In 1978 comedians Cheech Marin and Tommy Chong starred in a
so-called “stoner” comedy film titled “Up in Smoke”. The 2019 version of
the movie could very well refer to money lost in the parabolic rise and
subsequent fall of cannabis stocks. The growing acceptance of cannabis
for pharmaceutical and other purposes took the investment world by storm, as
investors raced to cash in on the “green rush”. Yet, as with almost every
investment bubble since the Dutch Tulip Bulb mania of the early 1600s, it seems
as though the cannabis bubble has burst—at least for now. The North American
Marijuana Index is an equally-weighted index that tracks the stocks of leading
companies in the legal cannabis industry in the U.S. and Canada. The
index’s inception was January 2nd, 2015 with a starting value of 100
points. After hitting a high of 358.93 in January of 2018, the index has
been up and down, with the most recent move a steep collapse down to
111.18. This 70% plunge would no doubt cause Cheech and Chong to say in
amazement “Oh wow, man!” Chart from visualcapitalist.com.
Womack Weekly Commentary September 18, 2017 The Markets “In theory, there is no difference between theory and practice, in practice there is.” Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No . From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do: “Being a U.S. equity investor over the past several years has felt glorious. The S&P 500 has trounced the competition provided by other major developed and emerging equity markets. Over the last 7 years, the S&P is up 173 percent (15 percent annualized in nominal terms) versus MSCI EAFE (in USD terms), which is up 71 percent (8 percent annualized), and poor MSCI Emerging, which is up only 30 percent (4 percent annualized). Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI Emerging’s $1.30.” The au...
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