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alexfigu
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I am the founder and editor of angrybullstocks.com, a free and independent stock and economic research website.
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  • Stonernomics - The Marijuna Stock Bubble 14 comments
    Feb 4, 2014 1:19 AM | about stocks: TRTC, PHOT

    After today's weak manufacturing report reflecting soft numbers in domestic factories, the DOW Jones took a 300 point hit. As domestic stocks continue to struggle, marijuana stocks conversely have continued to explode this year following the legalization of recreational marijuana in Colorado. The legalization of marijuana in Colorado has many investors wondering if marijuana is going to be a legitimate growth investment in the future.

    With the growing national support towards legalizing marijuana it is hard to see how the marijuana market will not grow in the future as more states continue to push for legalization. According to a recent Gallup poll, 58% of Americans were in favor of legalizing marijuana. Currently twenty states currently have laws allowing for legalized medicinal marijuana, with a few states having legislation on the table. Out of the twenty states with pro-marijuana laws, nine don't yet have active retail markets. These factors have many analysts predicting strong growth over the next few years. A San Francisco cannabis industry group, ArcView Group, predicted that next year's marijuana industry revenue will be up 64% to $2.34 billion. Furthermore, MMJ Business Daily predicted that legal cannabis revenue will be between $4.5-$6 billion by 2018, up from $1.3-$1.5 in 2013. (WSJ - Entrepreneurs Seek Profits from Pot) With all this being said are the current marijuana investments available in the market prudent investments?

    The answer to the question is undoubtedly no! Out of 35 public listings of marijuana companies available domestically the majority trade over-the-counter or on the pink sheets and are being pumped online by the stoner version of Jordan Belfort. According to Alan Brockstein, a self-proclaimed marijuana stock expert, "most of these stocks are not good investments." (The New York Post - Pot Stocks May Go Up in Smoke) Fueled by a high demand and no real supply, many of these marijuana "companies" are figments created by stock-promoters to fuel the rising marijuana demand in America. These marijuana stocks are mostly shell companies that through acquisitions have obtained "marijuana related" companies with little exposure to the actual medicinal drug.

    For example, popular marijuana stock Terra Tech (OTCQB:TRTC) is trading up over 250% for the year. The majority of Terra Tech's revenue from its latest report came from its vegetable garden subsidiary, yet the stock more than doubled following the legalization of recreational marijuana in Colorado. Similarly, Growlife Inc. (OTC:PHOT) an owner and operator of 5 hydroponics retail stores is being valued with a market cap of $230 million, or $46 million per store. Despite these companies being vastly overpriced and in reality having limited exposure to legal marijuana revenue, the prices of their shares shot up exponentially as investors watched and read about recreational marijuana in Colorado.

    As media coverage of Colorado ends and stock promotions run out, these marijuana penny stocks will inevitably fall and 2014 will go down as the year of the marijuana stock bubble. Despite many traders raking in money as a result of the bubble, long term investors will likely find disappointment when they see that their investments go bankrupt.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in PHOT over the next 72 hours.

    Themes: Marijuana Stocks: TRTC, PHOT
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Comments (14)
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  • DaveMoo
    , contributor
    Comments (16) | Send Message
     
    No position in any stocks mentioned, but may take a position within 72 hours? Hmmmm.
    4 Feb, 02:28 AM Reply Like
  • alexfigu
    , contributor
    Comments (4) | Send Message
     
    Author’s reply » short position
    4 Feb, 12:26 PM Reply Like
  • crorec
    , contributor
    Comments (69) | Send Message
     
    This article seems a tad bit strange especially when he says he might take a position in $PHOT . Marijuana Stocks are for real, the money is there to make as long as your smart with any investment stock comes risk. I currently have shares in $PLPL,TRTC,MDBX and FSPM.
    4 Feb, 06:22 AM Reply Like
  • msicorp
    , contributor
    Comment (1) | Send Message
     
    Another blog story about MJ trying to deter the retail investor. Hotstock.com did the same thing about a week ago and the stock they were speaking of shot up from .0002 to .0025. It's in there best interest to deter the retail investor, so that the Big Boys can acquire all they can before the government passes legislation, as they did yesterday in the Farm Act.
    4 Feb, 08:00 AM Reply Like
  • BlaqueBetti
    , contributor
    Comments (2) | Send Message
     
    Strange indeed... A counter to ArcView Group and MMJ Business daily whom he mentions as proponents. I hope his PHOT and TRTC acquisitions provide a basis for additional research. I'm TRTC,PHOT, CANN, CBDS, AEGY, BRDT, MJNA and CBIS. So far So Good!
    4 Feb, 08:15 AM Reply Like
  • alexfigu
    , contributor
    Comments (4) | Send Message
     
    Author’s reply » if i wasn't clear I plan on shorting both trtc and phot
    4 Feb, 12:18 PM Reply Like
  • oldorv
    , contributor
    Comments (400) | Send Message
     
    Finally! An honest article. Incorrect conclusions for sure but at least honestly admitting the set-up for shorting one of the best hottest pot stocks. Go get 'em, big guy.

     

    BlaqueBetti [above,comment #1 :)] is doing it just right: Grab a variety of these stocks and let the amazing hotness of the pot sector take you higher [in profits that is].

     

    This is the time to ride the wave. Any of these companies individually don't look like much, I admit, but they are flying higher on sentiment and expectations. To each their own but if your goal is making money in the 'market' its hard to understand why the investor would not ride a trend this hot.

     

    I'm holding 19 different pot stocks and doing very well, on average, every day for the past month...the time will come to get out fast but right now is the time to jump in with both feet.

     

    [disclaimer: I'm retired. Don't need the money. But its great fun trying to make money and at the moment very easy. BUT don't 'bet the rent.' Any stock can meltdown at any time; you could lose part or all your investment].
    4 Feb, 08:52 AM Reply Like
  • DaveMoo
    , contributor
    Comments (16) | Send Message
     
    Congrats on your retirement Oldorv! I hope to make it to that status in my life. Enjoy it! Congrats again!
    4 Feb, 09:33 AM Reply Like
  • BlaqueBetti
    , contributor
    Comments (2) | Send Message
     
    Yes Indeed Oldorv! I too am a retiree and am having a ball w/this sector. I loaded up on SING and EAPH this morn. Like you said, spread them out. Make the most and when you feel the time is right, exit stage left. I plan to keep these babies - and they are still babies - til they cut teeth and can walk. No stock is a sure thing but I'm relentessly optimistic!
    4 Feb, 08:06 PM Reply Like
  • alexfigu
    , contributor
    Comments (4) | Send Message
     
    Author’s reply » To clarify, I plan on taking "short" positions on the stocks. My article never debated the growth of the marijuana industry as a whole, but rather brought light to the high number of stock scams present in the market. Your positions may continue to rise in the short term, but for every stock pump there will eventually be a dump. I don't know when the dump will happen but it undoubtedly will so that's why I plan on placing short positions to capitalize on this dump.
    4 Feb, 12:17 PM Reply Like
  • petenebraska
    , contributor
    Comments (63) | Send Message
     
    "but rather brought light to the high number of stock scams present in the market." ...yet, you do not identify any of them? You mention PHOT and TRTC and your apparent intention to initiate a position and short them. Are they scams? (trolling)
    I'm with oldorv. Get those prices back down so I can buy some more!
    4 Feb, 01:00 PM Reply Like
  • alexfigu
    , contributor
    Comments (4) | Send Message
     
    Author’s reply » don't worry I will go into more detail in a followup article regarding my reasoning for calling these stocks scams.
    4 Feb, 08:43 PM Reply Like
  • belgium
    , contributor
    Comments (1002) | Send Message
     
    Are you really saying TRTC is a scam?

     

    You can find the EG brand in over 500 locations...
    24 Feb, 06:17 PM Reply Like
  • crorec
    , contributor
    Comments (69) | Send Message
     
    Bought more $FSPM today on the dip, keep selling off I am buying earnings will report $$$.
    5 Feb, 03:31 PM Reply Like
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