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Over the next two days, we will present a series of special essays from Matt McCall, editor of Beginner investor. In his essays, Matt explains how to get into a small stock early and wait until he makes the jump to a big traditional stock market can represent gains of thousands of percent. Because you invest in these stocks before they trade on the main stock exchanges (which increases liquidity and access to huge reserves of institutional capital), this means that this investment style has some similarities with placing your money in a private company before going public. And with the right company, it can make a huge difference. So, enough introduction of me. Now let's talk about Matt to discuss the power of investing your money in high quality stocks before their IPO on the regular markets. Enjoy. Jeff Remsburg |
How to make huge returns of "pre-IPO" investment
Imagine for a moment that you are the CEO of a company involved in the growth of the legal marijuana business.
You are in an industry that is virtually guaranteed to continue to prosper over the next decade. Your company is surfing – and will continue to drive – in a historic "tailwind".
Earning money in these situations can look like stepping off a boat heading for a huge fast flowing river. You can practically make your way to profits.
As the CEO of marijuana, what are the most important numbers you look at every day?
Is this a graph showing the growth in legal marijuana sales in the United States?
Is it the number of states that have legalized marijuana in one form or another?
Do polls show how many Americans support the legalization of marijuana?
All of these are essential, as are your company's cash flow, sales growth figures, and so on.
And yet, none of them is primarily concerned with the CEOs of the marijuana industry. But I will show you what it is.
If you were a marijuana executive, you'd probably be obsessed with this chart …
Here's the history of prices for the Cronos group since the middle of 2016. In July of the same year, the stock traded for less than $ 0.25 per share. In February of this year, he had climbed to $ 25.10. It's a return of over 10,000% in less than three years!
With this type of return, any CEO – or any investor – thinks of early retirement … a total and total financial freedom.
You want the beach house you dream of? A new Porsche? A return of 10,000% on your shares can make these things and much more possible.
The Cronos chart is a very big contract in the marijuana industry right now. And yet, there is a unique reason behind this incredible performance that very few people are aware of. Even less understand it.
In this research report, I will explain why Cronos has exploded more than 10,000% in less than three years. All this is due to an anomaly in the financial markets … an anomaly that could help us generate huge returns in the years to come.
I will show you how to make a lot of money with legal marijuana using something that I like to call "Stocks of Riders". You can also consider them as stocks "prior to the IPO" because if you do it right, you're not sure. d invest your money in these companies BEFORE their IPOs in important markets – which would probably mean that you will use your money before billions come in from Wall Street and huge multinational corporations.
*** Jumping of minors to majors
I am asked questions almost everywhere about marijuana stocks. The buzz continues to grow and it's easy to understand why.
Marijuana and its derivatives have been banned for decades. But a wave of legalization is beginning to sweep the world. Sales in the United States and Canada are growing by more than 20% a year … and will do so for many years. The legal marijuana industry should be multiplied by 10 over the next decade. This will create mbadive new markets and winning stocks.
Ironically, although many US states have legalized marijuana, it is still federally illegal and clbadified as a Schedule 1 drug. This category is meant to include the most dangerous drugs that are addictive and have no medicinal value. It includes the likes of heroin and ecstasy.
Marijuana does not belong to this category and I am confident that it will eventually be reclbadified. Meanwhile, the current legal situation has many ramifications. Few of them matter as much as the repercussions on financial regulation.
Most marijuana companies can not trade on the New York Stock Exchange (NYSE) or NASDAQ, the two largest stock exchanges in the country.
It's easy to see why. Major stock exchanges will not approve the trade of companies that affect the plant or engage in activities that are deemed illegal at the federal level. As a result, most marijuana companies are trading in what is known as the "over-the-counter" market.
OTC means "over the counter". The OTC market has long been a place where small businesses make their shares available to the general public. The requirements are not as strict as those of the NYSE or NASDAQ and their cost is much lower – these two badets are valuable to a growing business.
Here's where it gets interesting: As legalization becomes more widespread and marijuana is reclbadified, many of these companies will be able to pave the way – or 'jump' – to major exchanges.. It's like being called minor leagues in the major leagues. When you are already investing in these companies and they are "jumping" into a major stock exchange, it's almost as if you had a pre-IPO price.
This allows OTC shares to benefit greatly. But when they do, the first wave of big gains will have already been banked.
This is especially true in the marijuana industry. Many people really want to invest in marijuana stocks. Normally, when many people want to invest in a sector, they still have a lot of stock to buy. But because of the federal marijuana laws, there are not many marijuana stocks that are trading on a major US stock market – today they are less than 10.
As you can imagine, stocks listed on the NYSE or Nasdaq receive an extraordinary amount of attention and money. They have skyrocketed hundreds, if not thousands, of percent.
It is an anomaly that shattered the small group of marijuana stocks on the US list. This has certainly helped companies like Cronos to soar. It was as if 1,000 really thirsty people were trying to buy 20 bottles of water.
I am confident that more and more marijuana stocks will go to US stock exchanges and attract a lot of money from investors. Finally, there will be enough listed shares, but this will not happen for at least a few years. This leaves us a lot of time to make a lot of money … thanks to this anomaly of the financial markets.
To help you understand the type of opportunity I'm talking about, let's go back to my previous example of the Cronos group.
*** Stocks of rider over time
Cronos was the first Canadian cannabis stock to jump to a major US stock exchange when it began trading on NASDAQ on February 27, 2018.
It's hard to believe that it's been about a year since Cronos became the first company in direct contact with marijuana to jump on a major US stock exchange. This shows how new this phenomenon is. We're still in the early stages, that's exactly why it's so convincing and perfect for us here at Beginner investor.
In the foreseeable future, identifying these stocks prior to their "IPO" on a major stock exchange will be one of the most reliable strategies for finding big winners in the marijuana industry.
Cronos is an excellent example of how it is profitable to invest in equities before they reach a major US market. Let's go back to December 27, 2017 – before the company announces its listing on NASDAQ. It traded in the over-the-counter market under the symbol PRMCF.
In a newsletter I was writing at the time and who was calling NexGen profit multiplier, I had recommended Cronos when trading at $ 5.50 on OTC stock exchanges. Given the short-term trading strategy of the newsletter, we sold the stock in just 48 hours and recorded a profit of almost 50%. Pretty good for a few days of work.
The purchase of Cronos in the over-the-counter market was somewhat risky, especially since there was no precedent for marijuana-producing companies going to a major stock exchange. . But the risk was more than offset by the huge upside potential of marijuana stocks, especially as we invest in a leader in a growing industry.
It was a fantastic short-term win, but let's now look at Cronos with the long-term strategy we're using here. Beginner investor.
On February 27, 2018, Cronos shares joined NASDAQ and made history as the first Canadian marijuana company to participate in a major exchange with the United States. Cronos closed on Friday before the announcement at $ 7.01. A week after the announcement, it has traded up to $ 10.39, an increase of almost 50%.
Nearly three months later, on May 23, 2018, Cronos made another leap into Canada from the TSX Venture Exchange to the Toronto Stock Exchange (TSX). Two weeks later, the stock was up 28%. (Note: Most Canadian marijuana companies start their public life on the TSX Venture Exchange.The move to the Toronto Stock Exchange equates to an increase in the number of over-the-counter transactions on the New York Stock Exchange in the United States. .)
As you can see in the graph above, both jumps generated significant short-term benefits. But long-term benefits my jumper storage system is based on. Fourteen months after my initial recommendation, Cronos was negotiating more than $ 22, an increase of 300%.
Keeping the long-term gains of the Stock Jumper effect is worth it, would not you?
Take for example the example of Cronos. Two months before joining the NASDAQ, its average daily volume was 280,000 shares. Today, its average daily volume rises to nearly 16 million shares. This is a jump of 5,600% of the average volume in 14 months and a direct result of the increase.
Our goal is to identify stocks that can jump 10X in the next few years. These are the types of earnings that can change your life. .
*** Start early
In the past year, only a handful of marijuana companies have made the move to a major US stock market. They are some of the world's biggest names in marijuana: Canopy Growth, Aurora Cannabis and Aphria.
When Canopy was trading in the OTC market in April 2018, the company was recognized as a leader by those of us who are following the marijuana industry closely. Most investors may have heard the name by the way, but had no real knowledge of the title. And more importantly, they did not have any Canopy shares.
On May 24, 2018, Canopy became the first marijuana company to trade on the NYSE. The first day of trading was, to say the least, unimpressive. The stock dropped 6% and short-sighted critics concluded that marijuana stocks were not ready for the big time. Well, we all know now that they could not have been more wrong. Canopy more than doubled just six months after the jump.
Since only a few marijuana stocks have managed to move to a major stock exchange, there are many more opportunities in the future. My system has already identified several companies that, in my opinion, will announce their intention to set up in the near future.
First, it is important to explain why the actions that achieve this jump are good investments. And just as important is my Stock Jumper system to identify the best opportunities for us.
We will resume this in tomorrow's edition of Digest.
Until next time,
Matt McCall
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