by Travis Johnson, Stock Gumshoe | April 10, 2020 6:15 pm
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Source URL: https://www.stockgumshoe.com/2020/04/friday-file-more-on-that-wework-of-cannabis-report/
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Let’s cut through the Bull. For decades people have been consuming marijuana to decades. What makes you think this demand will be diminished? People will still purchase especially in states where the sale is legal. Will this really hurt tenants looking to grow?
I admire your ability to look at the big picture without diving into or worrying about details, I usually go to the other extreme. Maybe a steady market for legal marijuana will be enough to keep all the players afloat, we’ll see.
Hi Travis, thank you for a detailed discussion of the short report. Do you have an opinion on IIPR’s response, which was basically “this report does not merit a response” (although Alan Gold’s commitment to the company was affirmed)? Would you have liked to see them comment on PharmaCann’s situation in particular, or would it be unreasonable to expect them to provide any detail on a private tenant’s situation?
I always like to see detailed responses to short attacks, but in this case the basis of the short attack was so misleading that I don’t blame them. My sale is more about personal risk reduction, spurred by this reminder of the risks of their reliance on PharmaCann and the genuinely challenged financials of some of their smaller tenants.
Should be an interesting few months, at the very least.
Travis you did not make any comment on the llPR preferred stock. I have positions in both.. can u comment on the preferred?
I’d agree with tonypnc, that a large demand for the product itself has been around for many decades, and is sufficiently inelastic to fund the rise of this giant black market that we see all around. (When feeling cynical, I even say that marijuana prohibition laws have functioned as de-facto government price supports for this same black market, and all the enforcement has come at a high price to taxpayers.)
Now various jurisdictions are legalizing, to various degrees. But seemingly all of them have put enough friction in their distribution systems that the [OVERALL] market still sees the “black” portion as enough more efficient to remain competitive.
Washington State started out with requirements so onerous that legal marijuana was originally FAR more expensive than illegal – and then they seemed surprised that they didn’t get their windfall of tax money! They have since made their requirements more reasonable, and the legal market seems to be flowing some. They have reduced that friction a bit.
I personally like to imagine that many states will gradually continue to loosen their induced-friction in the legal market, over the years. If it eventually drops to insignificant, marijuana should begin to act similarly to other farm-raised commodities. Corn and soybeans tend to be grown on large scale operations more than on small ones.
How does all this relate to IIPR’s tenants?
If the states can get out of the way in time, I would think a large established grow operation would begin to out-compete the clandestine ones for market share. (Having to keep hidden must cause some additional overhead, plus the risk/losses of getting caught).
If the states CAN’T get out of the way in time… — well, that’s what we’re looking at today!
I think the legal boom is still coming, albeit by fits and starts in every different jurisdiction. There’s a tremendous reservoir of demand out there. (Particularly on the “recreational” side although IIPR doesn’t tap that side, yet). That demand is currently being supplied largely by presumably less efficient clandestine operations. How long can each legal grower afford to wait? And specifically, each IIPR tenant?
I appreciate Travis’ careful examination of each company, and especially his patient explanation of what he’s looking at. Talk about a great teacher! I’m glad to pay for this newsletter.
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Yes, inelastic. I think people will give up other things before they give up medical marijuana. In 2009 people bailed on their mortgages but kept paying their credit card bills. Like that.
Oh, to complete that thought…
After reading Travis’ more detailed examination of IIPR’s tenants, I too decided to reduce my risk a little bit. But I’ll hang on to the rest, and go for the ride.
The Foole had pushed IIPR awfully hard, back in mid January. They called it a safe way to gain exposure to the MJ boom. I tried to see what they have to say about it now – couldn’t even get their Stock Adviser to mention it! Maybe i just don’t know how to work their software yet…
If the intended emotional impact of the short attack knocks the short-term price down too far, I’ll probably buy back a few of those shares to improve my basis.
Looks like it didn’t work yet today!
Mr. Travis today I say report called “Give Yourself The Sector Edge” $79.00 for year with 30 day $ back guaranty I was wondering if you have the time to check it out and see what you think.
I am a small investor with about $2000.00 to play with what stocks would you buy to make some real money? My mindset is I look at penny stocks or those under $3.00 to $5.00 a share, figure I have to buy at least 500 to 1000 shares to ( like I stated) to make some real money.
I have joined the Oxford Club “Comunique” (I have up to year to get my money back). I also joined “The George Gilder Report” (I have up to three months money back).
I could be wrong, but as my cousin Mike (with an I Q very high) and I have chatted, if all these publications ( mostly owned by parent company Angora) know all this information (about whatever the, as you say “tease” or pitch) there trying to sell ordinary people, WHY do they need our money? These Companies, Reports, Publications and celebrity guests and stock market Gurus CAN make trillions of dollars on their own IF THEY SO CALLED KNOW? That their “tease or pitch” will work. Again they would all have trillion upon trillion. I’d really like to get your opinion on this paragraph?
Lastly there are so many of these Publications offering all this advise that they think its the best way to make money, do you think they are all scams (because they all offer low fees to get in) and then try to reel you in for ” The Better High End Report” as I call it for hundreds more dollars. Example:
The Oxford Club
The George Gilder Report
Thehill ( This is the report I asked you to review)
Bannon Hill
BuzzMarkNews
Market Beat
Money Morning
Stansberry Research
Stansberry Digest
And god knows how many more, but do you prefer one or two of these for your information? What is your go to source? Can you please tell me because ( I’ll be honest with you I just don’t have the time. If I could limit it to just the top number one or two fine, or none of these, again what is your number one or two sources?
Mr. Travis I really like your newsletter and what the way you think this is the reason I’m asking you!
Thank you, Stay Health
1) It’s not really about how many shares you have but how much you have invested. For example you buy one share of a stock that costs $1,000 and 200 shares of a stock that costs $5. They both go up 10%. You still make $100 from both positions even though you only have 1 share of one and 200 of the other.
2) It’s best to avoid penny stocks. Lots of them will fail. Penny stocks are more like you buy 100 different companies and hope a couple of them take off and go way up to make up for the money you lost on all the others. Also look at how many shares are traded each day. You don’t want stocks that are hard to sell when you want to get rid of them.
3) You want to keep the cost you pay for stock advisors as low as possible. With only a couple thousand to invest you don’t want to spends hundreds of dollars. You should probably try and keep the cost at 1% or less.
4) Some will tell you the newsletters also make money by buying stocks and then telling their subscribers to buy them too so the price goes up and then they sell theirs. Often referred to as ‘pump and dump’. They are legally required to disclose whether they have positions in what they are promoting though.
5) It’s best to not look to get rich fast but to build wealth over time.
6) Here is a site I like a lot. There is a lot of information on it plus a free newsletter you can subscribe to. And you won’t get spammed with upsells. She also sells a service where you get about 10 of her high conviction picks each year for $200.
https://www.lynalden.com/
Thanks for the Lyn Alden tip.
I like the first glance at her writing too!
To Newnas,
I totally agree with ronwill, below, and was going to write that same thing myself. Forget ALL the Get-Rich-Quick scams! Keep reading Gumshoe.
And add #7 to ronwill:
Most online brokerages have an Intro-For-New-Investors area of their websites. One example is here:
https://us.etrade.com/planning
Read lot’s of them, and learn how to assess your risk tolerance, goals, etc. Then split up your $2k into several smaller purchases in diverse sectors of the market.
To get the higher risk stocks dont look at the share price but look more at the market cap. The lower the market cap the more likely for it to swing one way or the other . I say this from a very general perspective as there are some companies with a low market cap in a industry where the market cap is low so it wont move much one way or the other. You may also want to look at options if your looking for more risk/gain potential. I strongly suggest researching it first though and start small until you understand them more.
Travis, I am a Irregular member and your the best money I ever spent on stock
Investing. I would like your thought on Casey Research’s ,Teeka Tiwari, pitch
on crypto currency or his name “Tech Royalty“.James Maclin
where is the trade note that was issues on April 9th?
Are the trade notes sent out via email notification?
Yes, when a substantial trade happens between Friday Files it is emailed out, and the note is also added to the discussion thread of the last Friday File. That particular Trade Note is here.
There’s also a Topic Page for anything that has to do with a trade, so the Trade Notes that are in the comment threads as well as any Friday File or other posting I write that includes notification of a trade I’ve made. That page loads more slowly, but is available here: All Trade Notes