Financial News

[Soxbadger]

8 minutes ago, southsider2k5 said:

Seems like a bad time period to me with the Trump team in the White House and talking about cracking down again.  If they decide to start enforcing federal law in states that have legal status, this could get ugly.

SS2K,

Cronos is a Canadian company and does not sell in the US. Its about to become legal at the federal level in Canada (which is why they are all going up.) Seagrams bought a huge stake in Canopy and rumors are other major beer/liquor companies are considering large stacks in companies like Tilray or Cronos.

If it ever became legal in the US, these companies are going to have massive advantages in breaking into the US market. Cronos is also supplying to Germany.

 

https://www.theglobeandmail.com/globe-investor/investment-ideas/nasdaq-to-get-first-pot-listing-as-cronos-group-joins-exchange/article38110213/

So the US enforcement wont impact Cronos at all because they actually dont sell any product here. 

Edited September 7, 2018 by Soxbadger

[southsider2k5]

1 minute ago, Soxbadger said:

SS2K,

Cronos is a Canadian company and does not sell in the US. Its about to become legal at the federal level in Canada (which is why they are all going up. Seagrams bought a huge stake in Canopy and rumors are other major beer/liquor companies are considering large stacks in companies like Tilray or Cronos.

If it ever became legal in the US, these companies are going to have massive advantages in breaking into the US market. Cronos is also supplying to Germany.

 

https://www.theglobeandmail.com/globe-investor/investment-ideas/nasdaq-to-get-first-pot-listing-as-cronos-group-joins-exchange/article38110213/

So the US enforcement wont impact Cronos at all because they actually dont sell any product here. 

Got it.  Interesting.  I have not explored this sector at all in the name of full disclosure.

[Soxbadger]

1 minute ago, southsider2k5 said:

Got it.  Interesting.  I have not explored this sector at all in the name of full disclosure.

Im kicking myself a little because I was watching the 3 I mentioned for a while and could have gotten in really low on all of them. I didnt make a move until after the Seagrams deal and when some mainstream "investment" blogs/websites started pumping them. 

I personally think its going to be like the tech bubble. If you got in early, didnt risk huge sums, youll probably get a good return. But I think that some of these are going to eventually crash hard when the dust settles.

[southsider2k5]

1 minute ago, Soxbadger said:

Im kicking myself a little because I was watching the 3 I mentioned for a while and could have gotten in really low on all of them. I didnt make a move until after the Seagrams deal and when some mainstream "investment" blogs/websites started pumping them. 

I personally think its going to be like the tech bubble. If you got in early, didnt risk huge sums, youll probably get a good return. But I think that some of these are going to eventually crash hard when the dust settles.

Absolutely.  The cycle is always like that.  You will get the run ups, the M&As (which sounds like where they are now) and then the money dries up and the bubble bursts.  Then the clear market leaders takes over, consolidation happens, and you get your couple of companies that survive.

[bmags]

Right and I buy a bit the high evaluations on the basis that if legalization occurs in US these companies would have legit infrastructure and process to expand/set up new hq in us or whatever to take advantage.

This is applicable even with medical marijuana in us since that is where they began their efforts.

 

edit: that said that puts them at huge risks of runs on any news of snap back against marijuana legalization in US states.

[Soxbadger]

11 minutes ago, bmags said:

Right and I buy a bit the high evaluations on the basis that if legalization occurs in US these companies would have legit infrastructure and process to expand/set up new hq in us or whatever to take advantage.

This is applicable even with medical marijuana in us since that is where they began their efforts.

 

edit: that said that puts them at huge risks of runs on any news of snap back against marijuana legalization in US states.

I agree. Also Germany is a big market as well. The US is really crippling its domestic companies with their outdated laws. When/if marijuana becomes legal, I expect some major alcohol or tobacco companies will look to buy/partner with some of these Canadian companies. It just makes too much sense, which is why I think the 3 major ones are pretty safe bets.

[bmags]

1 minute ago, Soxbadger said:

I agree. Also Germany is a big market as well. The US is really crippling its domestic companies with their outdated laws. When/if marijuana becomes legal, I expect some major alcohol or tobacco companies will look to buy/partner with some of these Canadian companies. It just makes too much sense, which is why I think the 3 major ones are pretty safe bets.

Alcohol/tobacco make most sense but I bet it will be weirder than that. I could easily see many different verticals buying up based on a specialty in retail or transportation or networks or whatever.

[Y2HH]

On 9/7/2018 at 10:48 AM, Soxbadger said:

I agree. Also Germany is a big market as well. The US is really crippling its domestic companies with their outdated laws. When/if marijuana becomes legal, I expect some major alcohol or tobacco companies will look to buy/partner with some of these Canadian companies. It just makes too much sense, which is why I think the 3 major ones are pretty safe bets.

They'd only do this if there was a harsh barrier of entry, and it doesn't appear that there is given the number of companies sprouting up around the world. Odds are, given the massively bubbled values of those Canadian companies you mention (based on spec buyers, I've looked at their numbers and they're not just overvalued, they're .com era overvalued), the American alcohol/tobacco companies would simply do it on their own since they already know how to process -- and more importantly -- distribute tobacco products.

I've seen a similar speculative run on marijuana stocks in the past when US states were passing laws to legalize it.

As a quick example to highlight, Tilray has a market cap of 9.78 billion dollars while as of July they have a whopping 25 million dollars in cash on hand -- with no long or short term investments -- and a net tangible assets of only 33.8 million dollars.

The fact the street is valuing a company with assets of 33 million dollars at 9.78 billion is Tulip mania laughable.

This is classic case of FOMO investing, and the only winners will be the ones that got in early, and get out before the bubble bursts.

Edited September 12, 2018 by Y2HH

[southsider2k5]

Brilliant!

 

[raBBit]

On 9/7/2018 at 10:17 AM, Soxbadger said:

SS2K,

Cronos is a Canadian company and does not sell in the US. Its about to become legal at the federal level in Canada (which is why they are all going up.) Seagrams bought a huge stake in Canopy and rumors are other major beer/liquor companies are considering large stacks in companies like Tilray or Cronos.

If it ever became legal in the US, these companies are going to have massive advantages in breaking into the US market. Cronos is also supplying to Germany.

 

https://www.theglobeandmail.com/globe-investor/investment-ideas/nasdaq-to-get-first-pot-listing-as-cronos-group-joins-exchange/article38110213/

So the US enforcement wont impact Cronos at all because they actually dont sell any product here. 

Constellation Brands put a $4 billion stake in Canopy Growth ($CGC). The stock went up at least 25% upon the news. Cronos Group and Tilray then followed with huge appreciation in a short period of time.

I put a small chunk in Cronos ($500-$1000) because I wanted to ride the weed wave and Cronos has good management. I made over 40% in less than two weeks and got stopped out yesterday. It seems like Cronos and Canopy are in the midst of a significant correction.

Tilray has been incredible though. It IPO'd at 22 in July and was trading over $124 this afternoon. Some people made 5x returns in a couple months. I imagine a lot of people getting in now will end up losing a good chuck of money. This is a company valued at over $11 billion with revenues under $21 million in 2017. It's just an obscene valuation driven by conjecture, FOMO and some impressive volume.  

[StrangeSox]

 

[bmags]

On 9/13/2018 at 7:19 PM, raBBit said:

Constellation Brands put a $4 billion stake in Canopy Growth ($CGC). The stock went up at least 25% upon the news. Cronos Group and Tilray then followed with huge appreciation in a short period of time.

I put a small chunk in Cronos ($500-$1000) because I wanted to ride the weed wave and Cronos has good management. I made over 40% in less than two weeks and got stopped out yesterday. It seems like Cronos and Canopy are in the midst of a significant correction.

Tilray has been incredible though. It IPO'd at 22 in July and was trading over $124 this afternoon. Some people made 5x returns in a couple months. I imagine a lot of people getting in now will end up losing a good chuck of money. This is a company valued at over $11 billion with revenues under $21 million in 2017. It's just an obscene valuation driven by conjecture, FOMO and some impressive volume.  

I think that market is short term expensive but long term I don't see $11 billion as that off. If Cocacola bought it today I'd be surprised if it was much below 10 billion

It is obviously risky because so much depends on regulation, but in 5-7 years I don't think many regret buying this stock right now (I say this, but I would not buy it right now, but I'm just adding that while I don't think this is a good "ride the wave" buy, I don't see this as a total fad either)

[southsider2k5]

Told you guys this was happening the day the tweet came out.

 

[Dam8610]

On 9/13/2018 at 1:20 PM, southsider2k5 said:

Brilliant!

 

Hyperinflation ftw!

[caulfield12]

Amazon is raising its minimum wage to $15 an hour for all US employees.

The change takes effect November 1 and applies to full-time, part-time and temporary workers. Amazon (AMZN) says the $15 minimum wage will benefit more than 250,000 Amazon employees, plus 100,000 seasonal workers.

"We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," said Jeff Bezos, Amazon's founder and CEO. "We're excited about this change and encourage our competitors and other large employers to join us." 

The change applies to Whole Foods and all other subsidiary employees. 

Amazon also said its public policy team will begin lobbying for an increase in the federal minimum wage, which has been $7.25 an hour since 2009.

[bmags]

 

There are a whole bunch of people still with national economic decision making power who have never admitted they were wrong, or worse, even updated their thinking based on overwhelming evidence that they were wrong.

[southsider2k5]

5 minutes ago, bmags said:

 

There are a whole bunch of people still with national economic decision making power who have never admitted they were wrong, or worse, even updated their thinking based on overwhelming evidence that they were wrong.

Clicking through the thing that blows my mind is that the Labor Force Participation rate is still 62.7%  That is almost exactly the same as it was on election day in 2016, and it is still down 5 full percentage points under the max's achieved under Reagan/Bush/Clinton.

This means a full 37% of people would are of the working age are not working, and are probably on a government payment of one kind or another.

[bmags]

5 minutes ago, southsider2k5 said:

Clicking through the thing that blows my mind is that the Labor Force Participation rate is still 62.7%  That is almost exactly the same as it was on election day in 2016, and it is still down 5 full percentage points under the max's achieved under Reagan/Bush/Clinton.

This means a full 37% of people would are of the working age are not working, and are probably on a government payment of one kind or another.

well the full 37% wouldn't be on government dime. Some amount of early retirees and stay at home parents.

One of the big "structural" things we've seen is those claiming disability has declined over the last 4 years.

[StrangeSox]

That 37% includes full-time students and retired people, doesn't it?. Given the boomer bubble moving into retirement, isn't it completely predictable that we wouldn't reach the peak LFPR from the 80's?

Edited October 5, 2018 by StrangeSox

[southsider2k5]

Just now, bmags said:

well the full 37% wouldn't be on government dime. Some amount of early retirees and stay at home parents.

One of the big "structural" things we've seen is those claiming disability has declined over the last 4 years.

Stay at home parents aren't counted in that number.  And like I said, the max is about 68%, so I get that not EVERYONE would be working, but the difference between 5 full percentage points is millions of people who have lost their wage power.

[bmags]

2 minutes ago, southsider2k5 said:

Stay at home parents aren't counted in that number.  And like I said, the max is about 68%, so I get that not EVERYONE would be working, but the difference between 5 full percentage points is millions of people who have lost their wage power.

I thought the only institutional removals were prison, mental institution, armed forces, 65+?

 

[caulfield12]

Even couples who successfully save $1-2 million for retirement can see it quickly destroyed by long term care expenses.

My mom’s assisted living cost in Iowa is $4500 per month, and that’s considered very cheap/affordable.  Nursing homes, $7-10,000 per month...and this is the Quad Cuties, not Chicago, NYC or SF.

It doesn’t take long to run out of assets...until you’re only left with the family home (if it hasn’t been reverse mortgaged to draw out more cash flow), and sometimes even then the government will try to seize that before Medicaid finally kicks in, and being taken care of by the government at the end of life is not a situation anyone would wish for.

There has to be a better way.

 

[The Beast]

Is this cause for concern?

http://www.chicagotribune.com/business/ct-biz-stock-market-falls-20181010-story.html

[Y2HH]

15 hours ago, The Beast said:

Is this cause for concern?

http://www.chicagotribune.com/business/ct-biz-stock-market-falls-20181010-story.html

Was it a cause for concern 8 months ago? Probably not. While I think the fed is being overly aggressive with interest rate hikes, I'm not all that concerned since Wall Street is prone to over-reactions such as this. It's actually of my opinion that they do it on purpose to drive massive sell-offs from regular folks who are quick to get nervous, and then they snap it all back up at bargain prices.

It's like when you see stories about some guy that correctly "called" the last recession (in reality he/she/they simply got lucky) who "sets price target of Apple to 60$" citing bullshit rumor x, y and z, and it causes a short term there is a sell off out of irrational fear. And then 6 months later Apple is trading at 225, but then we don't hear about that guy anymore, or he/she/they pretend they "didn't actually mean it like that".

People like Ron Paul (and others) who have been predicting crashes for like 50 years, often say these things without putting their money where their mouth is. If a person TRULY believes the market is about to crash, they'd sell EVERYTHING they have and put it in gold or something. Only they never actually do.

Edited October 11, 2018 by Y2HH

[southsider2k5]

1 hour ago, Y2HH said:

Was it a cause for concern 8 months ago? Probably not. While I think the fed is being overly aggressive with interest rate hikes, I'm not all that concerned since Wall Street is prone to over-reactions such as this. It's actually of my opinion that they do it on purpose to drive massive sell-offs from regular folks who are quick to get nervous, and then they snap it all back up at bargain prices.

It's like when you see stories about some guy that correctly "called" the last recession (in reality he/she/they simply got lucky) who "sets price target of Apple to 60$" citing bullshit rumor x, y and z, and it causes a short term there is a sell off out of irrational fear. And then 6 months later Apple is trading at 225, but then we don't hear about that guy anymore, or he/she/they pretend they "didn't actually mean it like that".

People like Ron Paul (and others) who have been predicting crashes for like 50 years, often say these things without putting their money where their mouth is. If a person TRULY believes the market is about to crash, they'd sell EVERYTHING they have and put it in gold or something. Only they never actually do.

The fed funds rate is 2.25%.  If the economy can't handle a 2 1/4% FF rate, this economy is a house of cards.

Take a look at this chart and tell me how the fed is overreacting again.  Hell our big problem is WHEN we do get our next recession (not if) there will be nothing left on the books to do to try to fix the economy again.  Interest rates are already WAY under historical norms.  The Fed still has trillions of holdings on the books.  Labor Force participation is already 5% points under historical numbers, so tax cuts will have a limited effect because too many people aren't working anyways.  The deficit is already approaching a trillion dollars annually.  Having a real interest rate was LONG overdue, and probably a great statement as to how artificial and manipulated the entire "economic health" is right now if it still needs tax cuts and 0 interest rates to survive.

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart