Any excitement at seeing the Dow at its highest level is going well as soon as we consider the buzz around the pot stocks.

Weed stocks, such as Canada-based Tilray, shed light on the market and suggest many 20-year speculators. Hey, maybe I can retire for 30 years. takes on a whole new meaning for those who invest in cannabis companies.

Do 10 times your investment in a few months? What are you doing?

No doubt the Dow is also noticeable. The Dow Jones Industrial Average closed Thursday at 26,656.98 points, up 251.22 points, or 0.95%.

The Dow Jones surpassed its record of 26,616.71 on January 26th.

Really? Stocks continue to climb, even though the Federal Reserve is expected to announce that it is increasing short-term rates by a quarter point on Sept. 26? And the Dow Dow has not blinkered this week as the US and China have racked up more tariffs, which could reduce car manufacturers' profits?

Giddy is the word of the week for Wall Street and Weed.

Still, many experts reserve terms such as "bananas", "bubbles" and "air purchase" for the reefer rally, not the bull market.

Since the global stock market has weakened for part of this year, the Dow is only returning to previous highs. We expect a gain of about 7.8% for the Dow since the end of last year until Thursday's close.

On the other hand, we expect a gain of about 1,000% in about two months for a marijuana stock called Tilray.

Tilray is the new Tesla. Tilray filed its initial public offering in June with an introductory price of $ 17. He began trading in July at around $ 23 per share. It closed on September 18 at $ 154.98 per share.

And then, the stock jumped to about $ 295 on Sept. 19, but it closed at $ 214.06, up $ 59.08 or 38.12 percent.

But Tilray had difficulties Thursday. It closed at 176.35 dollars per share, down from 37.71 dollars per share or 17.62 percent.

NASDAQ-listed Tilray was worth nearly $ 20 billion and caused a sensation.

"Can you spell dot-com, around 1999 or bitcoin, 2017?" asked Robert Bilkie, president of Sigma Investment Counselor in Northville.

Bilkie and other experts say investors chasing these cannabis stocks may be burned, much as we saw when dot-com and bitcoin bubbles erupted.

The price of Bitcoin, for example, reached nearly $ 20,000 at the end of 2017, compared to only $ 1,000 at the beginning of the year. But it is now at $ 6,415 – down nearly 68% from the highs.

Regardless, investors in marijuana stocks continue to be blinded by green lights.

On the plus side: The use of marijuana for recreational purposes will be legal in Canada on October 17th. Tilray also announced that the US Drug Enforcement Administration will allow it to import marijuana for clinical purposes at the University of California at San Diego.

Michigan voters will of course decide on November 6 to legalize the use of marijuana for recreational purposes in the state. Currently, nine states allow the recreational use of marijuana and 31 states allow medical use. Marijuana remains illegal under federal law.

What really happens next, it's the guesswork of whoever. But it is wise to pay attention to some of the potential side effects here of becoming too high on marijuana stocks.

SEC concerns?

First, we must expect some marijuana stocks to sell on a large scale. It is easy to overestimate your ability to make a lot of money on the next hot thing. Some things are not going according to plan.

Secondly, in some cases, the Securities and Exchange Commission feels something funny.

The SEC warned investors earlier in September that scammers are taking advantage of hot industries, such as marijuana-related investments. It is therefore important to pay attention to potential scams.

The SEC tasked Greenview Investment Partners L.P and its founder, Michael E. Cone, to use more than $ 3.3 million from investors.

Cone reportedly employed boiler room sales staff who made cold calls to investors and promised them annual returns of up to 24% on investments in Greenview.

According to the complaint, Cone used a pseudonym to conceal his previous criminal convictions, lied about having a former US Drug Enforcement Administration officer and claimed to have long invested millions in marijuana-related businesses.

The complaint alleges that, in fact, Greenview had no prior record and that its only investment of $ 400,000 related to a cannabis company that had not yet harvested a crop.

Read more:

There is no doubt that fraudsters will unleash the latest rally and the imminent legalization of marijuana in Canada to defraud investors.

Here's a hint: if someone sends you an SMS or sends you a message on Facebook regarding a guaranteed investment in a cannabis deal, do not give your bank account number.

Why the Dow Dow?

Do not get me wrong, the urge for cannabis is not all that needs to be put forward here. Many people are shaking their heads about the Wall Street stock market rally.

At the present time, however, experts say that the Dow Jones has good reason to go higher with the theory that the US economy remains strong.

"It's not that everyone is excited for any reason – in fact, we've had strong earnings throughout the year," said Amanda E. Agati, Executive Director and Co-Chief Strategist for placement of the PNC Financial Services Group.

Standard & Poor's 500 earnings were up more than 20% for the first, second and most likely the third quarter.

"It's really what makes the market turn," said Agati. "This is not unfounded."

Agati said consumer spending was also strong.

"There is no doubt that business and consumer confidence continues to reach new heights," Agati said.

In the future, she said, the economy should have "a good bit of track" to stay on track.

"We think 2019 can be another good year," she said.

A concern: Will businesses spend some of their cash – and additional money from tax breaks – on new equipment or other capital spending? If that is the case, the economy would gain even more strength, she said.

Get rid of the trade war

Although trade issues are troubling, she said, they are not enough to derail profits or the stock market.

"In general, we would prefer free trade," she said.

But the latest developments in tariffs do not harm the profits of companies either.

"We think it still represents a lot of noise and risk for the moment," said Agati. "We do not think that's enough to derail the market."

The Dow's soaring from there, however, will depend on the overall health of the US economy.

"Constant economic growth is a powerful counterweight to all the usual concerns about stock market performance," said Robert A. Dye, chief economist at Comerica, based in Dallas.

Yet, the economy will not remain strong indefinitely.

"I'm afraid we can witness a cooler economic growth by the end of 2019, starting in 2020," said Dye.

He said that it was very unlikely that the US economy will experience a recession in the next 12 months.

The Federal Reserve has certainly planned to shed some light on the low-interest portion.

Another 25-point rate increase is scheduled for the two-day meeting from 25 to 26 September. And many investors are also anticipating a further rate hike in December. Such moves, however, have been very well telegraphed, so they're anticipated by Wall Street traders.

"So, if the Fed follows this scenario, which seems very likely, it should not have an impact on the stock market," said Mark Zandi, chief economist at Moody's Analytics.

However, Zandi noted that investors are faced with many cross currents.

"Tax cuts on large companies have boosted share prices, but rising interest rates and the escalation of the trade war have been a major hurdle .Net-net, the stock market is not very advanced ".

Bulls, however, have more room for the global market, as corporate earnings growth has continued to exceed expectations.

"Investors have underestimated the impact of tax reform and deregulation, although there was precedence for that during the Reagan administration," Bilkie said.

"Late investors are just starting to realize it."

Even then, investors who just love to party would be well advised to keep an eye out for the next buzzkill.

Contact Susan Tompor: [email protected] or 313-222-8876. Follow Susan on Twitter @Tompor.

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