292.53%. So, Matt’s claim of “100% annual yields” holds up.
So, what exactly is Matt doing here?
The Cannabis Cash Weekly strategy involves a type of option known as a “covered call.” If you’re less familiar with options, a covered call is the most conservative type of option.
With a covered call, you own the underlying stock. And then you sell a call option to another investor. This call option gives the second investor the right to buy your stock if it climbs to a certain agreed-upon market price within a certain agreed-upon amount of time. There’s a bit more to it, but that’s the main idea.
Matt’s been helping subscribers generate these huge returns since the fall … and it’s still happening.
Back to Matt’s update yesterday:
We just added our newest trade this morning in Aphria (APHA) … We got a really good setup in terms of the stock’s price and the premium we collected on the calls.
As you may have noticed, the numbers were pretty big. We could earn 7.5% in less than a week if Aphria closes above $5 on Friday. That works out to nearly 685% annualized!
Back to Matt:
This approach can net you thousands of dollars … week after week … for up to 70 different times over the next 12 months.
The most incredible part is that this unique strategy is less risky and potentially much more profitable than just owning ordinary cannabis stocks.
***Let’s check in on another one of Matt’s strategies
Regular Digest readers know that Matt and famed investor, Louis Navellier, recently joined forces to create a limited-time offering — the Power Portfolio 2020.
It’s a basket of just 10 stocks that combine Louis’ “bottom-up,” numbers-based market approach, with Matt’s “top-down,” thematic-based approach.
In essence, it’s a best-of-breed portfolio, engineered to outperform the Dow in 2020.
Now, what’s truly unique about the Power Portfolio is that Matt and Louis offered it with a qualifier …
They’re so bullish on their picks that the service comes with a promise — if the portfolio doesn’t triple the returns of the Dow in 2020, then subscribers will get the Power Portfolio 2021 for free.
When’s the last time you saw an investment product come with such a guarantee?
Given this, I thought we’d periodically track how the Power Portfolio is doing — so let’s check in.
A quick note — the official starting date for tracking will be 12/10, since that’s when Matt and Louis added their final, 10th stock — a bonus pick. But for today, I’m going to use the numbers from when each recommendation was added, dating back to days in December.
In that time, five of the 10 stocks have hit 52-week highs.
Two stocks are showing losses, with the remaining eight all in the black — four of which are already up double-digits.
Collectively, the Power Portfolio is posting a return of 5.3%.
How’s the Dow doing as of the time of this writing?
That means the Power Portfolio 2020 is coming in at more than 350% of the Dow.
So far, so good.
There’s still time to be a part of the Power Portfolio 2020 if you act quickly. Click here for more.
Have a good evening,